When beer changed in Georgia

By ZACH THOMAS

Georgia is a tough market for craft breweries. A three-tier distribution law is used, which means that breweries have to sell to distributors, who sell to retailers where the customers can buy their favorite cold ones.

This made it hard for breweries to start up in Georgia because in order to make sales, a brewery must get their beer sold in retailers, which is not an easy task for a new brewery. All of that changed however when Senate bill 85 was passed into law.

The law allows breweries to sell their beer on-site to customers in a capped quantity of 3 million ounces, which equates to about one case per person per day. It also allows the breweries to have restaurants on-site as well.

distribution
Here, Matt Krengl is giving a tour of Red Hare Brewery. Before the new law passed, breweries were legally required to give tours and were very limited on how much beer that they could let customers sample. Photo by Brianna Reid

This law has been a long time coming. Because of Georgia’s three-tier system, distributors in Georgia make a lot of money due to the laws protecting their position. With that status being threatened, their push back through lobbying played a heavy role in keeping Georgia behind other states when it comes to brewery laws.

“Getting anything is a plus,” Jekyll Brewing brew master and co-owner Josh Rachel said. “In some states breweries can sell kegs on site, but we are lucky to get what we got.”

Public opinion is that the fight between the lobbyists and the breweries is an all-out brawl between the two parties. However, that isn’t necessarily so.

“The vote to pass Senate bill 85 was unanimous,” Georgia Beer Wholesalers Association Assistant Director Martin Smith said. “It actually has been a very collaborative effort between both parties. Every lobbyist was outspokenly for this bill. The reason it took so long is because we didn’t want to pass a law that wasn’t perfect or created problems. Good legislation takes time.”

The law had to work for both the breweries and distributors alike. Breweries get to sell direct, but the cap protects the distributers, which is a good thing. Distributers aren’t the enemy of craft breweries. In fact, they are actually good for them.

“The distributors actually help us a lot,” Rachel said. “They helped us get here, and I have relied on them for support. I don’t have a fleet of trucks to distribute with, so it actually helps us get our product out there.”

The desire to sell direct to consumer however is not completely diminished. The ability to sell direct gives breweries more business opportunities to pursue that they wouldn’t have if they couldn’t sell direct.

“Being able to serve on-site creates another revenue stream,” he said. “It’s the ability to expand our portfolio in house and offer a larger variety of beers in smaller quantities that you can only buy on-site.”

This bill is good for the industry on both sides of brewing and distributing. The patrons of these breweries also benefit because brewers now have more ways to amplify their experience.

“It’s good for the whole industry,” Smith said. “It allows the brewers to grow and provide a better experience for their customers, and if the breweries grow then the distributors benefit too. They are all partners to make sure the industry thrives.”

It’s hard to say what will come next for this journey of the beer industry in Georgia, but this law was very much a step in the right direction for both parties involved.

 

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