Why aren’t Georgia Republicans getting government out of these small businesses’ way?

Craft Beer

Help small business. Get government out of the way. Unleash the free market. Encourage entrepreneurs. Grow jobs. Make Georgia more competitive.

You’ve heard many a Georgia Republican pledge allegiance to these principles in many an election. So why is a bill that ticks all those boxes being held up without so much as a committee vote?

I’m talking about Senate Bill 63. The “Beer Jobs Bill” would allow breweries to sell direct to consumers visiting their facilities: up to 72 ounces for consumption on site, and up to 144 ounces to take home.

Almost every other state allows breweries to make on-site sales. Georgia already allows wineries to do so. So why not Georgia’s breweries?

The stakes couldn’t be higher for Georgia’s craft brewers. They’re operating in a capital-intensive, fiercely competitive market.

Today, a brewery must sell about 5,000 barrels of beer a year to hit the break-even point, says Crawford Moran, owner of Five Seasons Brewing Co. Other estimates put the number even higher. In Georgia’s three-tier system, those sales must go through wholesalers to retailers. The brewer can expect to get about half of what a six-pack will fetch at a supermarket or package store.

In states with on-site sales, though, Moran says brewers can turn a profit by selling as few as 700 barrels a year because the margins on those sales are so much higher.

“By being able to sell direct,” he says, “it just allows you to get to that (break-even) point so much easier. And that then allows you to take that profit and invest back in the business, instead of constantly having low, low-margin sales.”

While Georgia has seen more craft breweries open up, we still lag other comparable states such as North Carolina, where beer tourism is thriving. And that’s not the worst of it.

“If you look at the median volume of beer produced” by Georgia’s brewers, Moran says, “it’s below the break-even point. Do the math on that … most people aren’t making any money.”

As a result, he predicts, “I don’t think half of them are going to be around in two or three years.”

So, one last time: Why is pro-market, pro-small business, pro-growth SB 63 going nowhere?

As far as anyone can tell, it’s because the wholesalers don’t want it. And in Georgia, the wholesalers wield great political influence.

Last year alone, according to data from the National Institute on Money in State Politics, wholesalers gave over $950,000 to candidates in Georgia. The vast majority came from seven companies and their owners (e.g., Georgia Crown and the Leebern family, and General Wholesale and the Young family) plus two trade associations.

Almost $50,000 went to Lt. Gov. Casey Cagle, who of course has a lot to say about what does and doesn’t happen in the Senate. Donations to Gov. Nathan Deal hit nearly $112,000. Speaker David Ralston received $35,000. Those are big numbers for Georgia’s big three, but keep in mind their total represents only 20 percent of what the wholesalers gave to all candidates in the state.

SB 63 would not harm the wholesale beer trade; one industry executive told a Senate committee as much in a recent hearing. But it would be a big deal for the small brewers who could be growing their businesses and creating jobs, if only a Republican-led government would get out of the way.

Reader Comments 0

52 comments
coj
coj

Big businesses always trumps small businesses because more profits means bigger bribes.

DeborahinAthens
DeborahinAthens

As always, follow the money. Republicans will never be able to govern, which means create laws because they are boxed in by the religious Whackadoodles on one side and bought and paid for by corporations on the other side. They talk a good game--job creation, less regulation, etc. However, when you look at our recent history, their track record is a nightmare. I predict that we will see much more of this. If the Koch brothers want the National Forests cut down to supply wood to their toilet paper manufacturing company, it will be done. If the oil industry wants to be able to frack the crap out of this country, destroying potable water in the process, it will be done. If the Bible Thumpers don't want breweries to succeed (thereby creating jobs, taxes, etc) it will not happen. We only have to listen to Frank Ginn hem and haw in front of the Athens Chamber of Commerce, to realize what power these people have over our lives.

stogiefogey
stogiefogey

Sure money might be a factor but it seems like issues having to do with alcohol and drugs cause the Georgia  legislature to seize up in a paralytic state. The agony over Sunday package beer sales a couple of years ago and the current cannabis oil hand wringing, for example. They think they're saving us from hellfire.

RichardKPE
RichardKPE

Kyle,


If the Brewery was a big business (like, oh I don't know, the Atlanta Braves), the government would give them the ingredients, a parking lot, a new office building, and an additional $3 billion in tax subsidies.

