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Georgia’s brewers speak out on battle over beer laws

Two founders of Peach State breweries voice their frustrations and say laws have led to job cuts, wasted money and stalled growth.
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We posted yesterday about the ongoing (and bafflingly difficult) struggle on the part of Georgia’s craft brewers to implement commonsense reforms to the state’s archaic beer laws. Today, two founders of Peach State breweries voice their frustrations over the back-and-forth changes to the law regarding onsite sales and tour pricing—and over the state’s approach to laws concerning its breweries in general:

When changes were made to Georgia’s beer laws early last year allowing brewers to charge variable pricing for brewery tours, how did that affect operations at the brewery?

“When the changes went into effect last year, we did not alter operations that much but did change the tasting room dramatically. Fortunately, we did not add any equipment like many other breweries did; however, we did add staff. Our tours/tastings went from being opened three hours, two days a week, to being open four hours per day, five days per week. We hired a full-time tasting room/event manager and more staff to work the tasting room. We saw more people coming through the door, enjoying the beer and taking it home to share with others. The changes were very confusing for customers because of the language of the law. We couldn’t sell beer; we could only sell a tour that, in turn, came with free beer, and customers had to decide upon arrival what they wanted. We were looking into getting a Crowler machine in August, but when the [Department of Revenue] bulletin hit, I thankfully stopped that before we got too far.”
– Jason Santamaria, cofounder of Second Self Beer Company in Atlanta tweet

“We made a number of organizational changes with regards to how we operated our tour rooms, from tiered tour pricing for consumers to tour combination packages. We also invested in people and equipment, adding on a full-time, onsite manager, as well as creating two new, part-time positions to support our ability to now have a mechanism for people to leave with beer. We invested in a Crowler machine as well as the design of those labels and purchased the necessary inventory to make it all work.”
– Chris Herron, CEO and cofounder of Creature Comforts Brewing Co. in Athens, Georgia tweet

What were your thoughts when the Department of Revenue issued its bulletin in September that basically nullified those changes?

“I was upset and disappointed, but not surprised. This has been an uphill battle with our legislators and the DOR from the beginning. Later, when two local papers discovered that the DOR had been influenced by the [Georgia Beer Wholesalers Association], it all made sense. What was most upsetting was that with the loss of extra revenue, we had to cut back tour hours, and we had to let our tasting room manager go after only a few months.”
– Jason Santamaria tweet

“We were extremely disappointed and surprised, as we had every reason to believe we were operating well within the confines of the regulations as written by the DOR. The legislative intent of the law was clearly to let consumers sample our products onsite and to take some beer to go, but why that was not being handled as a simple sales transaction highlights the influence of the GBWA in our state politics. Essentially, what we have for production breweries in Georgia is a vaguely written law that provides a roundabout way to allow consumers to sample product onsite and leave with a limited amount of packaged beer, but without allowing us to actually sell the beer. The law is confusing to customers, to our own staff, and to the people trying to enforce the law, as this new ‘deal’ will be the third interpretation of it by the DOR in seven months.”
– Chris Herron tweet

Do you feel the agreement that was reached this week between the Georgia Beer Wholesalers Association and the Georgia Craft Brewers Guild was fair?

“I do not. The agreement that was reached was with a forced hand. Georgia brewers, as a collective, went into this session trying to make real changes and update Georgia’s laws to something on par with other states. This ‘deal’ was a promise to get us back to where we were at the end of the last session in exchange for withdrawing what we proposed—leaving us with the watered-down bill we got last year and the hope that the promise comes true. In my opinion, it’s backward movement for our cause.”
– Jason Santamaria tweet

“Politics doesn’t always necessarily seem to be about fairness as much as it does results. Under the leadership of the Governor’s office and at the request of legislative leaders, our understanding is that [the Georgia Craft Brewers Guild] accepted what appeared to be the only result they could get this year. There were not any negotiations directly with the GBWA as we understand. We have built a strong and mutually beneficial business with our particular wholesaler partner, and have a lot of great friends in their network, so it is unfortunate that the GBWA is our adversary when it comes to us getting the basic rights that 48 other states have with regard to direct-to-consumer sales.”
– Chris Herron tweet

Georgia and Mississippi are the only two states in the country that don’t allow brewers to sell directly to customers who visit their taprooms. Do you feel this holds you (and the state) back, economically, as you compete with brewers from states with more lax liquor laws?

