Self-Distribution

Illinois On the Brink of More Distillery Freedom

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Several years ago, Illinois lawmakers enacted legislation that allowed craft breweries to self-distribute a small portion of their beer without having to go through a distributor. (Illinois has generally been on a bit of a reform kick in recent years when it comes to their alcohol laws). Now, several lawmakers are proposing to do the same for craft distillers in the Land of Lincoln. Illinois Policy has the story:

Craft beer’s popularity is being joined by its distilled cousin to become the “next big thing,” and the Illinois House just passed an update to state liquor laws so Illinois doesn’t miss the party.

A bill removing major hurdles for craft distilleries passed the state House, 108-2House Bill 2675 was backed by a bipartisan group of lawmakers including chief sponsor Rep. Tom Demmer, R-Dixon, chief cosponsors Rep. Mike Zalewski, D-Riverside, and Rep. Jonathan Carroll, D-Northbrook…

Under the Liquor Control Act of 1934, Illinois mandates a “three-tier” liquor distribution system that separates producers, distributors and retailers. This bundle of laws protects the middle-man and ensures the functions of each tier don’t mix. Lawmakers moved to allow limited self-distribution for smaller beer brewers in 2011, and HB 2675 has a similar aim for craft liquor.

The ability to self-distribute has been vital to the craft brewery boom across Illinois, and craft distillers hope HB 2675 will bring them the same opportunities…

Read more here.

Agreement Reached to Lift North Carolina's Self-Distribution Cap

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As our team has previously covered, North Carolina caps the number of barrels that breweries in the state can self-distribute at 25,000 annually. This means that once a brewery exceeds that barrel limit, it is forced to work with middlemen distributors in order to sell its beer in stores and restaurants in the state. Unsurprisingly, this creates a whole host of problems for growing breweries. While previous attempts to lift the self-distribution cap have failed in the state legislature, the AP reports that a deal to lift the cap has been reached (although the cap still remains in place at a higher level, rather than being scrapped entirely):

Small North Carolina brewers and alcohol wholesalers raised glasses on Thursday to what they call a legislative compromise that allows the breweries to keep control of their products longer as they grow.

Legislators from both political parties and industry representatives announced an agreement in General Assembly bills filed this week to let these craft breweries sell double the amount of their beer annually on their own compared to what current law allows…

The legislation would allow the creation of a new classification of brewers that can self-distribute up to 50,000 barrels a year. While these mid-sized brewers would still be able to sell up to 100,000 barrels, distributions above the first 50,000 barrels would have to be performed by a wholesaler.

Read the rest here.