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Beer distribution
Story Date: 3/17/2009
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Source: Mark Binker, THE NEWS & RECORD, 3/15/09
A Triad microbrewery is waging a quiet battle behind the scenes at the General Assembly this year. Red Oak Brewery has stepped up its lobbying efforts to convince legislators that breweries should be able to distribute up to 60,000 31-gallon barrels without being required to go through a wholesale distributor. But wholesalers say the General Assembly should hold fast to the current 25,000-barrel limit to avoid possible conflicts with federal laws. Eric Hice, a vice president for Red Oak, and Bill Sherrill, Red Oak's owner, say it's a matter of taste. 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 Sherrill. Hice said Red Oak has little choice but to push for a change. He said the company's production will shoot up well above the 12,000 barrels of beer it currently makes per year when the company opens a bottling line.
In a letter to lawmakers, Red Oak argued that beer wholesalers were too big to care about small brewers. Mark Craig, president of wholesaler R.H. Barringer Distributing in Greensboro, said he takes exception to the letter’s contents, particularly a “wildly inaccurate” estimate of what his company paid to acquire another beer distributor. Craig notes that his company's warehouse contains cases of beer from Red Hook, a Seattle brewer that doesn’t pasteurize its beers. North Carolina last raised the self-distribution cap in 2003. Red Oak was then pushing for a 100,000-barrel ceiling but met stiff resistance from wholesalers, unionized drivers and larger brewers such as Miller, which has a plant in Eden that brews millions of barrels per year.
Bills to raise the self-distribution limit filed since 2003 have made little progress. Sen. Katie Dorsett, D-Guilford, said she “is leaning toward” introducing such a bill by the end of this month. "If we really want to promote small business, we have to give them room to grow,” Dorsett said. But Sen. Don Vaughan, also a Greensboro Democrat, said he worried that crafting a bill to allow Red Oak to pursue its plans could unintentionally hurt other companies such as R.H. Barringer. “I don’t want to do it to the detriment of another industry,” he said.
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