South Carolina

Tackling ‘SC’s antiquated alcohol laws’: Changes could mean more local craft beer

Beer brewers across the state sent a message to South Carolina lawmakers last week: deregulate the industry.

South Carolina has seen significant growth in the brewery industry over the past decade. The list of four demands, sent to legislators in the S.C. General Assembly, is asking for updates to South Carolina’s beer production laws.

Brook Bristow, executive director of the SC Brewers Guild, said the growth has been good, but the legislative changes will make South Carolina a more attractive place for breweries. The guild is focusing its efforts to pass four legislative goals, all aimed to loosen regulations and grow the economic benefits of breweries.

South Carolina’s antiquated alcohol laws are strangling a growing industry that creates jobs and revitalizes struggling communities,” a news release said.

The four demands include opening up how breweries are taxed, customers purchasing to-go beer at the brewery, how many brewing locations can be owned and how many locations a brewery can have. Bristow said these changes will put South Carolina more in line with other states with successful craft brewing industries, like North Carolina.

The changes to the industry

Bristow said there are many ideas out there to help the industry grow, but these four came from conversations his organization has had with brewers across the state. The guild has a legislative committee that meets, discusses and acts on the pressing needs within the industry.

“You ask different brewers, you’ll get different answers,” he said.

One of the biggest changes would be to give a tax break to brewers, lowing the beer tax on producers from $0.77 per gallon down to the national average of $0.288 per gallon. While this would lead to an immediate decrease in revenue, the hope is to make the state more competitive when attracting craft breweries.

The second and third would allow craft brewers to move beer between two of their own locations without having to use a distributor. In South Carolina, distribution laws require a third party to handle beer as it passes from producers to consumers. Some exceptions have been made for taprooms within a brewery.

Allowing for multiple taprooms serviced by one brewery would make it easier for producers to expand locations without also having to increase production facilities. The second change would allow breweries to open up more production facilities to meet growing demand.

Kevin Varner, the owner of Hunter-Gatherer Brewery & Ale House in Columbia, said the tax break and the location changes would most directly help his brewery. When a brewery chooses an area, it often has to do with customer bases, but lowering the taxes to the national average would allow businesses to expand, he said.

Varner owns two locations both in Columbia under the same name, so allowing for easier movement of beer between locations would be great for his business. Currently, he has to pay a distributor to take the beer and then buy it back, increasing the financial and time burden of owning multiple locations. For him, deregulation here just makes sense.

“We’re so tightly regulated, that trying to manipulate that for a small benefit is a little absurd,” he said.

What it means for citizens

Craft brewing is becoming a major driver of economies and tourism in the state, producing millions in taxable revenue. In 2016, the Brewers Association said S.C. breweries had an economic impact of $650 million. The craft brewery scene here has dramatically grown since then, and the amount of breweries also has increased.

Varner wants to see changes that give an even platform for competition, especially as national brands like Anheuser-Busch purchase smaller breweries like Goose Island or Wicked Weed.

“We’re out here playing catch-up,” he said.

One of the changes deals directly with how beer drinkers buy beer. Right now, consumers cannot buy as much beer as they want directly from the brewery. The hope is to allow for more direct purchase intended for consumption, not re-sale. This could benefit smaller breweries that are having a difficult time getting into a portfolio.

If they’re able to decrease regulations and the cost of operations, Bristow believes the Grand Strand could benefit from craft breweries’ opportunities to expand in the area.

While the industry is growing in Charleston, Columbia and Greenville, other areas across the state are lagging behind. Myrtle Beach, for example, doesn’t boast the same craft brewery scene that the other large cities in the state do.

For Bristow, this is an economic and cultural issue in South Carolina. Bristow said he expects to see growth in beer production in Myrtle Beach. Adding that even people who do not drink craft beer benefit from the tax revenue and from the effect a brewery has on the surrounding city.

“When a brewery comes into a neighborhood, other businesses tend to come,” he said.

Beer tourism is one such industry, bringing people into an area to try the latest beer. In areas with lots of breweries, like Charleston, there is an industry for expert guided tours.

In July, Dave Epstein, owner of New South brewery in Myrtle Beach, said people make visiting the local brewery a part of their vacation.

“There are people that, when they come to a town, one of the first things they do, they Google where the local brewery is,” Epstein said.

Bristow knows changing the law can be challenging, but he hopes to work with the General Assembly to free up the beer industry. The attitude toward craft breweries is changing as legislatures begin to see the benefit of breweries, he said, a contrast to just a few years ago.

“It’s very craft beer friendly now,” he said.