LogicalDude
LogicalDude

"Donations to Gov. Nathan Deal hit nearly $112,000."


I've repeated this over and over.


If it helps Deal's buddies, it can get written into law.   If it doesn't, good luck with the attempt, but the Good Ol' Boys are runnin' the show. 

JFMcNamara
JFMcNamara

Maybe the brewers need to increase their bribes.  Republicans back whoever gives them the most money whether national, state or local.  This is one industry versus another industry.  Form a coalition and raise money. Put on your big boy pants, stop whining and get with the program.

JFMcNamara
JFMcNamara

@Kyle_Wingfield @JFMcNamara , No, they are not, but there is a reason Republicans are known as the party of big business and the rich.  Either way, in Georgia the Democrats have had no power in 10 years and every year you write an article about how Republicans don't act like Republicans and pass meaningful republican ideological laws. This is how they are being paid to run the state. After 10 years, you shouldn't have complaints like this.  It should be how they want it.

Kyle_Wingfield
Kyle_Wingfield moderator

@JFMcNamara "there is a reason Republicans are known as the party of big business and the rich"

Yes, there is. It's because Democrats keep telling us it's so.

IReportYouWhine
IReportYouWhine

To put it in proper perspective, prior to this decision, a megabusiness was colluding with our government to stifle local competition. I wonder if this type of conduct extends into other areas of government? Can anyone think of any possible "in the public good" formulation for this? Did it just strike one of our rulers one day that it shalt be?


Did your new stone tablets finally get delivered?

RafeHollister
RafeHollister

@IReportYouWhine Think unions colluding with states to use state authority to force employers to deduct union dues from paychecks.  There are long lists of organizations using government regulations to enrich themselves.



Aquagirl
Aquagirl

Nobody has really identified why we have this problem: about a hundred years ago a bunch of Bible-thumpers influenced politics enough to bring about Prohibition. Bootleggers were born. When people finally woke up and kicked the Bible-thumpers to the curb, the former Bootleggers turned wholesalers by legalizing their racket.


So now, about a hundred years later we're STILL dealing with the aftereffects of mixing religion and politics.


Of course no Republicans will learn this lesson, they're too busy bashing gays or trying to legislate ladyparts. 


The bigger question is why anyone who describes themselves as favoring small government swallows the Republican bait.

LilBarryBailout
LilBarryBailout

@Aquagirl

Got a better alternative?  Maybe the net-neutrality-implementing liberal fascist Democrat party?

UgaAllTheWay
UgaAllTheWay

@LilBarryBailout, do you even know what net neutrality is or means?  I HIGHLY doubt it.  If you did, you wouldn't make such ignorant statements.

eTalker
eTalker

Politicians know they don't have to deliver on campaign promises.  Republican voters will vote for the republican candidates regardless of their actions in office.  Democratic voters will vote for the democratic candidates regardless of what they do in office.  Politics is nothing more than a game for voters and they only look for one thing when they enter the voting booth, R or D.


styymy
styymy

Just like Sunday alcohol sales, Georgia will take 50 years to figure this out.

Hedley_Lammar
Hedley_Lammar

Agreed this bill should be passed


But hey give them a break. There are more important items like clarifying the right to carry laws and Religious liberty bills.


Surely those issues are more important 

Plumb Krazy
Plumb Krazy

You're a funny guy. Free market this, small business that, get government out the way this, less taxes that, yet fuel tax on everybody else yes, small business loans backed by government yes, etc etc etc Chamber nuts arent conservatives. They are freeloaders.

LilBarryBailout
LilBarryBailout

How many legislators now calling themselves Republicans are actually former Democrats?  Perhaps some of that big government mentality is hard to let go.

Hedley_Lammar
Hedley_Lammar

@LilBarryBailout How many legislators now calling themselves Republicans are actually former Democrats?  



A bunch in the South.

Brosephus
Brosephus

 "So, one last time: Why is pro-market, pro-small business, pro-growth SB 63 going nowhere?"

Two reasons:

#1  Wholesalers:  Politicians do not cross the hands that feed their campaigns.  They are not under the Gold Dome to do the bidding and will of the people inasmuch as they are there to please the campaign donors so that they can get more "capital" to aid their re-election.

