Beer Fight Brewing Again In South Carolina

Over the past couple of years, the craft beer scene has exploded across South Carolina. This is in part thanks to the hard work of the SC Brewers Guild who has led the charge in getting many of the bills passed that make craft breweries possible in the Palmetto State.

It hasn’t been an easy fight though and it’s far from over. Craft breweries across the state are seeking less restriction, and the SC Wholesalers Association is fighting tooth and nail to keep a tight grip on the industry, and their profits.

After a few key legislative losses, the SC Wholesalers Association replaced most of their leadership team with a new set of leadership. As a result, the SC Brewers Guild and Wholesalers Association were both hoping to build a new working relationship. This would be a huge change from the rocky and adversarial past they shared.

Hopeful of this new relationship, the SC Brewers Guild met with representatives from SC Wholesalers Association to present six bills to change current legislation regarding beer laws and help move both the craft beer and wholesale industries forward. Both hoping for a mutually beneficial compromise (before resorting to an expensive and extensive lobbying battle), the SC Brewers Guild proposed the following:

1. Changing the current limited distribution system to allow breweries to self-distribute and to distribute to a limited area around their brewing location.
2. Franchise reform – Currently, once a brewery enters into a contract with a distributor, that distributor owns the breweries brand and there is no exit clause for the brewery.
3. Lowering beer taxes.
4. Removing the current limit on how much beer people can buy on-site from a craft brewery.
5. Allowing breweries to open up additional taprooms across the state. Currently, breweries are limited to one taproom per owner.
6. Allowing breweries to distribute to themselves, meaning allow them to distribute beer from one location to another if they have more than one location. As the law stands now, breweries can have separate locations but they have to sell their own beer to a distributor who will then mark it up 30-50% and the second location would have to buy back the marked-up beer.

After further discussion, review, and a commitment to a mutually agreeable compromise, the first three of the six bills were eliminated. And, yesterday a South Carolina Senate Judiciary Subcommittee met to hear testimony from both SC Wholesalers Association and the SC Brewers Guild on the three remaining bills.

Wesley Donehue, owner of Frothy Beard Brewing Company and member of the SC Brewers Guild, was present to give testimony. Many of the points in his testimony were centered around free-market enterprise and that the SC Brewers Guild is simply meeting demands created by the market, an inherently American principle.

Most of this arcane restriction comes from the Palmetto State’s antiquated three-tiered system which was set up in the 1930s after the 21st amendment repealed prohibition so that the government could control the flow of alcohol. In this system, breweries are the first tier and are restricted by the second tier which is the wholesalers. A system that Donehue thinks is going away on its own, “We aren’t here to argue the antiquated nature of a system set up in 1933. Frankly, that system is coming to an end anyway.”

During his testimony, Donehue insisted that instead of fighting this system, the SC Brewers Guild is simply asking for the ability to grow and meet the demands of their consumers, stating “All we want is the ability to work our tails off and grow. We aren’t asking for any special handouts. All we want is for government to get out of our way so that we can meet the demands of the consumers. That’s how the free market is supposed to work. That is how America is supposed to work.”

A point which SC Brewers Guild Executive Director, Brook Bristow, reiterated in his testimony, “I don’t want to assert that our intention is to completely change the rules that we need to play by. Far from it, in fact,” he continued, “But we also need to find ways to nurture the growth that we’re seeing, while also finding ways for us to stay competitive with neighboring states who have found those kind of solutions to these same problems.”

After hearing from all sides, the committee decided it would be best if the SC Brewers Guild and SC Wholesalers Association try to work together over the next two weeks to come up with agreed upon compromised language.

A move which the SC Brewers Guild says they’ve been trying to do for the past five months and has failed.

Heading into today’s meeting, the SC Brewers Guild was under the impression that SC Wholesalers supported the off-premise bill (bill four above), and the last two proposed bills would be fought in legislature. However, upon meeting, the SC Wholesalers changed position and refused to support the bill they once told the Guild they would.

Disheartened, Donehue took to Facebook to ask for help, “They hold all the cards – they have all the power. We have eighty-something breweries right now in South Carolina and the majority are all small businesses who don’t have the money that the wholesalers have and can’t throw thousand dollar checks at our legislators like the wholesalers do.”

Watch the full video below:

The next S.C. Senate Judiciary Subcommittee meeting is scheduled in two weeks and Donehue plans on launching and leading a full grassroots campaign to help the South Carolina craft beer industry grow and get past the restrictions they are currently under.