R Street's Jarrett Dieterle has previously written about North Carolina's "Raise the Cap" initiative, which has sought to overturn the state's cap on the amount of beer breweries in the Tar Heel State can self-distribute. After legislative efforts to reform the law failed, state brewers brought a lawsuit against the rule. According to the Charlotte Business Journal, the suit has uncovered illegal activity between some beer makers and distributors:
A lawsuit brought by Charlotte's largest craft brewers has uncovered illegal activity amid efforts to overturn North Carolina's self-distribution laws, according to an attorney representing them.
Initial discovery exposed a "secret agreement" between Anheuser-Busch and distributor R.A. Jeffreys that gives sales of those beers priority over all other products - illegal under a 1989 state law, says Drew Erteschik, co-counsel for The Olde Mecklenburg Brewery, NoDa Brewing Co. and the Craft Freedom initiative.
Those craft brewers are suing North Carolina, alleging the state artificially suppresses economic growth through two unconstitutional laws - the distribution cap and franchise law.
The court's ruling will impact brewers' ability to increase production and continue to distribute their own products. Current law requires brewers to hand over their rights to private distributors if they sell more than 25,000 barrels
Read more here.