Beer drinkers, wine aficionados, imbibers of liquors both brown and clear, and my fellow Charlestonians, I come before you to deliver the State of the Brewnion Address. Our nation has a rich history of drink. In 1873, the United States boasted more than 4,100 small, local breweries. Then, as the century pulled to a close, the industry began to consolidate. With the growing use of refrigerated railcars, larger breweries began to expand beyond the scope of just their hometowns. Then a darkness, or should I say dryness, settled upon the nation.
For more than 13 years, Prohibition sat upon the American people like some hobgoblin of sobriety. Fortunately, in 1933, Christmas came early for the country with the 21st Amendment being ratified on Dec. 5 of that year. There would be lean times again. Approximately 100 years after reaching their peak, the number of American breweries would bottom out by the late 1970s. But as is the story of this nation, we would persevere.
By 1996, the number of breweries in the United States would finally return to levels not seen since before Prohibition. Now, we stand at a new frontier in America’s history. Never before have the country’s breweries, distilleries, and vineyards been so plentiful and diverse. But as we look ahead, special attention must be paid to the laws and regulations that govern our alcohol. We ourselves must continue to be the authors of our success, lest our teeming rivers of brew dry up once more.
After expanding into Charleston this past year, Brewpublik was ready to bring its curated craft beer delivery services to the thirsty masses. Already operating in California and North Carolina, the company had honed its skills, but as with any innovative business model, there was a bit of a hiccup in terms of what state agencies would allow under South Carolina’s three-tier system. So let’s back up a bit to better understand what that means.
The passing of the 21st Amendment, which put an end to Prohibition, placed the regulation of alcohol into the hands of the states. Much like the three branches of government that hold sway over this country, South Carolina utilizes a three-tier system to manage the production, distribution, and sale of alcohol. In the first tier, we have the producers — these are the proud men and women who craft your favorite beverages day in and day out. Then we have wholesalers, who purchase and pick up goods from producers and in turn sell and transport them to retailers. The argument for this system is that it allows for proper oversight from state agencies, who ensure that everything is on the same level and all the necessary taxes get paid. Now, many people may argue that the three-tier system has too many unnecessary middlemen, but as Brook Bristow, founder of Bristow Beverage Law, points out on his ever-informative website beerofsc.com, each tier serves an important purpose.
“A lot of people seem to think that these laws are favorable to wholesalers or somebody else. Well, actually that isn’t the case. These provisions are done as a preventative measure from producers influencing retailers … South Carolina seeks to prevent that kind of situation by having independent retailers,” writes Bristow. “And that’s a good thing. You wouldn’t want one of the big global brands to provide a ton of free stuff to a particular retail account which could be exchanged for locking out all other brands.”
Going back to Brewpublik — they specialize in offering a wide selection of beers that can be delivered to a customer’s home or office. The company has been met with great success in California and North Carolina, but South Carolina law does not specifically address whether a retailer can provide delivery services to its customers, according to Bristow. So while Brewpublik can use its custom Beergorithm to help offices and businesses find the brews best suited to a wide range of tastes, they can’t currently offer the same delivery services that they do in other states.
“We’re supporting local breweries because we’re finding that employees like a certain beer, and we’re able to provide them with beer from the local breweries and introduce them to these new beers that they wouldn’t otherwise have access to or even know about,” says Samantha August, co-founder and chief operating officer of Brewpublik. “We’re just trying to work with everyone. We want to work with the Department of Revenue. We want to work with SLED (South Carolina Law Enforcement Division). We want to work with our clients. We just want to provide really good beer to really good people. That’s about it.”
In addition to the current system’s regulations regarding deliveries, South Carolina producers are also finding they can no longer donate alcohol directly to special events and nonprofit functions. Although the laws governing this have been on the books for a couple of decades, state agencies have recently ramped up their enforcement.
“The newfound enforcements are not a product of new laws or regulations, but instead of old ones. The donation law has actually been on the books for quite some time; however, SLED wasn’t well funded or staffed enough and the alcohol industry wasn’t developed enough where policing that law made sense. That is no longer the case,” says Bristow.
So as South Carolina’s alcohol industry continues to expand and grow more diverse, and companies like Brewpublik introduce new business models to the state, lawmakers will need to keep updating and reshaping the regulatory system that governs them. And it is in this way that we can ensure a more perfect brewnion.
“At the rate that the alcohol industry innovates and evolves, there is no question that the industry as a whole across all tiers operates under laws that are in need of modernization in various places,” says Bristow. “I’d expect legislators to continue to push bills that speak to economic impact and job creation, which provide more opportunity for producers, wholesalers, and retailers, and more choice for consumers.”