#2  Voters:  Politicians use that "get government out of the way" mumbo jumbo to get the gullibles to return them to office.  One would think that it should only take one two year term to "free up the market", yet Republicans have been campaigning on that same thing since Reagan was in office.  

There is no free-market capitalism in the US.  That's evident in the whole argument over net neutraility.  What we have is crony capitalism, and the capitalism goes to whomever can buy off the best politicians and get them elected over and over again.  Voters are the means to that end, and you have to sell them something in order for them to back your politician.

PJ25
PJ25

The three-tiered distribution system is so dated unless of course you're a legally required wholesaler. 

MHSmith
MHSmith

What happened to that uh... "FREE MARKET"?

When are you lemmings going to wake up to reality and stop marching to the piping of folks like Sean Hannity?

Repeat after me: There is "NO FREE MARKET".


RafeHollister
RafeHollister

@Brosephus @RafeHollister I know what regulation does, it always limits freedom, that is the point.  Depending on whose freedom is limited, sometimes it is a good thing, but some Grubers out there never met a regulation they didn't think was a good idea.  Net Neutrality is not needed, the net is one of the few things left in America that actually performs as advertised.

MHSmith
MHSmith

@RafeHollister @MHSmith 

I can, do, and will continue to complain. So sit idly by and watch me as I point out how misled so many of the Hannity ilk are in blindly following his rants of "Free Market" malarkey. 

.

Any regulation that encourages or promotes competition in the marketplace or removes anti-competitive laws from the market is well in order and should be passed into law.


.


Anybody who wants or thinks they want, "the market free of government regulation" is a very foolish person. The founders of the country knew what they were doing in writing Article one Section eight of the U.S. Constitution to create a "regulated marketplace"

 



RafeHollister
RafeHollister

@MHSmith Well when you sit idly by and let 300 pages of new regulations be voted into existence, in the dark of the night and without a chance to review and comment, then you can't complain about how the free market is non existent.  We have voted it away.

MANGLER
MANGLER

But as we learned with Citizens United, money doesn't buy power in politics.  So the businesses simply aren't working hard enough to make a profit.  Or something like that.

LilBarryBailout
LilBarryBailout

@MANGLER Is it your contention that prior to the Citizens United decision, money wasn't being contributed by corporations to political entities?

Finn-McCool
Finn-McCool

The wholesalers wield lots of power and you can bet they are ready to lobby against marijuana legalization in this state as well.

Eustis
Eustis

One day you Republicans will figure it out; those Republicans you keep electing are laughing at you while feathering their nest.


"Sucker" might be appropriate.

IReportYouWhine#1
IReportYouWhine#1

Go find your local governments vehicle facility, the place where they keep all their equipment. Looks like something the 82nd Airborne would have, don't it? All shiny and brand new, too.


What in God's name has happened to us? I often wonder if the business climate in Russia would be better than this, simply because they don't have the government revenues that we do. Sure business would fall off substantially but at least you could work on your dealings instead of being forced to comply all day.



Judetheobtuse
Judetheobtuse

In a true representative government, decisions can never be made according to who paid the most money. It has to be about what is best for the state and it's people. Let's hope Georgia legislators can see their way past the thick veil of bribery money and do what's best for Georgia. We will be watching!

FIGMO2
FIGMO2

The legislators should be hauled in front of a news camera to explain why.

I see no justification for their actions. 

quickworkbreak
quickworkbreak

A great example of how special interests so easily outweigh principles.  We're in a sad state.

IReportYouWhine#1
IReportYouWhine#1

Paperwork, paperwork, paperwork. Please remit, please remit, please remit. Sworn affidavit. Must be notarized. Please list all. Please explain this, please explain that. Submit to your audit. Please remit, please remit, please remit.

332-206
332-206

Kyle makes sense.

And shines light on what everyone hates about politics.

MarkVV
MarkVV

At last! One Kyle' column everybody can - and should - applaud.

Bruno2
Bruno2

Kyle--I'm not a beer drinker, so don't really have any "hops" in the fight, but a well-presented argument.  In this hyper-partisan environment that has gotten worse the past 20+ years, it's nice to see a conservative writer call out conservative lawmakers.

I wanted also this morning to issue a challenge that I issued recently to Jay:  How about some point-counterpoint articles from you guys, even if only once a month??  You often write about the same subjects, but it sometimes can be hard to compare and contrast the competing ideas when they aren't presented in a similar context.  I think the religious liberty bill would be a great first effort, since both of you seem to make equally valid points separately.

