Craft brewers vs. big beer

| April 21, 2017

by Thomas Mills, Politics NC, April 20, 2017.

Back during World War II, the US Army held military exercises called maneuvers in Anson County. My grandfather had a peach farm in Lilesville and also held the franchise for several brands of beer. The Army contracted with him to turn one of his packhouses into a PX. In exchange, the Army would only sell my grandfather’s beer.

That arrangement made my grandfather a lot of money, but didn’t sit well with a lot of beer distributors from neighboring counties. One of those distributors sent a young ambitious salesman named Charles “Chink” Smithson to try to get their beer into the Lilesville PX. Chink was told that he needed to see Fred Mills and he could find him at a country store down the road from the packhouse every afternoon.

So, Chink went down to the store and said he was looking for Fred Mills. The owner pointed to the back of the store to a man sitting on a feed sack with a group of other men. Chink, who was about 5’7”, walked up to my grandfather and said, “I want to put my beer in that PX.” My grandfather, who stood about 6’4”, got up and told Chink with a menacing growl, “I don’t think we need your beer in my packhouse and I don’t think we need you in Anson County anymore.”

On a side note, about fifteen years later, Chink was informed that his niece, Penny Martin, was marrying a man from Anson County named Fetzer Mills. He responded, “Not if that boy’s any kin Fred Mills, she’s not.” Somehow, he got passed it.

A similar fight just played out in the General Assembly this week. Craft beer brewers, who make up a rapidly growing industry in the state, wanted to change a law that requires them to contract with a distributor after they brew more than 25,000 barrels of beer. The craft beer makers wanted to raise the limit to 200,000 barrels. The distributors did not.

Beer distributors in North Carolina have long been a political force in politics. They’re veterans of numerous fights to expand access in a state that not that long ago was largely dry. Their lobbying arm, the Beer and Wine Wholesalers Association, is run by Tim Kent who’s been around the legislature working for business advocacy groups for more than 25 years.

Craft brewers believed they had a good case and a good chance. They’re a growing enterprise in North Carolina, creating jobs and bringing revenue, and the current legislators claim to be free-market conservatives. Besides, their demands, raising the cap from 25,000 barrels to 200,000, didn’t seem that outrageous.

That’s not how the legislature works. Legislators standing up for the beer distributors used a series of maneuvers to sink the bill before it even got a hearing. “Call me naive but I believed we would be given a fair chance,” said one brewer. Sorry, but that’s naive.

That old saying about bringing a knife to gun fight comes to mind. The distributors are veterans of numerous fights. They have long and deep relationships with legislators. They also spread around a ton of campaign cash to protect their economic interests. They aren’t going to give up their place in the economic food chain lightly.

The craft brewers and other emerging industries should take this experience as a lesson. Politics are driven by money, votes and relationships more than ideological principles. The Republican legislators are only the party of free-markets and less regulation when it suits their interests. Nothing’s ever been fair in the legislature. And that free-market is often rigged to prevent competition as much as to promote it. Just ask Chink Smithson about that one.

Category: NC SPIN Perspectives - Opinions from NC Leaders & Organizations

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