Yet another piece of legislation currently in front of the North Carolina General Assembly is Senate Bill 155, affectionately known as the "Brunch Bill.” As with each of our Legal Updates, this post takes aim at Senate Bill 155's intended change and what is perhaps more meaningful than when you can imbibe with your eggs Rothko.
Make no mistake, should House Bill 500 be installed, the North Carolina craft beer industry is looking at a complete paradigm shift. Here's why.
Regardless of whether the cap on production for self-distribution is ultimately lifted, the elements of a decision to distribute are unique to each brewery. For the young ones, the path to cashflow/break-even is paved with healthy on-premise sales and a brand-centric focus to its wholesale distribution. Irrespective of its timing, a brewery's decision to engage a distributor should come from a position of strength.
House Bill 67 is an act to increase the production cap as applied to limits on a brewery's right to self-distribution from 25,000 barrels of beer per calendar year to 100,000 barrels per calendar year. Many among us are aware that the legally imposed limit on a North Carolina brewery's right to bring its own beer to the retail market has become a point of major contention over the last several years.
Pay-to-play schemes are an inherent disadvantage to small breweries. When tap and shelf space—finite retail resources—are allocated to the highest bidder(s), new and niche brands have to find alternative, more costly paths to market or forgo retail opportunity altogether.
As of last year, the United States is home to more than 4,225 craft breweries. Those breweries are directly responsible for creating nearly 122,000 jobs, with North Carolina contributing 10,000 of those on its own.
So, not only is the craft beer industry healthy and growing, the craft beer industry is tense.
Until recent years, business owners were limited largely to banks and angel investors for purposes of access to capital. “Blue sky” laws, as they are known in the securities realm, are well-grounded in the notion that companies offering some variety of stock to the public should shoulder the burden of providing their suitors with adequate disclosure about various components of the business. The development of the crowdfunding model, however, has shown proof-of-concept notable enough for federal and state governments to more pragmatically accommodate investment crowdfunding.
In the past few years, farm breweries have made their rise within the craft beer community. We’ve seen the likes of Jester King, Rogue, Stone and others purchase and lease farmland in an effort to secure the supply and quality of their ingredients, and to pay homage to the sustaining principle of localism.
We understand! Taking care of the administrative stuff is easy to forget. But don’t let a fine or court appearance get in the way of enjoying your time on the water or otherwise with your family and friends. I've comprised a list of popular recreational activities along with some North Carolina's applicable laws and regulations to heed while retreating outdoors this summer.
Here at Carolina Craft Legal, it’s not just about beer. Well, at least not all the time. We take great pride in working with individuals that embody the spirit of small business, forward thinking, and passion for entrepreneurship. We’ve highlighted this in some of our previous blog entries and today we’re going to take you down yet another path we haven’t yet covered: licensing agreements.
The question, for local brewery owners and malt beverage suppliers, is why not open their own distribution companies in lieu of signing with independent distributors? Would that not allow each of them the flexibility to continue protecting their respective brands and preserve the jobs they've created in an effort to accommodate their own success and growth?