Senate Regulated Industries and Utilities Committee

Senate Regulated Industries and Utilities Committee, February 10, 2026

Name: Senate Regulated Industries and Utilities Committee, February 10, 2026
Start: 2026-02-10T16:00:00-05:00
Location: 450 CAP

2025-2026 Regular Session · 450 CAP · 1 h 38 min

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Summary

Written by an AI model (gpt-6.1-sol) from the transcript. It is not part of the record, and the video is what was said.

The committee held a hearing on SB 456, which would remove the daily limit on beer customers may buy to take home from breweries and allow limited local sales directly to retailers. Brewery representatives said the changes would help small businesses build demand and attract distributors. Retailer and wholesaler representatives opposed the bill, raising concerns about competition and Georgia’s system separating producers, distributors and retailers. Public health and religious witnesses opposed increased alcohol availability. Members discussed tax tracking, eligibility and possible compromises. No amendments were adopted and no vote was taken. The chair invited proposed amendments and said the bill would not return that week.

Bills discussed (1)

Each account covers the stretch of the meeting it names. The bill's number is said in that stretch, unless it was the only bill on a committee's agenda.

SB 456. Alcoholic Beverages; regulation of the manufacture, distribution, and sale; provide

From 0:24:40 · turns 0 to 463

The sponsor said SB 456 would remove breweries’ daily take-home sales limit of 288 ounces and allow direct distribution of up to 1,000 barrels yearly within their county. The sponsor argued this would help small businesses supply nearby restaurants. A Reformation Brewery witness said wholesalers sometimes reject low-volume products; an Atlantucky Brewing witness said local sales could establish demand before attracting a distributor.

Members questioned tax tracking, multi-location breweries and whether brewers could keep profitable local accounts while relying on distributors elsewhere. A brewery owner said monthly excise-tax reports account for every keg. The sponsor offered to consider limiting eligibility to a brewery’s principal business location. The chair explored allowing self-distribution only for producers unable to find distributors; a Brewers Association witness welcomed that possible compromise.

A Georgia Beer Wholesalers Association witness argued the bill’s eligibility definition could include very large brewers and that losing local accounts would undermine distributors’ investments. A Georgia Alcohol Dealers Association witness said direct brewery sales compete with retailers and defended equal wholesale pricing. Georgia Alcohol Prevention Alliance and Georgia Baptist Mission Board witnesses argued greater availability would increase alcohol-related harm. Supporters argued limited self-distribution could coexist with the existing system. No substitute or amendment was adopted, and no vote occurred. The chair requested proposed amendments for possible later consideration.