Thanks, and keep up the good work.

FIGMO2
FIGMO2

@Bruno2

Jay and Kyle did that once but it was in video form...split screen. I, for one, thoroughly enjoyed it. Jay had to concede his mathematical error. Perhaps I'm biased, but in my opinion, Kyle won the day AND the argument.

Caius
Caius

So Republican leaders sold out to the wholesale distributors, just like the Democratic leaders sold out to the same wholesalers. Bottom line it makes no difference if the state legislature is run by Democrats or Republicans, right?


There was a day when we conservatives could depend on most Republicans to be fiscally responsible and battle to restrain the growth of bigger government.  Nationally those days are gone and in Georgia have never been in existent.



RafeHollister
RafeHollister

Pretty obvious in today's America, no matter the party, the voters are pandered to during elections and ignored once the election is over.  Once elected, the jobs of politicians then becomes getting reelected, and for that they need campaign contributions, so the donors control the politicians entirely.  This is why Obama can veto the Keystone, or the GOP can ignore the voters on Amnesty, and the Georgia Legislature can ignore small craft brewers.  


The voters are suckers, because once the next election rolls around, we believe the rationalizations, the blame, and the lies for why they couldn't do what they got elected to do.  We buy their new pandering and promises and the wheel keeps turning, but we never get anywhere.  Just wait til next year, is a perpetual promise.


Starik
Starik

The principles of free enterprise sound good, but when established business meets competition?  See also the Tesla saga.

straker
straker

"because the wholesalers don't want it"


For once I don't have to say anything as your analysis is exactly correct.

TBS
TBS

Kyle

I agree that these breweries should be able to sell direct as opposed to going through a distributor even though I did get a laugh from some of the other points in your article. 

I have no no idea what they are making on average in terms of GP but  these microbreweries have been opening up across GA for several years now.   I'd say the owners / investors must see a market that will result in a return that is worth their investment. If that is not the case then maybe they should be  investing their money elsewhere or they are just not that good at investing as they might think.  Guess each investor would have to speak to their reasons. 

The biggest irony of the article in my opinion is the pointing of of the political donations from the big distributors. Seems in the past you have argued free speech regarding donations and didn't highlight the amounts as something negative but surely you are not highlighting these donations today as something positive.  But in the end I do hope this bill passes and thanks for bringing up the issue. 


Kyle_Wingfield
Kyle_Wingfield moderator

@TBS I figured somebody would bring up the political donations thing. What have I ever said about that? That people should be able to make their donations, and that those donations should be reported so that the public can see them and decide if there's anything wrong. 

As for the brewers' investments: One brewer told me Georgia is a "go big or go home" state because of the way the market is skewed. So, yes, there are people making these investments -- and typically taking on a lot of debt to do so -- because they think they can eventually make money. But it's likely there would be even more investment in this industry if not for a state law that concentrates market power in a few hands. Government shouldn't be subsidizing industry, but nor should it be picking winners and losers and foreclosing investment through its laws.

TBS
TBS

@Kyle_Wingfield @TBS


I think the pointing out of the political donations was more than fair game in-light of how it gets presented one way for one thing and another way for a different issue.  Subsidies: The state via tax breaks and credits does a lot of subsidizing of industry.  Not sure if you classify that as subsidizing but in my opinion that is just another form of it
Again, I do agree with the bill and hope it makes its way to fruition even though I may not agree with all of your points you made to bolster your case. Thanks for the exchange. 

MiltonMan
MiltonMan

As bad as the neo-cons are in this state just be glad that the liberal moon bats are no longer in charge.  Thanks to the GOP at least we can buy beer on Sunday now.

TBS
TBS

@MiltonMan


"no longer in charge"?

When were liberals in charge of the state?

Do you mean Democrats?

If so then you are aware that several of the Republicans in the legislature used to be Democrats, right? 

There are certainly some left leaning to liberal Democrats in the legislature but they never ran this state. They may have been a faction of the Democrats that did run the state but that is as far as it ever went.

1Robert
1Robert

When dems ran the place we were not even allowed to buy booze on a Sunday.  Now someone is bashing republicans over this ?  Maybe both parties need replaced with Libertarians.