Beer Bill Skunked in Committee

sweetwaterParty Down.

The “Beer Jobs Bill” had a rough time of it in the Senate Regulated Industries Committee today. SB 63 was set to liberalize the rules for sales on the premises of Georgia breweries. This is important because it turns a mere factory into a tourist destination and buttresses Georgia’s burgeoning beer culture. It would add jobs, tax revenue, and it’s just plain a good idea. The original bill, which was already a compromise among the various interested parties, would have allowed visitors to the brewery to have four pints on the premises, and to buy a 12 pack to take home. This is not a lot of beer, but the selling of the beer to the customer at all was the problem for the distributors (who attract 0 tourists a year to Georgia). Their objections led the committee chair, Rick Jeffares, to introduce a substitute bill to his committee today, which would cut the amount you could serve in half, but also prevent any beer to be sold to people visiting the brewery. It would all have to be given away as a bonus to tour goers.

The tripartite liquor laws in Georgia have an interesting history and there is some reason for them to exist, but to use the outdated framework as a way of punishing small business to smooth the egos of wrongheaded entrenched interests is anti-democratic, heavy-handed, and just plain wrong. The distributors would benefit from the beer culture that’s created by microbreweries. Even they point to Sweetwater’s success as having changed the landscape. But distributors only exist to bridge the government created monopoly between manufacturers and retailers, and their fear of eroding their fiefdom led them to try and tank the bill.

Starting a small business is hard enough. Government doesn’t need to make it any harder by making it impossible to sell the fruits of one’s own labor without oceans of red tape and middlemen. This bill will head to the Senate floor shortly, and then likely on to the House. Here’s hoping either one of the other can get this bill back to where it needed to be: a compromise that helps everybody to keep breweries in this state rather than setting up shop elsewhere. That’s a solution we can all drink, and drink to.

39 comments

  1. South Fulton Guy says:

    Sad that lobbyists and big business trump the so called GOP principals supporting competition and laissez faire… Erick Erickson is absolutely on point on the outrage of this strong arming…

  2. Rick Day says:

    The distribution system is just a spoils system. It is all a “pal on pal” large corporate thing.

    Example: Atlanta Beverage Co is the Bud distributor for our venue. Although a multi-million dollar business, we are not ‘big enough’ to have our own sales rep. We had to rely on ‘counter sales’ to place orders. Big guys like Live Nation get the brown nose, the rest of us suck hind teat.

    Some days, they would not show up, or claim they did, contrary to security cam footage. Sometimes they just don’t put enough of the order, or just leave something off. No calls, nothing. If they overbill you, you write a check and hope for the credit they give.

    One of our biggest sellers is energy drinks. We switched from Red Bull to QUAD energy drinks (Double Cola product). ABC decided one day when we ordered 20 cases for NYE that they ‘decided last week’ to stop carrying it because ‘no one ordered enough’. Never told us in advance, we had to call after the delivery.

    Cue scramble to sams club for RB.

    There is very little difference in wholesale and retail prices for beer or spirits. We have to buy from the distributors so the state can have a standard to audit for sales tax compliance. Or reps just don’t care, they are just order takers and fire fighters.

    And heaven help the bar owner that has to depend on the exclusive product of one REALLY bad rep. Wells? Everyone has wells! Jack Daniels? nooooooooooop. Only one distributor carries it. Are they out? Then everyone is out!

    MoneymoneymoneyMoneymoneymoneyMoneymoneymoneyMoneymoneymoneyMoneymoneymoney.

    Find out who was the legislators who caved on this. Look at how much in donations the distributorships and their exec’s gave. Then take that and someone RUN against them on an anti-spoils system platform.

    • Noway says:

      I just never thought I’d agree with Rick. He’s 100 percent right on tis one. Best of luck in running your business the way you want!

  3. Andrew C. Pope says:

    Local breweries and sympathetic bars/restaurants should take a cue from how some places in DC reacted to Congress snuffing out marihuana legalization: deny service to the folks that rallied against the bill and all their staffers.

