Mmmmm....beer
From today's paper:
WHITSETT — A brewing fight over North Carolina’s beer distribution laws has its roots in Guilford County, with executives from two local businesses duking it out behind the scenes at the General Assembly.Red Oak Brewery has stepped up its lobbying efforts to convince legislators that beer makers should be able to distribute up to 60,000 31-gallon barrels without being required to go through a wholesale distributor.
But wholesalers such as Greensboro’s R.H. Barringer Distributing say the General Assembly should hold fast to the current 25,000-barrel limit or lower it to avoid possible conflicts with federal laws.
“Our concern is that someone who has a Red Oak could have a poor Red Oak experience,” said Eric Hice, vice president of operations with the company. Red Oak’s beer is neither filtered nor pasteurized, processes that help brews last longer whether in a bottle or a keg.
“If it’s not handled right, we have real taste problems,” said Bill Sherrill, Red Oak’s owner. In particular, Sherrill said, it’s critical the beer is refrigerated from the time it’s brewed until it reaches a customer.
Beer distributors, Sherrill argues, send usually unrefrigerated trucks out with dozens of kegs from different brands and can’t ensure beer from small brewers is handled or marketed properly.
But as Mark Craig, president of R.H. Barringer, walks between walls of beer cases stacked 18 feet high in the company’s warehouse, he points to brands from around the country and overseas that his company sells in North Carolina.
“Longboard comes from Hawaii,” Craig said, pointing out a few cases shipped from the Kona Brewing Co. “It’s fine; it’s taken care of.”
Comments (4)
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Of course the law that limits self-distribution and mandates distributors is anti-competitive!
As Mark notes, the law was enacted in order to slow the flow of beer and spirits. Note also that the primary function of competitive markets is to speed up the flow of consumer goods, i.e. to satisfy consumer demand. Therefore, the point of the law was to erect an artificial legal barrier in the distribution of beer and spirits. It is, virtually by definition, anti-competitive.
Now, perhaps that's okay with folks in these parts. Remember, the state of North Carolina maintains a monopoly on the retail sale of hard liquor. As would be expected, the price of liquor here is higher than in states in where private retailers can sell scotch, gin, brandy, etc. High prices inhibit demand, as for all other products. I can't imagine why it's desirable North Carolinians to pay more for liquor, but voters here have allowed their state government to maintain this anti-competitive reality for decades.
So yes, of course the law that R.H. Barringer supports is anti-competitive, but it's consistent with North Carolina's curious support for such laws when it comes to alcoholic beverages.
Posted on March 15, 2009 2:07 PM
It's hard not to root for Red Oak. To see why, let's contrast the two sides' arguments. Red Oak states its case on the basis of its own business concerns. Its reason for not wanting to be forced to go through a wholesaler has to do with its product and its customers (and of course its own bottom line).
In contrast, Barringer argues its case on the basis of state law and its claim that it'll be tougher for the government to collect taxes if brewers like Red Oak get to distribute their own beer. Well, that's certainly touching. But shouldn't we let the government make its own case about collecting taxes? If we take that issue off the table, what business justification do Barringer and other distributors have for opposing an increase in the cap? Is there any sense in which consumers would be harmed by Red Oak delivering its own beer? Until Barringer can come up with something along those lines, the rest of us should view its argument skeptically.
Posted on March 15, 2009 2:20 PM
nice article it will be interesting to see if there is a groundswell of support for change but seeing the campaign contributions from the craigs and their mom , it will get very interesting.
For me i am on side of red oak doing their own distribution, why not. The beer distribution is as close to monopolistic as it comes all you need to do is check out the prices of beer between bud and miller on similar products practically the same unless on sale.
Posted on March 15, 2009 5:44 PM
Don't forget the the larger politics of national brands being threatened with market share loss by micro brews. There's a lot of money that changes hands via lobbyists employed by big beer.
Posted on March 15, 2009 11:37 PM