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North Carolina’s Economy Flows on More Than $1 Billion of Craft Beer

Apr 27, 2018 by AFP

If craft breweries suddenly vanished from North Carolina, we’d lose $1.2 billion in annual economic impactGone would be 10,000 jobs and $300 million in annual wages.  

Our state has 130 craft breweries and brewpubs. Only 10 states in the nation have more, and we have the most of all states in the south.  

We have barley, wheat, hops, sweet potatoes, a variety of berries and more locally grown ingredients readily available. Brewers in the Tar Heel State use them to create recipes of national acclaim — which we’re taking time to celebrate during North Carolina Beer Month.  

Imagine what our craft beer industry could do if regulations got out of the way.  

Get out, Government! 

One of the most frustrating barriers to economic freedom for craft breweries is the production threshold for engaging a distributor. In North Carolina, breweries are mandated to find themselves a distributor should their production meet or exceed 25,000 barrels in one calendar year. 

To put that into perspective, Craft Freedom says our state consumes that amount in less than two days. 

A distributor gains ownership over the brand and control over sales, delivery, distribution and quality control during transportation. This costs every brewery almost 30 percent of its revenue and margin. If able to self-distribute, brewers could remove that middle man and sell directly to the retailer.

Our legislators understand this needs to change to allow the brewing industry to run at its full potential. That’s why Raleigh considered House Bill 500 last year. If it hadn’t been gutted by the General Assembly, that bill would have raised the threshold to 200,000 barrels in a calendar year. 

As we’ve talked about before, our state and local governments have put their paws further into the craft beer industry but creating an uneven playing field. When Sierra Nevada and New Belgium received millions of dollars in tax incentives to open shop in North Carolina, they accepted an unfair economic advantage over other craft breweries.  

Government actions like these punish entrepreneurs and small business owners by stifling competition and artificially inflating prices. The consumer doesn’t win here, either.  

Economic Freedom Fighters 

After HB 500 was gutted, efforts to fight the threshold persisted. The owners of NoDa Brewery and Olde Mecklenburg, the two brewers who led the fight to pass the bill, filed a lawsuit soon after the failure.  

Americans for Prosperity-North Carolina continues its own fight against cronyism and corporate welfare. Since taking office in January 2017, Gov. Roy Cooper and his administration have committed taxpayers to more than $167 million in government incentives to pad the pockets of special interests. 

Entrepreneurs in the Tar Heel State deserve the opportunity to pursue their passions and grow their businesses on a fair playing field. Economies can thrive when they’re able to exist without interference. Our breweries should not be hindered by production caps or given unfair advantages.  

April is North Carolina Beer Month, but breweries are an essential part of our state every month, every year. We can’t put their — or any other industry’s— ability to do business freely at risk.  

Let’s stand together and tell lawmakers that their corporate welfare projects in North Carolina must end. Send a message, today.