Imagine for a moment that you start a small business. You invest your life savings, take enormous risks, and work long and hard to make your venture a success. Years later, your hard work has paid off, and your business is growing. You want to invest more money and hire additional employees to expand your production and sales.Then state government comes to you and says: Hold it right there. Since you have made your business a success, North Carolina law requires you to give up control of your homegrown product and to transfer your brand rights to a needless third party outside distributors. These state-mandated middlemen have taken no risk or stake in your entrepreneurial enterprise, they just want to reap the benefits of your hard work and dedication.As a result, you have to fire your sales and distribution staff, and your revenue and profit plunge by 25 percent overnight. Does that sound fair to you? It certainly does not to us. Welcome to the coercive law of craft brewing in North Carolina, which claims to be “First in Freedom.”Under North Carolina’s archaic law, which dates to the 1930s, local craft brewers must relinquish all distribution and brand rights to their goods once they produce more than 25,000 barrels a year, a mere drop in North Carolina’s 5-million-barrel beer market.Once a brewery exceeds that limit, the state forbids it to distribute and sell its own beer. Instead, the state gives control of the brewery’s products to the outside distributors, who take a hefty cut of the brewer’s revenue and profits. No other industry is subject to such unjust confiscation.The companies that benefit most from North Carolina’s rigged system are foreign-owned brewing behemoths such as Anheuser-Busch Inbev, SABMiller, and Molson Coors. They exploit our antiquated beer law and use their outsized financial muscle to dominate the distributors’ product portfolios.The result: More than 96 percent of all the beer consumed in North Carolina is produced outside our state. Only 4 percent of the beer North Carolinians enjoy is made here just one in every 25 cans and bottles.Distributors and their allies, represented in the N.C. General Assembly by a powerful trade association, fund lavishly the campaigns of legislators who support a law that benefits giant foreign corporations at the expense of our homegrown North Carolina entrepreneurs.Consider the impact: Even though North Carolina is the ninth largest state in America, none of our 180 local breweries is ranked among the nation’s top 50. Smaller Colorado, by contrast, has five of the top 50, and Oregon has four. North Carolina’s self-distribution cap stunts our indigenous industry’s growth, limiting its investment, hiring, and state and local tax contributions.Local breweries are fighting back with a movement called Craft Freedom (craftfreedom.org), which is working to abolish the self-distribution cap and its harm to local entrepreneurs and economic growth.A new survey conducted for Craft Freedom found strong support across the state for abolishing the brewery self-distribution cap, regardless of age, political affiliation, or church attendance.The poll found that two-thirds of all voters including 66 percent of weekly churchgoers favor legislative candidates who encourage the growth in North Carolina’s microbrewery industry. And more than three-fourths of voters favor letting local breweries distribute their own products, while only one in five agrees with the state’s outmoded middleman mandate.North Carolina voters see the distribution law’s reform as a matter of fundamental fairness for homegrown entrepreneurs, who they believe should have the right to grow, hire, and invest their money in a free market, just like any other producer.As the poll shows, change is brewing. It’s time for North Carolina’s legislators to get state government out of the way, liberate our homegrown craft brewery industry, boost our economy, and stop favoring giant foreign corporations over local entrepreneurs.It’s time to lift the cap.Kristie Nystedt is president of Raleigh Brewing Company, John Marrino is founder of Olde Mecklenburg Brewery, and Suzie Ford is president of NoDa Brewing Company.
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