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In Last Minute Move, Bill Passes Allowing Community Colleges to Teach Brewing Course and Sell Beer to Wholesalers and Retailers

Legislation puts Community Colleges in the beer business
By L.A. Williams, Correspondent
Christian Action League
August 20, 2014

image002RALEIGH — In a last-minute move that the Rev. Mark Creech, executive director of the Christian Action League, considers one of the worst decisions of the 2014 Legislative Session, Tar Heel lawmakers late last week voted to allow community colleges with brewery courses to sell the resulting beer not only at special limited events, but also on an ongoing basis to wholesalers and retailers.

The alcohol provisions were tucked inside a 47-page Regulatory Reform Act (S-734) that was filed in May, bounced in and out of Senate and House committees, was believed dead and then emerged as a conference committee report. The measure was quickly adopted Aug. 15, as part of what Dr. Creech called a “Christmas tree bill.”

“If this alcohol legislation would have had to stand on its own, it would have failed, but all the other items in the bill propped it up,” he explained. “Not very many people were willing to cut this tree down for the sake of a few bad lights.”

Nonetheless, he said the provision “sends the exact wrong message to students, among whom beer is already the beverage of choice.”

“Across the nation, some 1,800 college students die every year in alcohol-related incidents,” Dr. Creech added.

House Majority Leader Edgar Starnes (R-Caldwell) as well as Rep. Carl Ford (R-Caldwell) argued vehemently against the bill on the House floor, where it was ultimately approved 64-27. The Senate vote was even more overwhelming.

“There are a lot of microbreweries springing up across the state, and they have a desire to be able to teach people this, but this goes far and beyond what we ever envisioned,” said Rep. Starnes, who told fellow lawmakers they were burying their heads in the sand by denying the state’s serious underage drinking problem.

He said allowing the brewing classes to retail and wholesale their products — especially at cost or perhaps even below cost — violates a number of business and legal principles.

“There goes the three-tiered malt beverage retailing system. What we’ve had established in this state for decades is beginning to crumble. We’ve had other brewers in this state who have begged us to come out from under the limits on their brewing so they can be exempt from the three-tiered system. We’ve said no to the private brewers, but we’re telling our community colleges they’re exempt,” Starnes railed. He said the bill also violates the Umstead Act, a 1939 law which prevents state-owned agencies from selling merchandise in direct competition with private merchants.

Senate Bill 734 allows student brewers to sell up to 64 cases of malt beverages at each of six special events per year with profits to go back to the program. Sales to retailers and wholesalers are allowed, and each college can sell on campus and at one off-campus location in their community.

“We’re putting the sale of alcoholic beverages on the campus of the community college where the majority of these people are not even old enough to purchase this product,” Starnes lamented. “This is not good for the state of North Carolina.”

Rep. Carl Ford (R-Cabarrus, Rowan) was also outraged by the thought of bringing beer sales home to Rowan-Cabarrus Community College.

“We have Early College; there are 15-year-olds going to RCCC, so we’re going to drop off the kids at the brewery today?” he chided.

Community colleges in Nash and Rockingham counties as well as Blue Ridge Community College in Henderson and Transylvania counties and Asheville-Buncombe Technical Community College currently offer brewing classes. It’s unclear how many other community colleges may add the program.

“What’s particularly concerning is that the new law appears to give the colleges the option to create their own brand, develop that and sell it to wholesalers and retailers, which could turn out to be a lucrative proposition,” Dr. Creech said. “Every lawmaker I talked to said they didn’t believe that was the intention of the bill, but the language allows for it.”

Also in his plea to nix the bill, Starnes pointed out that the provisions never went through the ABC Committee.

“They were never considered on the floor of the House. We never had an opportunity to pass judgment on this provision,” he said.

Dr. Creech said that if the bill been totally vetted, it would have never passed. Even after it was too late to lobby lawmakers for amendments, the Christian Action League followed up with community college authorities and was assured that the educational institutions didn’t intend to utilize all of their newfound brewing and sales freedoms.

“We were able to get the personal word of Dr. Scott Ralls, president of the Community College System, who said that not only were the colleges not planning to dive immediately into the beer business, but that the system would work with the Christian Action League during the next session to persuade lawmakers to narrow the language of the law to allow for special events, but not such a wide open approach,” he said.