Georgia’s small brewers get hosed again

A Creature Comforts Brewing Company employee fills a 32-oz. crowler for a customer to take home Aug. 27 in Athens. (AJC Photo / Curtis Compton)

A Creature Comforts Brewing Company employee fills a 32-oz. growler for a customer to take home, Aug. 27, Athens. (AJC Photo / Curtis Compton)

Georgia’s mandated middleman monopolies are at it again.

Perhaps no more market-oriented piece of legislation than Senate Bill 63, a.k.a. the “Beer Jobs Bill,” cleared the General Assembly this year. But that says more about the dearth of such bills in this, the alleged “best state in the nation to do business,” than the brilliance of this particular one.

SB 63 was held up by lawmakers beholden to the alcohol-wholesalers lobby at every turn before finally gaining approval as a watered-down, near-beer version of itself on the final day of the session. It wasn’t much: Breweries won the chance to give away limited amounts of their beer as “free souvenirs” included in the price of “educational and promotional brewery tours,” a needlessly complicated compromise only Rube Goldberg could love. Given the way even limited “sales” of beer can boost a small brewery’s bottom line and help it grow, though, at least it was something.

The operative word: was.

Out of the blue, the state Revenue Department recently issued a rule to clarify this muddle. Its chosen form of clarity? Tearing a hole clear through the law.

The final text of SB 63 allows breweries to “charge varying fees for the brewery tours.” It says nothing about how those fees are to be determined. The Revenue Department now says breweries “may not vary tour prices in such a way that the tour prices are clearly and directly tied to the market value of the alcohol furnished.”

Although one can contort the vague words of SB 63 just enough to get to the place Revenue’s rule-writers arrived, this policy runs plainly counter to the spirit of the law evident throughout this year’s debate.

It does, however, fit neatly with the wholesalers lobby’s desire to kill such legislation entirely. Only the willfully naive could believe they didn’t lift a finger to ensure the new rule was written just so.

Likewise, only a politician with a check in his pocket from Georgia Crown, Eagle Rock, General Wholesale, et al. could believe it’s better to maintain a system that grants the distributors regional monopolies for handling a given brewer’s products — a license to print money that falls just shy of the Federal Reserve’s — than to loosen regulations and encourage the growth of Georgia’s beer makers.

So it’s time to stop asking such small questions as “how much of his own beer should a brewer be able to sell on his own property?” and move on to some bigger questions, like these:

Why does Georgia still grant regional monopolies for moving a given brand of beer or liquor from a manufacturer’s warehouse to a retailer’s stock room?

Why would Georgia want to discourage brewers from opening or expanding in Georgia, just to protect businesses whose logistical and promotional functions would be performed even without the three-tier system?

Why would any Georgia lawmaker vote for meaningless resolutions condemning Obamacare’s mandates, but stand in the way of repealing or reforming the rigid, anti-competitive mandate that producers and retailers work through wholesalers?

Finally, what should we call such lawmakers, since “free-market Republicans” obviously doesn’t apply?

Reader Comments 0

66 comments
fordsbooks
fordsbooks

As someone who is a Native Atlantan and currently lives in Colorado, where small breweries are everywhere, I'd agree that the "good ol' boy" network of politicians still rule Ga. The breweries out here thrive, and bring in tons of tourist dollars because of their ability to compete against each other. Open up the competition between them, by allowing different kinds of tours, and let the guests decide. 

patriotdog
patriotdog

The difference in Herman Talmadge, Lester Maddox, Sonny Persue, Nathan Deal is not much. Ga politics has been a good ole boy network from the Capitol to the Gov mansion for an awful lot longer than I've been around which is a damn long time.

RaymondJ
RaymondJ

Wasn't this the same legislator that decided it should also deem which diseases get the privilege of having a medical oil marijuana drop treatments?  When you see Gatekeeper Mentality growing, follow the money, it corrupts, absolutely.  

     -Take it from an old retired auditor.

HeyThere
HeyThere

Well said, and thanks for calling out the "free market Republican" BS. This isn't a left-right issue it's common sense. 

RetiredParamedic
RetiredParamedic

In Jawjuh, the 'good ol' boy' state, the fat cats get fatter and the struggling continue to struggle. 

AvailableName
AvailableName

And the irony is that they are being screwed by the party in charge, the party of small, free market government, the party that lies.

Blackland
Blackland

When the small brewers can give away more money to GA politicians than the Liquor Monopoly they will get their laws passed. In the meantime we all pay for this hidden tax to distributors thanks to Republicans (and the Dems before them).

AvgGeorgian
AvgGeorgian

Kyle,


I usually argue with you, but unreservedly admire this brave insightful post. 

AnsweredTHIS
AnsweredTHIS

I was at RedBrick the other night when WSB was doing a story about this exact same thing.  Kyle I cant believe I am saying this but thanks for the article! 

