American for Tax Reform Joins Effort to Raise Cap on Craft Beer Distribution | Eastern North Carolina Now

    Publisher's note: The author of this post is John Trump, who is a managing editor for the Carolina Journal, John Hood Publisher.

    Grover Norquist is using his considerable influence to push North Carolina lawmakers toward reforming restrictive laws governing craft beer.

    Norquist, founder of Americans for Tax Reform, is calling for an end to the state's "protectionist, anti-consumer restriction on craft brewery self-distribution."

    Norquist in 1985 founded ATR, which promotes a system in which taxes are simpler, flatter, more visible, and lower.

    He sent letters to the state's 170 legislators in support of Craft Freedom, a recent news release says.

    Brewers around the state, some 180 of them, hope to even the proverbial playing field with wholesalers, a movement - craftfreedom.org - with a goal of eliminating a state law requiring brewers to procure a distributor once their beer output reaches 25,000 barrels.

    ATR's entry into the Craft Freedom fight - joining the John Locke Foundation, the Civitas Institute, and the National Federation of Independent Business - marks the fourth nonprofit, free-market organization to support raising or eliminating the state's archaic limit on brewery self-distribution, a needless regulation that hurts entrepreneurs and impedes investment, hiring, and economic growth across North Carolina, the release says.

    Norquist calls North Carolina's brewery self-distribution limit a "glaring example of harmful regulation that inflicts economic harm, while serving no purpose other than pure protectionism." He compares the law to Obamacare, noting "the arcane law barring self-distribution for breweries beyond a certain size is a state-created disincentive on business growth and the new hiring that comes with it.

    "Allowing this protectionist, anti-consumer restriction on craft brewery self-distribution to stand would be both indefensible and completely uncharacteristic of the legislature."

    "It's a compelling day for our cause," Craft Freedom spokesman John Marrino of The Olde Mecklenburg Brewery in Charlotte says in the release. "We are honored ATR has joined us in this fight. To see such support from an organization as accomplished in achieving reform as ATR lends confidence that North Carolina's craft brewery marketplace will finally operate without anti-free market barriers. Both ATR & Craft Freedom look forward to a cap repeal and a freer North Carolina for its homegrown breweries."

    A recent survey of 800 likely voters, prepared for Craft Freedom by Strategic Partners Solutions and overseen by Republican political consultant Paul Shumaker, finds the more voters learn about the impact of the production cap on North Carolina breweries, support for the production cap nearly completely vanishes.
That goes for people who voted for President Trump or his Democratic rival Hillary Clinton.

    "When the voters who favor the production cap learn that producers lose their brand and marketing rights," says the survey, "support for the cap diminishes to 1.6 percent" - two Republicans, three unaffiliated voters and eight Democrats from the 800 voters surveyed.

    The N.C. Beer and Wine Wholesalers Association will continue to push back. The wholesalers say the current arrangement works well, and removing the cap would provide a competitive advantage to a small group of North Carolina breweries to the disadvantage of everyone else, including other small breweries that appreciate the convenience of having a larger company handle direct sales and marketing.

    State Rep. Michael Speciale, R-Craven, has filed a bill that would increase the amount of beer smaller craft breweries could brew and sell without having to contract with a wholesale distributor.

    House Bill 67 would increase the cap from 25,000 barrels per year to 100,000 barrels per year. A barrel of beer is 31 gallons.

    At least three North Carolina craft breweries - Red Oak in Whitsett, and Olde Meck and NoDa in Charlotte - are approaching the 25,000-barrel threshold. The brewers, Carolina Journal reported, want to continue control over their distribution and plan to halt growth if the law isn't changed.