“Yes. We are in this because we love beer, and we want to make great beer for our customers. We would love nothing more than to give them more and to have a closer relationship with them. I see the growth in neighboring states within their respective brewing industries, which were built on having a closer tie to their customers. I see Asheville—a city that’s one-tenth the size of Atlanta—with three times as many breweries. They survive and have created more brewing jobs because their legal landscape allows for an agile, small business to sell direct to their customers. Breweries are not just manufacturers. They’re destinations for friends to hang out, meet after work, and bring home beer to enjoy safely with others. Currently, we’re double-taxed on the beer we give away through tours. Visitors from out of town are curious about trying local beer from Atlanta. Every week, people come straight to us because they want to visit the brewery, hear our story, try the beer, and buy what they like to take home and share with friends. Once they choose the beer they want, I have to send them to a separate store to purchase it. This not only breaks the customer experience but hurts our local breweries in the process.”
– Jason Santamaria tweet

“Yes. Industry data shows that small breweries in other states are 2.5 times more profitable per barrel of beer produced than Georgia breweries. Not only does that mean that breweries aren’t inclined to open here, it means that the ones that do have a much harder time growing and competing in the marketplace. Keep in mind too, that there is no requirement that a Georgia wholesaler must pick up a brewery. As the number of breweries continues to grow, and without a way to operate a business out of their own four walls, there is a very real risk that wholesalers could choose to not pick up additional breweries and simply keep the small businesses in our craft beer industry from having any way to operate . . . that is how much power is being left in the hands of the GBWA and in my opinion, it’s pretty scary.”
– Chris Herron tweet

4 Comments

  • Bob says:

    Thank you for publishing this piece. As a Georgia resident, I wonder what can possibly help to put political pressure on the legislators in the future. Perhaps more pieces like this and more publicity can help do the trick.

  • Steven says:

    Meanwhile, wineries in Georgia have long been allowed to sell directly to consumers, and prior to the legislation that lifted the Sunday retail sales ban at the local level, they were allowed to sell on Sundays. To simply the issue, the breweries want the same regulations that apply to wineries to apply to them. SB 63, as it was originally written, was sat on by the Lt. Governor, who has received political contributions from those opposed to allowing breweries in the state to operate in the manner they do in other states. The lobby group for the alcohol wholesalers continue to claim that allowing the breweries to sell directly will “wreck the three-tier system”, but meanwhile it didn’t happen when the wineries in the state were giving such freedoms and it hasn’t happened in the other 48 states that allow it. It took the GCBG and its’ member breweries taking to social media to get their supporters to contact the Lt. Governor and other key legislators and demand that the measure not be tabled. Then the bill was gutted and altered to the point that the original intent was gone and it saw craft distilleries added to the measure and brewpubs removed from the measure. While what ended up being passed was far from perfect, it was a start (It took a few tries to get to this point, as legislation involving alcohol has a tougher row to hoe. It took several tries in the early part of the 00s to get the measure to scrap the 6% ABV max on beer and what finally passed was slightly altered.). The Lt. Governor is widely expected to run for Governor in 2018, and hopefully the beer drinkers of this state keep the entire SB 63 matter in mind come election time.

  • […] Georgia’s brewers could start selling sandwiches to offset the fact that industry data shows breweries in other states are 2.5x more profitable per barrel of beer produced than Georgia’s brewers are due to current laws.  I hope they sell a lot of them. […]

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