2geniuses
2geniuses

Ironically, 5seasons still has Hunter Hill IPA pouring tonight. A beer brewed in celebration of the baby step bill SB63. (Kyle, I recall seeing you there the night they first tapped that brew) Wary of our corrupt lawmakers, they also have a beer called "Please make sure to vote for a State Rep who supports our local GA Breweries IPA" Not surprisingly, this long name beer is off the charts bitter. The hops are so dry, you feel like you need to drink a gallon of water. Ask Crawford why so bitter.

Red state pride voters are not voting for conservatives, they are voting for the Good ol' boy network. If you voted for the likes of Deal and Cagle, you voted against home grown small business and shame on you for assuming your vote was conservative. Your vote was corrupt.

Dusty2
Dusty2

Sorry about those small brewers. I can't be of much help.. I don't care for most alcoholic beverages.  A little Manichevitz maybe.  With fruitcake ahhh!!


But don't touch my Coca-Colas.  Now that is good stuff! 

Patrickscomment
Patrickscomment

@Dusty2 But you can! Contact your reps and let them know that even though you don't partake, you still believe in small business and positive support of the GA economy. 

LilBarryBailout
LilBarryBailout

This is one of those issues that will tell us much about how "real" and how conservative state Republicans are.

Much like the Democrats' luddite  opposition to the sharing economy and services like Uber.

Wascatlady
Wascatlady

Another example of our "small government" Republicans.

SaveAmericaFromItself
SaveAmericaFromItself

Another reason why I'm a Libertarian.

Keep bloated, lobbyist-corrupt, out-of-control government out of our lives !

BullDawgLover
BullDawgLover

Great article!!!  A lightly regulated free market is the best environment for both business and citizen/consumers. Georgia Republicans including Governor Deal who can influence the DOR (and has) stepped way over the ethical line here. As this article and every other article I have read clearly points out the only reason for the DORs rule is to protect wholesalers who put money into the politicians pockets.

Starik
Starik

The Georgia brand of conservatism isn't about a political philosophy - it's about actively preserving the privileges of currently profitable institutions and wealthy individuals.

BitterEXdemocrackkk
BitterEXdemocrackkk

@Starik  Ditto North Carolina also...finally got republicannots voted in after 140 years and now they've turned

blue...good God it's a dang mess!

abmagic
abmagic

Why do breweries shut down their to go tours completely? Couldn't they offer only one of their currently multi-tier system of tours and continue to sell? That way, the price of the tour isn't tied to the market value of the beer taken to go? 


I would still love to visit Creature Comforts this weekend and be able to walk out with a six pack of Tropicalia and have the retail sale all go to them. If they (and all other brewers) completely shut down the to-go tours, then the distributors win 100%. 


Seems like completely cancelling the to-go option is cutting off their nose to spite their face

Area Woman
Area Woman

@abmagic Because most tour visitors are actually regulars who visit at least once a week, if not more. It'll be a hard sell to those folks to only offer a more expensive option, and they'll just quit coming as frequently or even altogether. It's just smarter to stick with the thing a majority of visitors want. 

That said, this doesn't actually get rid of to-go tours. However, a brewery can't offer more than one tour price point at the same time if that price-point change is due to market value or quantity of included beer. It can be based on some other value-added component (merchandise, a band playing, etc.).

They can also do a tour that costs more and includes to-go beer as long as it's the only tour option that day i.e. special bottle release. They just can't run the regular tasting tour at the same time. 

LogicalDude
LogicalDude

I believe the word you are looking for is "puritan", Kyle. 


Or perhaps the Baptist/Beer lobby.  It's all about the money, and for the puritans in government, to show their constituents that they are "against alcohol!" when they line their pockets with beer money from the monopoly. 

Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude Very little of this is about religion. Maybe for a handful of legislators, but for far more it's about the campaign contributions.

Jimmyliscious
Jimmyliscious

Wild Heaven just sent out an e-mail to a friend cancelling their to go tours after spending 18,000 dollars on upgrades and improvements specifically for those tours. What a bunch of B.S.

Visual_Cortex
Visual_Cortex

I'd post "agreed fully, Kyle" but is there anyone reading this -- beyond Big Beer -- who doesn't?

Jefferson1776
Jefferson1776

Sometimes freedom of speech works in mysterious ways..... CUnited

Mandingo
Mandingo

Lobbyists have the best government money can buy. Every man for himself.

RafeHollister
RafeHollister

The small brewers have been hosed again, as you state, but the people get hosed perpetually.  