Transcript

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0:24:33
Senate Regulated Utilities Committee to order. We only have one bill to consider today. It's Senate Bill 456 by, sponsored by Senator Bearden, who's here. There are a number of people that have signed up to be heard on it. It is a hearing only, and I have been hearing from quite a few people on this bill already offline, so I'm interested to hear what we have to say today. In your folders, uh, is the bill. It is unadulterated.
0:25:04
No committee sub or changes or amendments yet, and we're just gonna hear today what it is and the pros and cons of this bill. Um, for my committee members, thank y'all for your attendance today. We do not, uh, have anybody pushing us after this, but I do not expect this is gonna be some kinda two-hour hearing or anything. Let's just sorta see what kinda, um, how long it takes and what kind of questions we have.
0:25:33
Have the sign-up sheet there.
0:25:34
I have the sign-up sheet. I may jump around a little bit just to make sure we get the perspective. Uh, Senator Bearden, the floor is yours. You have your option of the, the witness chair in front of you or the podium, whatever you're more comfortable in.
0:25:47
Chairman, at this bench here, I'll be- be okay if I bring up Joseph Cortez from the, the-
0:25:50
That'd be just fine
0:25:51
... just in case I need some help.
0:25:53
Yeah, we'll-
0:25:53
I think we all know we need, I do
0:25:54
... we'll, we'll let you explain it first, and we'll question you, and then we'll let him be the first, uh, speaker or be your kind of a call a friend type, uh, lifeline.
0:26:03
Perfect.
0:26:03
All right. Let us know what we have here.
0:26:05
Okay. Mr. Chairman, first of all, thank you, and to the committee members. Uh, honestly, with this bill, we're not really plowing up any new ground. This subject matter has been around for probably since I got elected over 20 years ago, since you got elected to the Senate, and honestly, probably ever since Representative Allen Powell was a Democrat, so this has been around for quite some time. Uh, this bill does two things and two things only. And if you go to page three, that's where we'll start at with the bill.
0:26:37
At line 40, you'll see that we struck the language, "Shall not exceed a maximum of 288 ounces of malt beverage per individual per day."
0:26:49
Georgia's currently is capped at 288 by the, uh, lines we're striking. That's 24 cans of beer or a case of beer.
0:26:56
All right.
0:26:57
So why are we doing this? Let's look at other states that are around us. North Caroli- North Carolina, Florida, and Tennessee places no caps on those sales. Even Alabama allows 864 ounces per day, which is three cases of beer. South Carolina allows for 576 ounces, better known as two cases of beer. As we know, uh, this puts our small business at a disadvantage.
0:27:28
Any one of us in this room could drive up to the Publix, Kroger, any liquor store, and load up as many cases as beer that we wanted to. But if you're a small brewer, you're allowed one case, and I think that's very unfair to our small business and especially our friends that started these small businesses.
0:27:45
Do you know whether North Carolina has a three-tier s- distribution system?
0:27:51
I'm gonna call a friend right now.
0:27:53
Man, first question, you're stumped.
0:27:56
No, that's all right. Hey, it's, it's a hearing only.
0:27:58
You've been studying this for 20 years.
0:27:59
Yeah, there you have one.
0:28:00
All right.
0:28:00
Allen Powell was a Democrat.
0:28:01
Go ahead, Joseph.
0:28:02
Hey, I was on Georgia. And y'all don't believe me.
0:28:03
Mr. Chairman, and I'm sure others would wanna chime in on this, but if by three-tier system you mean you have the manufacturer-
0:28:10
Wholesaler and retailer
0:28:10
... wholesaler and retailer, absolutely. And most states that allow for self-distribution have maintained, uh, you know, three-tier as, uh, an option beyond certain production levels in most cases, um, especially when brewers grow and get viable and need that support of the distribution experts and the wholesalers.
0:28:31
Right. Because in the... historically, here in Georgia in the craft beer industry, these taprooms, tasting rooms, breweries allowed to have tours and sell directly were an exception to that retail end of things, and it was mainly to introduce the public to their product, let them see how it was made, and taste it, sample it, take enough home to share with their friends, but then go buy it at a retail place rather than, uh, sort of cannibalize those.
0:29:04
And I just wondered if there was a reason those other states sold so much, because I don't see why you would need more than a case to find out if you liked, you know, a particular, you know, Dog's Breath Beer, whatever you wanna call it there. Um, just wondering. All right. Sorry for the distraction, but I just, that was gonna keep my mind occupied until you got onto the next subject.
0:29:27
Well, that's what I love about hearing only is that way you can catch me off guard where I, on this one, I'll be ready for the full committee. Um-
0:29:34
This is the full committee.
0:29:35
Well-
0:29:35
We're just not-
0:29:36
We'll, we'll go for a vote
0:29:37
... we're not, uh, we ain't voting today.
