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State on cusp of allowing direct sales by breweries
Craft beer makers getting good news
Georgia state seal W

In 2017, craft breweries appear to be on the verge of getting just about everything they’ve wanted from the Georgia General Assembly in terms of the ability to sell beer directly to consumers.

Senate Bill 85, which passed the Senate on a 49-to-2 vote Feb. 2 and has now been given a substitute version by a House committee, would allow a brewery to sell up to 3,000 barrels a year of malt beverages directly from its taproom. A beer barrel is defined as 31 gallons, so that’s 93,000 gallons a year, enough to quench many a thirst. The beer and ale would be sold by the glass, bottle, can or other container, not literally in barrels.

Because of a separate House bill that would have given direct sales permission to manufacturers of distilled spirits such as whiskey, rules for distillers were folded into the new version of Senate Bill 85 adopted Tuesday by the House Regulated Industries Committee.

Until now, breweries have been prohibited from selling beer and ale directly to the people who drink it. But provision was made for brewers to provide samples or “tastings” to people who take brewery tours. After lobbying by small-scale brewers, such as Eagle Creek Brewing Company in Statesboro, state lawmakers over the past several years approved steps liberalizing limits on the tastings. Now, if enough representatives in the House approve the bill, and if changes made there are accepted by the Senate, the required pretense of tours and tastings will be eliminated.

After that, craft brewers might seek further changes in the law in response to market changes that will inevitably occur, said Nancy Palmer, executive director of the Georgia Craft Brewers Guild.

“But in the broad stroke, we are over the moon about this compromise and this legislation, and I anticipate that … assuming that it passes, this will be a huge step for Georgia breweries and we’ll be able to sit back and watch this industry grow in an exciting and healthy way for several years,” Palmer said Friday.

The Georgia Craft Brewers Guild represents 45 member businesses, including all of the small independent, or craft, breweries and almost all of the brewpubs in the state, she said.

 

Three-tier exception

Senate Bill 85 would not eliminate the three-tier system, designed to keep manufacturers, distributors and retailers separate, which has been part of the law in Georgia, as in many other states, since the repeal of prohibition in the 1930s. But if passed and signed by the governor, the current legislation would allow brewers to skip wholesalers and be their own retailers up to the 3,000-barrel annual limit.

Breweries, as distinguished from brewpubs, would still be prohibited from serving any other maker’s beverages but their own. Besides selling for consumption on-premises, breweries would also be allowed to sell up to one case to-go to any one customer each day. A case is defined in the bill as 288 ounces. That is the equivalent of a 24-pack of 12-ounce cans, but other size containers or combinations would be allowed, Palmer said.

But unlike brewpubs, breweries are not limited in how much beer they can distribute through wholesalers.

Eagle Creek Brewing Co. owner Franklin Dismuke converted his business, founded in 2013, to brewpub status in November.  So, Eagle Creek now features a pub-style taproom that serves beverages and food to paying customers, instead of relying on brewery tours and revenue from distribution of its canned product. Becoming a brewpub, Dismuke said, was necessary for Eagle Creek’s survival. In making the switch, he took advantage of a 2015 change in state law, which allows brewpubs to produce up to 10,000 barrels of beer a year, including up to 5,000 barrels for distribution through wholesalers.

At the time of Eagle Creek’s change from craft brewery to brewpub, its brewing capacity was about 1,100 barrels a year. So, Dismuke has a lot of room to expand production and distribution within the brewpub limits. He doesn’t regret converting, he said, even though the 2017 legislation would open up more opportunities for a brewery. The bill states that the changes would take effect Sept. 1.

“Due to our size, the brewpub was an instant option,” Dismuke said. “If this passes, I’d still had to have waited until September before we’d be able to do anything. This allows us to take advantage of it immediately, being a brewpub, and we’re not planning to go above 10,000 barrels in the next year to two.”

If Eagle Creek approaches 10,000 barrels annual production, Dismuke will seek a change in the law or consider converting back to a full-fledged brewery, he added. For now, he has added three kitchen employees and affiliated with “Painted Chef” Travis Phillips, who oversees the Eagle Creek kitchen while operating his own catering service and restaurant in Register.

 

Brewpub to-go

Senate Bill 85 would make one change affecting brewpubs. Through local ordinances, city and county governments can allow other restaurants to sell beer and wine as take-out items, but brewpubs are currently prohibited statewide from selling their beverages for takeout, Palmer said. The new legislation would allow take-out from brewpubs at the discretion of local governments.

Dismuke has been following the bill’s progress and has contacted area legislators about it.

“This will be a major, major win for the brewing industry in Georgia,” he said, adding that there will probably be “a lot more breweries opening up in the state.”

The legislation sets no limit on the size of breweries that participate, so industrial-scale breweries could also sell directly to consumers, within the same limits on volume.

 

Distillers too

Passages added in the House substitute version would allow a licensed distiller to sell up to 500 barrels of spirits direct to consumers each year, with a barrel in this case being a larger, 53-gallon, measure. A distiller would be allowed daily take-home sales of up to 2,250 milliliters, the equivalent of three 750-ml. bottles, to each customer.

With the Legislature in session Friday, Bulloch County’s three representatives were not reached for their views on this legislation. Sen. Jack Hill, R-Reidsville, voted for the Senate version, and serves on the Senate Regulated Industries and Utilities Committee, which favorably reported the bill to the Senate.

 

Herald reporter Al Hackle may be reached at (912) 489-9458.

 

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