N.C. Brewers Sue to Free the Brews

shutterstock_162190298.jpg

North Carolina brewers currently face a self-distribution cap, which means that once they get to 25,000 barrels of production per year, they are required to sell their beer through a wholesaler. (R Street's Jarrett Dieterle previously wrote about this law here). The North Carolina beer community attempted to secure legislation raising the self-distribution cap, but ultimately the bill died in the state legislature. Now the brewers are back, and this time they are bringing a lawsuit to overturn the cap, as reported in the Washington Post:

Once a North Carolina brewer sells about enough beer to fill an Olympic-size swimming pool in any given year, state law says it must hand over distribution to another company. Attorneys for two growing craft breweries argued Tuesday that’s unconstitutional.

Lawyers for Olde Mecklenburg Brewery and Noda Brewing Co. filed a lawsuit in 2017 after failing for years to get state legislators to change the beer distribution law — a change opposed by beer wholesalers who represent one of the state’s most powerful political interest groups.

The Charlotte breweries claim the law is unconstitutional because once they’ve sold more than 25,000 barrels in a year, they’re required to give up pricing and sales control of their products to middlemen for virtually as long as their beers are brewed. Brewers hitting that limit must sell everything to a wholesaler, which then sells to stores or taverns

“This is an economic protectionism scheme designed to enrich one private party at the expense of another; a private party that contributes millions of dollars in campaign contributions to this General Assembly,” attorney Andrew Erteschik said....

Erteschik said the law violates constitutional provisions allowing people to enjoy the fruit of their labors by barring breweries that become successful from choosing whether to keep delivering their own beer through their own networks or making a business decision to outsource that work to others....

Read the rest here.