Georgia Brewers and Wholesalers Agree on Bill to Allow Direct Sales

Austin Ray

THE GIST
Georgia brewers and beer wholesalers have found common ground on one of the most divisive issues splitting the state’s beer industry. After months of discussion, the two sides have come together to help shape a bill that would, among other things, finally allow for breweries to sell beer directly to visiting customers for both on- and off-premise consumption. Currently, Georgia is one of only two states in the country—Mississippi is the other—that prohibits all forms (both on- and off-premise) of direct sales for breweries.

WHY IT MATTERS
Peach State brewers have been fighting for change for years, and the right to sell beer from the point of production has emerged as one of, if not the most, heated points of contention facing the state’s beer industry. Senate Bill 85, as submitted by State Sen. Rick Jeffares (R-McDonough), aims to lessen the tension.

Specifically, with language backed by both brewers and wholesalers, the bill would allow breweries to sell up to 3,000 barrels of beer a year to visiting consumers, enabling drinkers to enjoy beer by the glass on-premise and buy up to one case’s worth (288 ounces) of beer to go. Further, the proposed legislation would allow for visitors to purchase food without paying for a tour package. The bill also includes a provision freeing up brewpub to-go sales.

Joel Iverson, co-founder of Atlanta’s Monday Night Brewing and a board member with the Georgia Craft Brewers Guild (GCBG), said on a local beer email listserv that, to his knowledge, “this is the first time legislation has been introduced in our state that was jointly supported by both the craft breweries and the [Georgia Beer Wholesaler’s Association (GBWA)].

“In terms of the question of why and how this change came about I will just say it’s truly a group effort,” he continued. “People across our state have been reaching out to their legislators, breweries have been having ongoing conversations with their wholesalers, and at the end of the day, this represents people from all facets who want the best for our state trying to make reasonable reforms to the system.”

While the bill represents huge progress on the negotiation front between the two tiers, there were some nonstarter issues. Bob Sandage, owner of Wrecking Bar Brewpub and co-chair of Government Affairs for the GCBG, said on the same listserv that the bill doesn’t aim to allow self-distribution for breweries because that “would have been a deal killer.”

“What it does allow is the small breweries to make revenue that would allow them to grow faster and easier,” he clarified.

Martin Smith, assistant director with the Georgia Beer Wholesalers Association, could not be reached for comment as of press time. Nancy Palmer, executive director with the GCBG, sang the group’s praises in a press statement, saying, “The business leaders of the GBWA have been crucial in this process.”

Previously, wholesalers objected to loosening restrictions on grounds that such change would threaten the integrity of the three-tier system.

“It fractures a very functional, working program,” Smith said in 2015, when a different-but-similar bill was being debated. “The Georgia Beer Wholesalers fully supports the growth of brands and marketing of brewers. That’s what our business is—we do that. If there’s an opportunity to do that without fracturing the system, that’s great.”

Sandage added that one of the things that finally brought both sides to the table was “pressure not to be the last state in the U.S. to allow actual sales of beer from a brewery.”

From a broader perspective, though, this battle has always been about more than selling beer by the glass or package free of wholesale intervention. Rather, brewers have long positioned their arguments for change as one based on economic stimulation.

A 2015 bill that included similar language to the current legislation in question was dubbed “the Beer Jobs Bill” (which did pass, albeit in a dramatically stripped down version that didn’t repeal the direct sales prohibition). The logic went (and goes): If brewers could sell more beer, they could grow faster and hire more people. Not to mention that more startups would be inclined to open up in a friendlier regulatory environment.

Here’s that same argument, reflected in stats tracked by the Brewers Association, and provided by the GCBG Thursday: “Georgia ranks 48th in breweries per capita, 41st in economic impact per capita, and 17th in overall craft beer production.”

Sandage notes, though, that the work isn’t done now that brewers and wholesalers have found common ground. “Anything can happen,” he said. “A legislator or committee could want to make changes, or some other entity could try to ride on our bill, thus possibly diluting our chances of success. We are very active in every step of this process and have our lobbyist doing everything possible to ensure success in this session with this bill.”

Which means that now it’s up to the state’s lawmakers to take heed of what the Georgia beer industry at large agrees is good for business.

—Dave Eisenberg