SC bill to attract craft brewers to state stalled, supporters remain optimistic

Greenville NewsMay 22, 2014 

Joseph Ackerman and Matthew Ellisor are co-owners of Conquest Brewing, which opened as Columbia's first production craft brewery in January.

TIM DOMINICK — tdominick@thestate.com Buy Photo

— An overhaul of South Carolina’s beer production laws has been delayed — but both brewers and wholesalers say they believe a bill designed to attract a West Coast brewery’s $31 million expansion will pass before legislators break for the summer.

The “Stone Bill” — a nod to the nation’s 10th-largest brewery looking to expand eastward from its San Diego-area location — was the subject for a state House and Senate committee on Wednesday, which ultimately put the bill on hold until next week.

The legislative session is nearing its end in a couple of weeks, but the bill isn’t off track, state Rep. Derham Cole of Spartanburg, a sponsor of the bill, told The Greenville News.

“We still have time to get it done this session,” Cole said.

The South Carolina Beer Wholesalers Association — which objected to language that it said would jeopardize the bill’s legal standing and threaten the three-tier distribution system — is reviewing the proposed law and will meet with craft beer advocates via a conference call on Friday to go over changes.

The wholesalers association “is firmly in support of passage of language within the next two weeks that will attract craft brewers to our state,” executive director Julie Cox told The News.

The state Department of Commerce has backed efforts by communities in South Carolina to attract Stone’s investment, and several communities, including Greenville, have responded to the brewery’s request for proposals.

The bill was assigned to a six-member conference committee of both the House and Senate, which is considered the final hurdle to clear. Three of the six members are sponsors of the bill.

Originally, advocates sought to amend the state’s brewpub laws to allow large-scale beer producers to serve food — but more importantly, unlimited amounts of beer for consumption on site.

Brewery laws today allow a brewery to make and distribute unlimited quantities but to serve only small amounts on site, a provision they say hurts their ability to attract visitors and make secondary income.

Brewpub laws — created in 1996 to grant flexibility to brew beer and serve it along with food — only allow production up to 2,000 barrels per year and prohibit distribution.

A change in brewpub laws would have allowed 500,000 barrels, which is what San Diego-area Stone Brewing Co. requires as it looks for a location for a $31 expansion its says will ultimately create 400 jobs.

Another large brewery — Deschutes of Portland, Ore. — has indicated it plans to expand eastward, as well, much like Sierra Nevada, Oskar Blues and New Belgium have done with multimillion-dollar investments.

Stone wants to both produce a large amount of beer and open an expansive restaurant, billing the location as a tourist destination much like its home in Escondido, Calif.

The concern among distributors was that amending brewpub laws would create another exception to the state’s beer regulations, opening the door for erosion of the three-tier system used in South Carolina, said Brook Bristow, a lawyer who represents the South Carolina Brewers Association.

The three-tier system, in place since the end of Prohibition, requires producers to sell their beer through wholesalers with only a limited number of exceptions.

Brewers and wholesalers have traded proposals over the past few days. The wholesalers are reviewing both versions and will talk Friday, Cox said.

Brewers are moving away from changing brewpub laws and instead are aiming toward allowing breweries to serve products as brewpubs do, though they would still have to sell the vast majority of their products through distributors, Bristow said.

The change would allow breweries to buy other products through distributors and sell them on site, which has been a point of contention, he said.

“It’s something that we're going to have to work on,” Bristow said.

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