Why SC’s potential craft beer expansion just fell flat
South Carolina’s craft beer enthusiasts can hang up hopes of seeing satellite taprooms open later this year, after a series of legislative proposals aimed at fueling a craft beer boom in the state have fallen flat.
A state Senate hearing on the proposed changes to South Carolina’s craft beer laws was canceled Thursday after representatives of craft breweries, retailers who sell alcohol and the companies that distribute their product for sale failed to reach a compromise.
Breweries and wholesale distributors have been at odds over proposed legislation breweries say is needed to keep the booming industry thriving. Wholesalers contend the changes would undercut their business and give breweries unnecessary advantages in the market.
The proposals likely won’t meet an April 10 deadline to pass the Senate over to the House in time to become law. Lawmakers still can consider the brewery bills next year, however, said state Sen. Ross Turner, R-Greenville, and the chairman of the committee considering the proposals.
“(T)here’s still going to be some movement, I think, and, hopefully, they’ll figure it out where everybody can get along together,” he said. “(The) new way beer is sold and crafted, there’s going to have to be some compromise somewhere to make room for these small businesses.”
The craft beer fight has come about because breweries want more control over their product.
Breweries contend state law holds them hostage to wholesalers, making it extremely difficult to break contract while distributors control the price and volume of their beer sold to retailers.
Supporters say the changes would put some of the power back in the hands of craft brewers.
In the legislative proposals, brewery advocates set out to change S.C. law to:
▪ Allow breweries to open standalone taprooms, where they could serve beer without having to brew on-site or host a tour of the permitted facility.
▪ Remove the 288-ounce limit on how much beer customers can buy from a brewery to go. That’s the equivalent of a 24-pack case of 12-ounce cans., and
▪ Let breweries transfer beer between facilities without having to go through a distributor that charges a mark-up.
Brewers say the proposed changes would lower the burden for new businesses trying to enter South Carolina’s craft beer market and those looking to expand. Wholesalers argue the measures undermine the state’s three-tiered regulated sale of alcohol, where wineries, breweries, distilleries and importers sell to a middleman — a wholesaler — to distribute their product to retailers.
On social media Thursday, Wesley Donehue, an owner of Charleston’s Frothy Beard Brewing Company and former political aide to the S.C. Senate, said a compromise had fallen apart.
Donehue said wholesalers were willing to allow breweries to transfer beer between their facilities for storage, but would not allow them to sell the beer at another location. For example, Holy City Brewing in Charleston could not transfer beer from its Dorchester Road location to sell at its new facility near Park Circle.
“They want their cut,” he said of wholesalers. “We literally have to sell it to them and then buy it back from them at a 40 to 50 percent markup. It doesn’t make a lot of sense.”
Donehue said the S.C. Brewers Guild backed away from being allowed to sell unlimited beer to go, settling instead for the opportunity to sell a pony keg to people for a party or wedding or use at home. But wholesalers would only allow breweries to sell up to two cases to go.
Lance Boozer, executive director of the S.C. Beer Wholesalers Association, blamed the brewers Thursday for the impasse. Both sided had reached an agreement, but a S.C. Brewers Guild representative on Wednesday proposed new terms, “including adding requests that were removed as part of the original compromise,” Boozer said in a statement.
“At this time, all parties are continuing to work toward a compromise to responsibly advance the beer industry in this state as a whole,” Boozer wrote in a email to The State.
Since the state passed the so-called “pint law” that allows breweries to sell pints of beer on site, South Carolina’s craft beer industry has ballooned to more than 80 breweries and brewpubs.
The industry now produces more than 108,000 barrels of beer a year, and directly employs some 4,400 people across the state for an annual economic impact of $780 million, according to the Brewers Association.
This story was originally published March 28, 2019 at 5:32 PM.
