Craft Beer Industry Planning Attack on State’s Three-Tier System of Alcohol Control
URGENT: Help Defeat this initiative by joining CAL’s Grassroots Advocacy List
By M.H. Cavanaugh
Christian Action League
September 9, 2016
“The craft beer industry is planning an attack on the Three-Tier system of alcohol control in North Carolina,” warned Dr. Mark Creech, executive director of the Christian Action League.
Referencing an article, Pop the Cap Movement Paves Way to Craft Freedom, recently published in the Raleigh News and Observer (N&O), Dr. Creech said the craft beer industry has grown a lot since the ‘Pop the Cap’ legislation passed a little more than ten years ago. He said the industry has plenty of room to grow more, “but what they want now will undermine responsible alcohol policy.”
‘Pop the Cap’ refers to a legislative initiative pushed by craft brewers that passed in 2005 and lifted the cap on the amount of alcohol that could be legally contained in a malt beverage. Before the new law’s passage, the amount of alcohol in beer was capped at 6 percent. Craft brewers felt the cap was too constraining and originally proposed raising it to 30 percent, but later lowered the proposal to 15 percent.
“Today in the Tar Heel state, beers can be manufactured and marketed that are as high as 30 proof,” said Dr. Creech.
Four years after the passage of ‘Pop the Cap’ in North Carolina, when other states were also considering lifting their limits on the alcohol content in malt beverages, USA Today reported that substance abuse experts were rightly concerned about the dangers.
But according to the N&O, Margo Knight Metzger, who is currently the head of the North Carolina Craft Brewers Guild, there haven’t been any negatives from lifting the restriction on beer’s alcohol by volume (ABV). She told the newspaper, “They said ‘People are going to drink their high alcohol beer and lose their minds and raise hell’ – and guess what? That didn’t happen.”
“But that’s an overly simplistic, even misleading, characterization of what has happened,” said Dr. Creech. “The evidence actually shows everything we warned lawmakers about came true.”
“Because of ‘Pop the Cap’ there currently exist more than before a greater risk to hazardous drinking with high alcohol brews – a greater risk to underage drinkers who have easy access to these products that are inherently more dangerous than the typical 6 percent beer. Alcohol advertising standards have also been lowered with beer tasting events now allowed at grocery stores, food businesses, trade shows and free samples of beer given away – all of to boost the burgeoning specialty beer industry,” said Dr. Creech.
“Dangerous products like Four Loko and alcopops are now on the scene, which were prohibited before,” he further argued.
Brewers Now Want to Lift the Limit on Self-Distribution
Now brewers from the craft beer industry are banning together in a major push for next year’s legislative session to lift the limits on self-distribution. Current law in North Carolina allows breweries to self-distribute if they produce fewer than 25,000 barrels of beer annually. If they produce beyond this, they must engage a wholesale distributor, which they complain is much too restrictive.
Although the legislation didn’t gain traction, brewers sought to move a bill raising the number from 25,000 to 100,000 barrels during last year legislative session. If the legislation had passed, it would have been disastrous to the protections provided by the state’s three-tier system of alcohol control.
North Carolina’s three-tier system is made up of suppliers, wholesale distributors, and retailers. It’s an arrangement that has worked exceedingly well for the industry, as well as a means of minimizing the harms that are inherently attached to alcoholic beverages. It provides critical checks and balances. Because of the independent buffer of a wholesale distributor between the supplier and the retailer, there are built in safeguards against corrupt, manipulative, or abusive industry practices.
To whatever level the three-tier system is diminished, the clarity of the chain of custody that scrupulously traces the product from production to sale is lost. Protections against sales to minors are lost, as well as many other abuses. Securities against contaminated or counterfeit products are lost, and an accurate means of collecting excise taxes lost.
To whatever means the specialty beer industry can get around this means of control, the public loses, the state and local communities lose, while the brewers rejoice all the way to the bank.
The current standard of 25,000 barrels of beer annually is high. It is not low, as the brewers would have lawmakers and the public to believe. In fact, 92 percent of breweries in the country produce less than 7,500 barrels a year per brewery.
The North Carolina Beer and Wine Wholesalers would oppose the brewers efforts to undermine the three-tier system, but for different reasons than the Christian Action League.
Tim Kent, their executive director, explained to the Asheville Citizen Times (CT) last year, “Requiring larger brewers to contract with distributors keeps a brewery from putting undue pressure on bars or retailers, thus preserving consumers’ choice.”
“In countries that don’t have that protection, bars are often limited to selling only one brewery’s products,” he told CT.
CT further reported, “‘Some states allow no self-distribution by breweries,’ Kent said. ‘North Carolina has a higher limit based on the idea that it would help small breweries get started.’
“But he said the limit works out to an annual production of 8.3 million 12-ounce bottles of beer. Any brewery making that much beer ‘is beyond the incubator point,’ Kent said.”
“I am very concerned about this major push that the brewers are planning,” said Dr. Creech. “It is not of any small consequence. I understand we have some huge issues on the table, the family, the sanctity of life, religious liberty. Such issues may be of greater urgency at times, but our alcohol control regulations are also very serious too,” he said.
“Let’s not forget that alcohol remains our nation’s number one drug problem, doing more damage than any of the other recreational drugs combined. Our faith, I suggest, requires us to do everything we can to minimize harms, and in this case that would be protecting our state’s three-tier system of alcohol control.”
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