Georgia Beer and Legislation

Welcome the first guest blogger, Carly Wiggins. Carly is the Marketing & Sales Director/Co-Founder of Southbound Brewing Company in Savannah Georgia. She has a perfect summary of what the breweries in the state of Georgia are dealing with in the convaluted legislative world.

I was recently asked a set of questions by a local reporter and felt I needed to share in total my responses. I doubt she was expecting the long answer I gave to her, but it was needed to clarify the situation. I hope this will help all of your craft beer lovers understand a little more about our situation in Georgia. The questions she asked where:

- What has business been like since September when the July rules changed?

- Is there anything that you guys put on hold that you’re now going forward with? i.e buying new equipment, hiring staff…

- Since variable priced tours are allowed again are you going back to what you started in July?

- Does this compromise provide a sense of relief for you? What are your general feelings on the matter?

- Will you guys be introducing anything new?

This is quite a complicated situation. I’ll be quite frank with you, this was no compromise. My response may seem long-winded but I think its necessary for you to fully understand our situation. I speak only on behalf of myself here, but I imagine any one else in the brewing community will echo my sentiments.

To understand the “compromise” you need to fully understand what is and has been happening in the state of Georgia and the rest of the United States. Currently, Mississippi and Georgia are the only two states left that are unable to sell their product directly to a consumer. Last year we attempted to pass SB 63 which would have allowed for limited on-premise and off-premise sales at a brewery and for brewpubs to have beer to-go. The bill was completely re-written on the floor and turned into the convoluted mess that got

us into this situation in the first place. Brewpubs were stripped from the bill and direct sales were taken off the table. The legislator’s solution was to allow breweries to sell tours and categorize beer as a souvenir. You could have variable tour pricing and one could have up to 36 ounces of “souvenir” on site and then take up to 72 ounces of “souvenir to go. Although it wasn’t our goal it was something. Especially since before by law we were required to give away free samples of our product if an individual didn’t want to purchase a glass. Breweries spent hundreds of thousands preparing to expand coolers and tasting areas, hired new tour staff, hired new production staff, and submitted operating proposals that were then approved by the Department of Revenue.

Everyone moved forward, happy to have some small change in the system to allow us to bring in a little more revenue. As you know from before, breweries in the state of Georgia take an average of five years to break even due to current laws. We are significantly less profitable than our surrounding states. It’s a huge risk to open a brewery here in this state, but Georgia is our home. We want to be here.

In September, I was actually out at Great American Beer Festival when I heard the news. The Department of Revenue released their interpretation of the law and repealed the ability to have variable tour pricing based on quantities of liquid served. We were devastated. All of that time and money each brewery put in just to have it taken away. We begged for help and were given none. We tried for months without being able to have anything done. Legislators were outraged because it wasn’t their intent, but that’s what happens when you have to twist the language to make the legislation more palatable to those opposing it. I assume you also saw the open records request and what came to light regarding DOR communication on all of this. I’ll let you draw your own conclusions there.

Collectively we began to prepare for another year at the capitol. The only true way to ensure that we would be able to move forward with a sound understanding of intent would be to have it clarified in legislation. Specific rules and regulations with no more grey area. Let me tell you, there is a lot of grey area. We drafted a bill, a whopper of a bill. A bill designed to bring to light many of the issues small brewers are facing in the state. Unfortunately, that bill would never have the opportunity to see the light of day.

It came to our attention that somehow a “compromise” was being created. It was jointly presented to us by the individuals at the capitol and other parties of interest to the industry. It was the ability to amend the bulletin by the DOR. We had been begging for help on this and were told the DOR remained strong in their interpretation. Apparently, these guys had a little more influence on them than the many small breweries did. What timing this displayed as well! Right before we intended to drop our bill into the mix. Personally, I was skeptical. If the DOR can make interpretations and change them at will, then who was to say they wouldn’t change them again? Although we graciously thanked them for the opportunity to have what was already stripped (and previously mutilated from its original intent) returned to us, we felt it was better move forward was true legislative reform defining the rules. We knew the chances were slim, that was nothing new to us. Little did we know how slim they truly were.

We were strongly advised that this was the deal, the only deal. That any legislation we put into play would never even make it to the floor for a vote because of our opposition. Not only that, but if we didn’t accept this compromise we could guarantee that we'd be burning bridges with the leaders that put the deal together and therefore nothing would be passed for many years to come. In order for us to preserve good will at the Capitol with leaders that we have to have on our side, we absolutely didn't have a choice but to take the deal. That’s a tough pill to swallow when you have so many folks working so hard that need even just the smallest of changes to happen to keep the lights on. Of course we tried to sweeten the pot to help our the brewpubs (by adding out what was stripped of SB 63) but were told we were being greedy. Take the deal or no deal at all. Do you really want to ensure all the breweries in the state get nothing for the next five years? So with heavy hearts we took accepted our “compromise” knowing that hopefully we can come back again for clarification next year.

I admit, for those who don’t know much about what is going on it may seem that I’m being ungrateful. You have to understand that in no way shape or form does the DOR even have to move forward with this agreement. There is no set timeline. We have no idea if or when it will be implemented and the brewpubs in the state remain left off the docket again. Even if it does get implemented who is to say they won’t flip flop again!!! You’ve asked if we plan to make changes in preparation for this. The answer is no. We simply can’t afford to continue to make changes that could potentially be taken away from us at a whim. IF this is implemented we will reevaluate at that time. I believe many of the other small breweries in the state will do the same.

In addition, the other points that are being addressed in this agreement are ones that could have been addressed any other time. A prime example is ability to use social media to let consumer know about events. Guess what – that’s called freedom of speech. It’s my first amendment right to do this. Breweries in Texas recently took this to court and won. Its clear that this bulletin needed to be addressed, but not with the loss of our ability to participate in the legislative session.

I’ve recently discovered that I would make an absolutely terrible politician. Apparently, I have more of an activist mind-set, but am I really an activist because I believe we should have the same abilities our competitors do? That we just want a fair chance in the market to compete as our neighbors do? Honestly, that we just want to be able to keep the lights on. So I guess this is me. Activist Carly Wiggins, standing on my soapbox, waiting to be pushed off yet again.

Reprinted with permission from C. Wiggings.