Like many indie beer makers across the country, Georgia craft brewers are looking for more self distribution rights and more flexible partnerships when it comes to wholesaler agreements. Georgia Senate Bill 163 was introduced on February 14, 2023, aimed at reforming a variety of laws around selling, distributing and even giving away craft beer (the greatest gift of all). To bring attention to SB 163 — which is being dubbed The F.O.A.M. Act (Fair and Open Access to Market) — the Georgia Craft Brewers Association recently announced a petition to get the attention of both beer lovers and state lawmakers.
You can sign the petition right here, but what exactly are these GA beer makers requesting?
SB 163 would build on the legacy of SB 85, which was passed in 2017, allowing breweries to sell beer directly to consumers in their taprooms (3,000 barrels (bbls) of beer per year directly to customers). As a measure of competition, neighboring North Carolina allows breweries to sell, deliver and ship up to 50,000 bbls of beer per year directly to customers. So, Senate Bill 163 would strengthen Georgia’s craft brewer self distribution rights.
It would allow “small brewers” to distribute up to 3,000 bbls per year to retailers within a 100-mile radius without contracting with a distributor. It would allow brewers and brewpubs to donate products for charitable events, and it would allow brewers to sell and ship beer to other licensed breweries and brewpubs and receive shipments of beer produced by other beer makers. The bill would also allow a small brewer to discontinue an agreement with a wholesaler by providing at least 30 days’ written notice and a variety of other measures (read them here, Section 6). “Small brewer” means a brewer or brewpub whose sales of products to the brewer’s or brewpub’s wholesaler do not exceed 15 percent of a wholesaler’s total sales in the prior calendar year.
The bill was introduced by Georgia Republican Senator Chuck Hufstetler, but it failed to gain traction during the last session. The Georgia Craft Brewers Association wants to change that with a petition. This is how the trade org explains it on its website:
The F.O.A.M. Act (Fair and Open Access to Market) would:
- Allow for limited self distribution for small brewers. 36 other states currently allow for self distro, and it has been a proven model for helping small breweries serve their local community and consumers and build their brand. Distributors would remain an integral part of getting product to market, especially after a brewery has reached a certain point where traditional distribution channels make sense.
- Reform beer franchise laws in Georgia. Georgia lacks fair franchise laws that govern how a small brewer enters into a relationship with a distributor. Currently, once a brewery agrees to distribute with a certain wholesaler (the ONLY route to market), it is nearly impossible to terminate that agreement or switch distributors. This hampers the ability to adapt to changing market dynamics, negotiate better terms, or explore new partnerships.
- Remove the daily to-go limit of 288 oz. per person. Every bordering state but South Carolina has no limit, or a higher limit. This is an arbitrary limit that limits a small brewer’s ability to thrive.
- Allow for direct charitable contributions of beer. It is currently not legal for a local brewery to support their community by donating their product directly to a charitable event for a charitable cause. This is another barrier to small brewers being able to serve their local community. Urgent action is needed to keep this vital industry moving forward. These proposals will give local breweries the flexibility they need to not just survive, but thrive.
Last year, an investigative report by the Georgia Public Policy Foundation found that self distribution was one of the most important and difficult hurdles to clear for the GA brewing industry. The Georgia Public Policy Foundation is a free market public policy think-tank based in Atlanta, and the organization even produced a video on the subject:
As you might imagine, Georgia wholesalers are against the bill. From a David Williams article on Capitol Beat (a nonprofit news service operated by the Georgia Press Educational Foundation):
Martin Smith, executive director of the Georgia Beer Wholesalers Association, pointed to the rapid growth of the craft beer industry in the Peach State during the last decade as evidence craft brewers are doing fine under the current law. From just 10 breweries statewide as recently as 2011, the number of breweries in Georgia has mushroomed to more than 150, including such high-profile brands as Sweetwater and Creature Comforts, Smith said.
“Georgia is already one of the nation’s top places to brew beer,” he said.
From a Fox 5 Atlanta story via Tyler Fingert:
On the other side, not everyone thinks the state law should be changed. The owner of a local distribution company told FOX 5 that he believes it would be problematic if breweries could sell their own beer. He says retailers have told him that would cause issues if they had to deal with each brewery individually.
There will be semi-convincing arguments from both sides, but we here at CBB see Senate Bill 163 heralding a new era of opportunity and growth for Georgia’s artisans of ale. With the ability to self-distribute, small breweries can forge direct connections with their customers, fostering community and spurring local economies. This legislation not only acknowledges the significant role craft breweries play in Georgia’s culture and economy but also paves the way for these businesses to thrive independently. Sign the petition right here or don’t. The choice is yours.