The success of an American craft brewery depends on several factors: the quality of its products, the effectiveness of its marketing, the support of its fans.
Less considered but often far more important than any of these for small to mid-size breweries, however, is law. In many cases, the codes and regulations of state and local government can work against a brewery, impeding its ability to grow and succeed.
So it is in Georgia.
Due to what some say are archaic interpretations of the structure of the three-tier system by state legislators, brewers in the Peach State are required to sell all the beer they produce through a distributor; even customers who visit a brewery can’t legally purchase a draft pint to sip or a bottle to take home. Georgia is one of only two states in the entire country in which brewers are restricted in this way (the other is Mississippi). But brewers, always the crafty ones, came up with a solution.
“The workaround was to sell customers a souvenir pint glass, which could then be filled with beer,” says John Cochran, president and co-founder of Terrapin Beer Co. in Athens, Georgia.
In a rare response to this clumsy circumvention and at the urging of the state’s craft brewers, lawmakers put in place rules last year that allowed breweries to charge for tours of their facilities and offer those who purchased a tour “free” beer at the tour’s conclusion. Local craft beer fans were rescued from closets full of dusty souvenir glassware.
“It was kind of a compromise: ‘We don’t want to call it selling beer, but we’re allowing you to give away beer on tours,’” Cochran says.
The new law also allowed breweries to offer tours at variable pricing, essentially enabling them to charge customers based on the type and quantity of beer they wanted. The way this worked at Terrapin, Cochran says, was that customers were offered an option: they could pay $12 for a tour and 36 ounces of beer to be consumed on-premise; $12 for a tour and a six-pack to go; or $20 for a tour, a sixer and beers in the tap room.
Then last September, the Georgia Department of Revenue issued new rules saying brewers couldn’t base the price of tours on the gifted beers, and any brewery that violated the order could potentially lose tasting room privileges. Brewers were, understandably, pissed, with many claiming that the Georgia Beer Wholesalers Association had coerced the DOR to pull back the law.
“There was an article in the Atlanta Journal Constitution about an open records request that showed the wholesalers were stonewalling conversations between the Georgia Craft Brewers Guild and the Department of Revenue,” Cochran says. “You can make your own conclusions.”
After several months of battle, the Georgia Craft Brewers Guild and the Georgia Beer Wholesalers Association reached an agreement Tuesday guaranteeing that the Department of Revenue will issue new rules that once again allow brewers to sell tours at variable prices based on the type and number of beers offered.
The deal will also allow the sale of brewery tour tickets through third parties; enable breweries and distilleries to sell food onsite; permit brewers and distillers to host special events at their facilities; and okay the use of social media to alert customers about said special events or to inform them where to buy their products.
That last point bears repeating: until now (and until the new rules go into effect), brewers were forbidden from telling their customers where a brewery event was taking place. Such information could be construed as “providing a service of value to a retailer”—an action that violates Georgia’s three-tier system.
So, progress. But concessions were made: in exchange for an adjustment to Department of Revenue’s regulations, the Georgia Craft Brewers Guild agreed to cease any attempts to update legislation this year. Any additional changes to Georgia law concerning craft breweries will have to wait until the next legislative session, which doesn’t take place until early next year.
While most of Georgia’s craft brewers treated news of Tuesday’s agreement with a resigned shrug, many are disappointed more wasn’t accomplished.
“From our perspective, we had high hopes for 2016,” says Taylor Lamm, owner and brewmaster for Lake Country Brewing Co., a brewery-in-planning scheduled to open this summer in Greensboro, Georgia. “The state had a lot of momentum to pass laws that would be beneficial for brewers in Georgia … At the end of the day, we’re better off than we were two days ago, but I had hoped for more.”
“We lost all the momentum we had going into the legislative session,” Lamm says. “Another year now will pass until Georgia gets in line with the rest of the U.S. We still are very behind even our bordering states.”
But hey, at least they’re not behind Mississippi.