    Ah who am I kidding? These losers probably don’t realize Bud Light tastes like stale toilet water.

  4. John Konop says:

    This issue is little more complicated…..Many of the distributors invested their money, raised money, obtained debt capital…..under the current laws….Agree or not with the laws….it does not seem right that an investment can go bad by the government shifting the system from 2 tiers to 1 tier system. I am not sure of what is the correct answer….but distributors have a legitimate complaint about this….

    • Harry says:

      They have no legitimate complaint. They’re trying to keep their protected market, that’s all.

    • Noway says:

      Gentle disagreement, John. I see this much like Uber. I see the existing laws as protecting the big players. Let the micro breweries sell their 12 packs. As was also pointed out on this thread the micro folks have also invested their efforts. We should not protect anyone, not lawyers from Legal Zoom, not vets from PetMeds, not car dealers from Tesla…

      • John Konop says:

        Norway,

        I am not debating about if the original law was wrong…..but it has been in place for years….when you change laws it makes investing unstable…..

          • John Konop says:

            I have made numerous investments into businesses….The investments are strictly on the merit of the business plan and people running it. I have never invested into a business based on lobbying for favors…most investors I know do it the same way…..Not saying that large institutional companies do not lobby….investors into small to medium size business do not have time nor resources in general to play that game, Most of us made the money the old fashion way….no inside deals….The distributors in Georgia are not mega companies from what I understand…Btw I do not own any stock into any beer, wine.,..distributors….Btw I am customer of thier products….:)

      • Stefan says:

        This is a bit different than the others you mentioned. The vets and PetMeds issue is an anomal safety one, while the LegalZoom problem is about consumer protection. (I suppose the PetMeds is too, as the pets literally are the consumers of the medication.)

        • Noway says:

          This is all about protecting the establishment from new competition. Book stores are dying because of Amazon, same with Circuit City. Adapt to the new technolgies or ways of doing business or die. No restraints of trade or insitutional protections for anyone. The product produced by these micro breweries are superior to the horse piss churned out by the big boys. Don’t like it, Mr. Big? Produce something the people like better.

  5. saltycracker says:

    John, et al, And the breweries did the same with usually more investors and took a risk far beyond any distributor. Know any distributor that is cash strapped without them ?

    This is market control and political influence is the tool. After years we got a distillery in my Florida town and the rewards to the community far exceed our expectations. Tourism, jobs, community pride, nationwide attention with awards, local merchants making extra profit on limited supply, a derelict downtown building restored……and raw products are contracted with local farms ! You can even join in on a harvest and festival.

    The distributors in another county are relentless in curbing this and have powerful friends. They want their cut and control of this small business.

  6. BeerGuy says:

    This will not be a popular comment but the Three Tier System and our beer laws actually HELP the little guys. It may not seem like it, but these craft breweries would not be in business at all without the current federal and state alcohol laws.

    Don’t believe me?

    How many small local cola brands do you know about. None. Why, because Coca Cola and Pepsi are allowed to buy up all the shelf space in any store or sign exclusive contracts so they are the only brand sold at a restaurant (anything from McDonald to the Crown Plaza).

    The small wine brands use the Three Tier System to their advantage. They work with distributors and present their products at regular sales meetings. They educate the sales people about their various small labels and encourage them to sell their wines instead of the Gallo and Sutter Home brands. It works.

    Craft breweries pay $6 per barrel in federal taxes. Anheuser Busch and Miller pay $18 per barrel.

    You want a level playing field? Great! Let’s get rid of the lower tax rates, the anti-exclusivity laws, the Tied House Act that prevents the big brewers from taking over the industry. See what happens to the small breweries. You’d get Bud, Miller and Coors and nothing else.

      • saltycracker says:

        To be clear, the option to go it alone and/or sign up distributors is up to the distiller/brewer.

