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McGrady Bill Aims to Ease Regulation on Craft Beer

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QUINN DOMBROWSKI / FLICKR, CREATIVE COMMONS
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A bipartisan bill sponsored by Henderson County Republican Representative Chuck McGrady aims to give more flexibility to North Carolina craft brewers to run their businesses.  At a news conference last week, McGrady unveiled House Bill 500, an omnibus bill making changes to the way alcohol is governed in the state.

“I have many breweries in my district.  Basic Brewery, Sanctuary Brewing Company, Southern App Brewing, Blue Ghost Brewing, and of course Sierra Nevada.  I have seen these breweries become a really positive and integrated part of our community where families gather and people are able to get well-paying jobs working in small businesses.”

McGrady is now a co-chairman of the House committee on Alcoholic Beverage Control.

“The more I’ve handled alcoholic beverage legislation, the more clear it has become to me that we need regulatory reform.  Craft brewers need more freedom to make and distribute their product, and for me it’s become sort of a free market issue.”

McGrady says HB500 makes numerous changes that should be uncontroversial, such as allowing tastings during tours and allowing taprooms to sell alcohol not brewed in house.

“Other provisions, though, I am sure will receive opposition from those who benefit from the authorized monopoly we have now, specifically sections 11 and 12 of the bill, which allow brewers to self-distribute up to 200,000 barrels and makes it easier for them to end franchise agreements.”

WUNC Capitol Reporter Jeff Tiberii has been following the legislation and says on one side are the breweries who want more freedom.

“On the other side of it are the wholesalers and the distributors who have a very strong lobbying presence, a very good relationship with state lawmakers.  And they say that this is a law that has worked for quite some time.  It’s been in place going back to the 70s.  And they shouldn’t be forced to change it.”

The bill could put McGrady at odds with his former counterpart in the Senate, Hendersonville Republican Tom Apodaca, who now lobbies for North Carolina Wine and Beer Wholesalers, a group that could be impacted if the current 25,000 barrel cap on self-distribution for craft brewers is raised.  Tiberii says for years Red Oak Brewery near Greensboro has been pushing for raising the cap, without success.

“Well now, you’ve got Noda and Old Meck Brewing down in Charlotte, and they’re also approaching this 25,000 barrel cap.”

The impact could be less on western North Carolina breweries, at least initially.  Billy Pyatt is an owner of Catawba Brewing Company and also president of the Asheville Brewers Alliance.  He says Catawba doesn’t yet come close to the barrel limit and already set up an agreement with a distributor, and while he doesn’t want to speak for other brewers, he added that’s pretty much the case with most of the breweries in and around Asheville.  He isn’t yet taking a strong stand on the bill, but he does generally support its free market principles.

“The things in there allow more freedom.  They allow individual brewers to make different choices.  Those are choices that probably weren’t available to Catawba when we were growing up.  That said, I don’t think that if we could turn back the clock that we would do anything differently.”

McGrady’s bill already enjoys the support of Buncombe County Democrats Brian Turner, John Ager, and Susan Fisher, who have signed on as co-sponsors. 

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