House Bill 500 is headed for a floor vote today without a provision that would have raised the cap on how much beer breweries can self-distribute.
Currently, North Carolina breweries that produce fewer than twenty-five thousand barrels of beer per year can get a wholesaler permit and sell their own brew. Above that cap, however, they must sign on with a distributor. HB 500 initially sought to raise that cap to two hundred thousand barrels, but the provision (along with a section making it easier for breweries to break distribution agreements) was removed from the nine-page bill just before the House Alcohol Beverage Control committee was set to vote on it last Wednesday.
Last week, primary bill sponsor Representative Chuck McGrady, R-Henderson, told the INDY he didn’t have the votes to move HB 500 as originally written. McGrady said the N.C. Beer and Wine Wholesalers Association, which opposes raising the barrel cap, “made it clear” it would not negotiate the number. Tim Kent, the association’s executive director, told The Charlotte Observer that his group was “never approached prior to the 200,000-barrel bill being filed.”
Proponents of the barrel cap measure were quick to attribute its demise to “backroom political deal making,” as Craft Freedom, a campaign pushing for the measure, put it.
After all, the Wholesalers Association has several influential lobbyists on its roster, including former Senator Tom Apodaca, who had chaired the Senate Rules Committee before retiring from the General Assembly last year. The association, along with individual distributors, gave $53,000 to sixteen of the twenty-six House ABC committee members last year, according to an INDY review of campaign finance records.
Of that amount, committee cochair Jamie Boles, R-Moore, received the most, $14,250—$3,500 of which came from the Wholesalers Association.
Representative John Bell, the House majority leader, received the second highest amount on the ABC committee, $11,500. Bell represents Craven, Greene, Lenoir, and Wayne counties. Distributor R.A. Jeffreys is headquartered in Wayne County.
Other donations were as follows:
Representative Gregory Murphy, R-Pitt: $5,900
Representative Jason Saine, R-Lincoln: $3,000
Representative Rosa Gill, D-Wake: $2,650
Representative Kelly Hastings, R-Cleveland and Gaston: $2,600
Representative Scott Stone, R-Mecklenburg: $2,000
Representative Lee Zachary, R-Alexander, Wilkes, Yadkin: $2,000
Representative Yvonne Holley, D-Wake: $1,650
Representative Bill Brawley, R-Mecklenburg (a primary sponsor of HB 500): $1,500
Representative Chris Malone, R-Wake: $1,500
Representative Bobbie Richardson, D-Franklin and Nash: $1,250
Representative Josh Dobson, R-Avery, McDowell, Mitchell: $1,000
Representative Brenden Jones, R-Bladen, Columbus, Robeson: $1,000
Representative Larry Yarborough, R-Granville, Person: $1,000
Representative Marvin Lucas, D-Cumberland: $200.
Representatives Shelly Willingham, Larry Potts, Pat Hurley, Pricey Harrison (also a primary HB 500 sponsor), Beverly Earle, Kelly Alexander, Jon Hardister (a primary sponsor and House majority whip), Susan Fisher, and McGrady received no contributions from wholesalers or the wholesalers association in 2016, according to the INDY’s review of campaign records. First and second-quarter reports were not available for Representative Edward Hanes, who did not receive wholesaler money in the second half of 2016.
Of the committee members who received money from wholesalers, three also took money from breweries and/or the Craft Brewers Guild. Brawley (a primary HB 500 sponsor) received $3,000 from individual breweries on three occasions. His sole wholesaler contribution came from the N.C. Beer and Wine Wholesalers Association on September 6, 2016. Saine and Stone also took money from the craft beer industry, $2,000 and $1,000, respectively.
Taken individually, these contributions may not seem significant, but the wholesaler industry’s reach is not limited to the ABC committee.
According to Democracy NC, which analyzed campaign contributions from the industry for The Charlotte Observer earlier this month, the wholesalers association gave $523,000 to political party committees and candidates for statewide and legislative office from 2013–16. Adding in contributions from wholesalers themselves brings the total for the four-year period to $1.5 million.
From 2013–16, Democracy NC says, Senate leader Phil Berger received the most from wholesalers and the association, $192,200. House Speaker Tim Moore came in second with $98,466. Democracy NC says one-fifth of the individual contributions Boles (the ABC cochair) received during the 2016 election cycle came from distributors. According to Democracy NC, McGrady received $1,750 from the wholesalers PAC during the four-year period it analyzed.
The craft beer industry, meanwhile, gave $15,418 to seven committee members in 2016: McGrady, Fisher, Hardister, Brawley, Harrison, Saine, and Stone.
The trimmed-down HB 500 passed the ABC committee and the House finance committee Tuesday and is scheduled for a floor vote today. The House convenes at two p.m. You can read the latest version of the bill here.
Representative John Ray Bradford, the deputy majority whip, is hoping for a compromise on the barrel cap. During a press conference Monday, he asked the Beer & Wine Wholesalers Association and breweries to come together and negotiate rather than hashing out the issue in court.
“Surely we can all agree that trying to find a mutual compromise is much better than the alternative of a possible lengthy and costly legal battle,” he said.
Olde Mecklenburg Brewery, one of the three North Carolina breweries pushing the current cap, had planned a $10 million expansion in Cornelius, part of Bradford’s district, but owner John Marrino says the cap is preventing that growth.