    • Will Durant says:

      The Georgia Legislature can hardly do anything about federal laws. I’m not going to look it up but I recall Joe Frank giving Anhauser Busch some serious exemptions, exclusions, and/or easements to locate a plant in Cartersville. Have any micro breweries received such treatment? The legislature also declared tap water could be sold as “spring water” on AB’s behalf as well. Sounds like your level playing field has been pretty hilly.

  7. Pete Gibbons says:

    A local brewery would be a game changer here in Bowman. The city would see a huge boost in revenue through water sales. It would help make us a destination bringing tourists, and their money to town. It would also create several jobs at the brewery and at other local businesses. We preach shop local to everyone but we can’t seem to practice what we preach ourselves .

  8. ATL says:

    It seems to me that the brewers got what they said they wanted. The ability to sample beers after a tour plus the ability to send a consumer home with product. The Brew Pubs also received the option to send people home with to go orders.
    The retailers and distributors were able to preserve the three tier system that serves Georgian consumers so well. There would be many unintended consequences to numerous to describe here. The cola example is one.
    Brewers are not the only entities in business. Why should their interests trump those of retailers, distributors. And most importantly consumers.

    • Will Durant says:

      Please explain how consumers benefit from political protection of retailers and distributors that prevents them from purchasing what amounts to be a miniscule portion of statewide beer sales directly from a manufacturer?

  9. jbsimpson81 says:

    Just need to get it passed by day 30. 16oz 32oz 64oz that can all be fixed in the House or in a conference committee.

    • Will Durant says:

      I don’t think the quantities are at issue so much as the requirement that they are tied in as the “freebies” for a tour. Even if the brewery ratchets down the price of the tour to their price on the beer alone they will be encouraging everyone in the party to drink onsite with carryouts. Who is going to turn down “free” beer. This is terrible logic and designed as such on purpose.

  10. saltycracker says:

    Republicans must stand for individual pursuits by permitting options while regulating for the public’s welfare. This bill excessively restricts one to the other. Give the brewer/distiller their license and freedom of choice.

    The public is better served, See my city impact above.

    • saltycracker says:

      To over clarify for Republicans this bill should not prevent the distributors from competing for the breweries business. They offer some sound good business options to get their product out there. OPTIONS.

      • saltycracker says:

        AND the faster the Republican elected do the right thing for small Brewers the faster they can come up with tax incentives for them to replace the reduced contributions from distributors! (Couldn’t resist the continuing saga)

  11. exurban says:

    I think the pro- distributor folks miss a point. It’s not a zero-sum game. There will still be plenty of distribution opportunities if breweries are allowed to sell straight from the plant. In fact, they are able to expose their product to more people who are able to take that six or twelve pack with them after the tour . Friends or family may be turned on to a new brand that the distributors can then sell more of at the local grocery store or corner mart. I see everyone wining by deregulating brewery sales.

  12. David says:

    That is probably one of the most lobbying group at the capital. Is Post apartments still around. Who used to provide the beverages about every night? Go look at the campaign donations. Search Beverage, Distributor, Spirit. You will see there are at least 5 different groups I can find quickly. I hate it but this bill was DOA if the distributors didn’t want it.

  13. Ghost of William F. Buckley says:

    These comparisons to toilet water and horse piss make me wonder exactly what some people have had to drink around here.

    Little guys will get trumped by the heavy hand of a protected class and we didn’t even need to pass ‘religious liberty’ to do it.

    • Will Durant says:

      The output from the Carling plant that once resided just north of the Old Dixie Highway in Hapeville sure qualified for either of those sobriquets. Historically the pickin’s were slim for good beer here in the heart of Southern Baptistry. They preferred the hard stuff because it was easier to sneak around with. Kind of a shame to see their protected class is so downtrodden these days. We’ve actually imported some Lutherans, Catholics, and just plain heathens that know how to brew a decent pint nowadays.

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