Red Oak Brewery in Greensboro wanted to distribute 60,000 barrels of brew
Christian Action League
A bill that would have increased the limit a brewery in North Carolina could distribute its products without going through a wholesaler didn’t resonate with the ABC Committee this week.
HB 1017 – Increase Small Brewery Limits was legislation that was largely being pushed by the Red Oak Brewery of Greensboro. The measure would have allowed all small breweries in the State like Red Oak to increase direct distribution of their products from 25,000 barrels annually to 60,000 barrels, without the necessity of first going through a wholesale distributor.
Since the repeal of prohibition, as in other States, the Three-tier system of alcohol distribution is the system for responsibly distributing alcoholic beverages. The three tiers are producers, distributors and retailers. As noted by a bill summary provided by legislative staff, “A producer must sell to a distributor who must then sell to a retailer.” “That process slows down aggressive alcohol marketing,” said Rev. Mark Creech, executive director of the Christian Action League. “Moreover, it provides a strict means of accountability that is absolutely essential to protecting the public’s health. The more a producer can distribute directly to the retailer, the more apt we are to have problems similar to the ones that existed before prohibition – corruption and abuse of alcohol.”
In testimony before the ABC Committee on the legislation Rev. Creech said:
“It may certainly seem like a case of strange bedfellows. But today the Christian Action League stands in solidarity with the North Carolina Beer and Wine Wholesalers in opposition to House Bill 1017.
But the reasons for our opposition to this measure are somewhat different. While they would contend that the current three-tier system, which this bill would weaken provides such benefits as protecting against anti-competitive practices, establishing an orderly market, collecting taxes, etc., we believe that the three-tier system that’s been in place for decades is an effective means for producing control and temperance.
The system provides checks and balances in alcohol sales. Law enforcement can pinpoint exactly where products have been from the time they are produced to the time they are sold. The three-tier system provides a clear chain of custody, if you will, and makes each part of the industry accountable for its practices, protecting against sales to minors and those who would abuse alcohol. It’s a system that’s flexible enough to reflect attitudes and concerns on the local level. It protects consumers from counterfeit and poisonous alcohol products.
These are all very serious consumer protection issues that we dare not take lightly. I’m certain that I don’t need to belabor the point with this committee that alcohol is a unique and potentially dangerous product -something, I think, that is best attested to by the fact that we’ve had two constitutional amendments to address its use.
The Christian Action League surely has no love for alcohol. Nevertheless, there are two things that are sacred with us – local option – and the three-tier system – both of which are important measures for control and temperance. HB 1017, we believe, would significantly weaken the three-tier system, which effectively discourages the overly aggressive marketing and sales practices that can lead to abuse.
Let’s now protect the system that does provide some protection for us.”
Dean Plunkett, president of the North Carolina Beer and Wine Wholesalers, as well as a number of other wholesale distributors spoke against the bill. Lawmakers on the ABC panel asked a number of questions and there was a spirited debate, which also included testimony from Red Oak’s owner, Bill Sherrill.
The ABC Committee did not take any action on the bill. However, chairman of the House ABC Committee, Rep. Ray Warren (D-Alexander) said the legislation would not come before the Committee again this year.
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Two other alcohol measures were taken up by the ABC Committee:
HB 667 – Winery Sales Changes sponsored by Rep. Melanie Goodwin (D-Montgomery) and Rep. Pryor Gibson (D-Union), is a measure that originally would have allowed wine sales throughout the State, regardless of the results of an alcohol referendum. But a Proposed Committee Substitute (PCS) was presented to the ABC Committee that changed the title to 2009 Viticulture/Enology Act and did not violate local option alcohol referenda. However, it would increase the current privileges of a winery by allowing them to have a satellite location in the county where the winery is located, as well as to allow Sunday sales.
HB 667 passed the House ABC Committee and has been referred to the Committee on Finance.
The Christian Action League is still researching this measure and has yet to take a position.
HB 1228 – ABC Rules/Private Clubs sponsored by Rep. Pryor Gibson (D-Union), would amend the State’s alcohol statutes concerning the authority of the ABC Commission to adopt rules concerning private clubs, by deleting the specific requirements that private clubs have a waiting period for membership.
“We are still trying to research all the ramifications of this measure,” said Rev. Mark Creech.” I think we ought to be concerned about how this might eliminate certain distinctions between private clubs and restaurants that are necessary. Without this waiting period for private clubs, we are, I fear, inadvertently creating bars, which technically we don’t have in North Carolina. Moreover, why would a restaurant have to comply to the 70/30 alcohol to food ratio standard when a private club doesn’t have to abide by that same standard and would now be open to the public in the same way?”
The Committee voted in favor of the measure, which has a serial referral and must pass three other committees before a vote on the House floor.