RafeHollister
RafeHollister

Our systems of government are sick, and that is why folks are so angry.  The government of the people, by the people, and for the people is no more.  It is the government of the donors, by the donors, and for the donors: the people be damned.  The people get only their wishes that also coincide with the wishes of the big donors. 


i don't think there is any solution to the problem that the donors will approve of, so not much hope.  We may have to resort to pitchforks and rebellion.  Seems we are left to vote for the politician that has the most donors we agree with.

Jimmyliscious
Jimmyliscious

@RafeHollister  Yep, Chamber of Commerce spending 100 million to attack Republicans in the upcoming elections. Because big business needs more cheap labor. But the Democrats are the champion of the middle class. B.S.

Jefferson1776
Jefferson1776

So are you going to take on the funeral directors ?  They are a bigger scam, all day long.

clkoontz
clkoontz

Anyone interested in this subject should watch the documentary Beer Wars.


You should note that SABMiller owns Miller and Coors, and inBev owns Anheuser-Busch and is close to buying SABMiller. If that happens, all of the large breweries will be owned by a single corporation. Think about how that will influence the antiquated three-tier distribution system.


https://en.wikipedia.org/wiki/Beer_Wars 

https://en.wikipedia.org/wiki/Anheuser-Busch_InBev

https://en.wikipedia.org/wiki/SABMiller


Beer Wars is a 2009 documentary film about the American beer industry. In particular, it covers the differences between large corporate breweries, namely Anheuser-Busch, the Miller Brewing Company, and the Coors Brewing Company opposed to smaller breweries like Dogfish Head Brewery, Stone Brewing Co., and other producers of craft beer. Also covered is how advertising and lobbyists are used to control the beer market, implying that these things harm competition and consumer choice.

Throughout the film there is a theme that the smallest breweries have next to no chance to compete due to the sheer volume of advertising and outdated beer distribution laws. The original laws demanded a three tier system to separate the powers of selling beer. The law demands that the beer brewer cannot deliver directly to the retailer, supposedly creating a separation of powers resembling the US government's congress, judicial, and executive branches. The film claims these laws are now inhibiting growth of smaller brewers and therefore allowing the largest brewers (Coors, Anheuser-Busch, and Miller) to maintain an oligopoly on beer.

The film was written, produced, narrated, and directed by Anat Baron, former head of Mike's Hard Lemonade. The film is now available on DVD.

Penses
Penses

There is one solution I can think of to such problems: the elimination of sovereign immunity. It is because people in government are not really accountable for their actions that we see this kind of behavior. Unfortunately, human beings are prone to do evil - to put themselves above all others regardless of the harm done. So you have to threaten them with dire consequences to deter them, since they obviosuly won't do what is right out of love for their fellow man.

Kyle_Wingfield
Kyle_Wingfield moderator

@Penses I'm curious: On what grounds would you sue/prosecute someone at DOR over this? 

Claver
Claver

@Kyle_Wingfield @Penses And if they could be sued, which one would they worry more about (and, therefore, try to please):  A powerful monopoly with a deep pocket or a cash-strapped small business?

Hedley_Lammar
Hedley_Lammar

Monopolies are NEVER a good thing.


The ones the cable companies have are just awful. And its why their service absolutely sucks. 

M H Smith
M H Smith

@Hedley_Lammar 

OMG! sing a chorus of I saw the light.  That also includes government monopolies as well!

straker
straker

"a politician with a check in his pocket"


And that answers all your questions.

Rory_Bellows
Rory_Bellows

Further, this is more than the small brewery business. This is about how corrupt our state is and how it only encourages more of the same. It's like a PR campaign, inviting the wealthy to have it their way in Georgia. 

RoadScholar
RoadScholar

Kyle, isn't the law in Georgia limiting a company/person to own and operate only two liquor stores at a time? If so, why?

MANGLER
MANGLER

@RoadScholar A company can't sell liquor in more than 2 locations.  So in the case of Tower or Total Wine, they may have more than two locations, however, only two of them have liquor.  There is no limit on how many locations in the State can sell beer and wine.  I know the Total Wine's in Kennesaw and Alpharetta have beer, wine, and liquor, but the Total Wine in Dunwoody only has beer and wine.

Isolator70
Isolator70

@RPG7301 @Kyle_Wingfield @RoadScholar  This law is one of the dumbest. It hit Total Wine as well. That is why the Dunwoody store does not carry liquor, only beer and wine. And Kyle, to answer your question, Towers and Greens, to name a few, had to divest to different company ownership when the law was passed. They kept the similar names, but only two could be owned by any one corporate entity.

Kyle_Wingfield
Kyle_Wingfield moderator

@RPG7301 Interesting. I'd say "weird," but nothing about Georgia's liquor laws could ever strike me as weird again.

RPG7301
RPG7301

@Kyle_Wingfield @RPG7301 Ha. You don't have to limit that to "liquor" laws. There is plenty weird to go around in Georgia laws. Trust me.