0:29:38
Yeah.
0:29:38
All right.
0:29:38
There we go. Uh, section three, line 52, um, we added new language that would allow a brewery to sell no more than 1,000 barrels of beer locally. And locally in this bill is the, uh, boundaries of the county in which the brewery is located. Um, this is another one. When we look across the nation, there are only 13 states that do not allow some type of self-distri- distribution. And if we look a little bit closer to home, North Carolina, Tennessee are two of those states that allow self-distribution.
0:30:14
In the bill, those are really the two main areas that we're looking at.
0:30:17
Okay.
0:30:18
So at the end of the day, we're not trying to recreate the wheel or do something that hasn't already been done in the vast majority of states across this nation. What we're trying to do is simply help small business in our state, the business that's truly helped the state by taking a chance and going into areas, a lot of rural areas- That's helped revitalize many of our local squares and downtowns across this state. So if this bill happens to pass, the sun will rise, there will still be beer, wine, and liquor still distributed across the state.
0:30:54
And here in a little while, we're probably going to hear how we're destroying the three-tier system, a system that's been around since Prohibition, and I just don't think that's simply the case. This bill does nothing more than help our neighbors and small businesses that took a chance to open their small business locally in our communities. And I'll end by saying that I tru- I trust the committee process. I always have. I hope that we can find some common ground to help our small brewers to thrive in our local economies.
0:31:24
That's my main goal of this bill.
0:31:26
Le- let me get your overall impression of the three-tier system. Are you a supporter if, if you, you know, had your way and you were the craft beer czar, would you s- wave your wand and just abolish the three-tier system? Let it, uh, you know, free market rule.
0:31:46
There's definitely a place for it in Georgia.
0:31:48
Okay.
0:31:49
And I think what we're trying to do on this bill does not hurt it. Uh, but yeah, there's, uh, there's gotta be a system if you wanna get your product to other places around the state, so I think the system works.
0:32:02
Okay.
0:32:03
I think it probably could use some adjustment or lightening in some of the areas.
0:32:08
Yeah. Relaxing we'll call it.
0:32:08
Relaxing-
0:32:09
Okay
0:32:09
... to, uh, help our sm- small business.
0:32:11
Line 55 seems like a whole lot more than that. If you're allowing the sale, delivery, and shipment of the malt beverage and other things to other licensed brewers and that, now you become a, uh, essentially-
0:32:24
Yep
0:32:25
... a wholesaler yourself. Um, not just retailing your own store. You're, you're now being able to be both. You're, you're being able to have retail sales of your own product at your own facility, so to speak, but also to be a distributor. Uh, and that's, uh, pretty, uh, major just as-
0:32:45
Mm.
0:32:45
That's why I'm asking.
0:32:46
Yeah.
0:32:46
That dismantles it for craft brewers only-
0:32:50
Mm
0:32:50
... but leaves everybody else in the world still stuck under the three-tier system. I just, I wonder if that's an unintended consequence-
0:32:56
Well-
0:32:56
... or there's a particular reason for that.
0:32:58
Well, again, it's one of those where we had it in the bill. You know, we trust the committee process. That's something that we feel like that we need to work on and-
0:33:07
Yeah
0:33:07
... maybe strike and help leave some other stuff in. We're more than willing to work with the committee on that process.
0:33:13
We have, um, there's rarely a year that we don't have some type of-
0:33:18
Exactly
0:33:19
... um, alcohol bills.
0:33:21
Mm-hmm.
0:33:21
But particularly the craft, uh, breweries. And I can remember in some past years where this particular provision is kinda like you get to have your cake and eat it too.
0:33:33
Mm-hmm.
0:33:34
You can still have a wholesaler sell your products to areas that you don't have all the trucks and facilities and employees to do, but you can do it to the ones you want to. So you can, you can self-distribute when it's convenient for you, and you can still use a wholesaler. What, i- i- is it fair to go both ways, or should you have to declare, "All right, I'm gonna self-distribute everything, but I'm not allowed to use the wholesale distributors," or, "I'm gonna use the wholesale distributors and follow these restrictions on just limited direct sales"?
0:34:09
I think this is where we're getting into the massaging piece of it. Uh, if you're... I'm gonna use this as a, as a, uh, as a example, and I'll take Carrollton where I live at. We got a couple of really good small breweries in downtown Carrollton. Surrounding a lot of those breweries, we have restaurants. If I go into the brewery and get a beer, and if I wanna go to one of our good restaurants in downtown Carrollton, I can't get that beer.
0:34:42
Now, I could if they want to go through the distributor and get a distributor to come by, pick up their product, take it back to the, uh, distributorship-
0:34:52
Right, right
0:34:52
... and then would later takes it back, when if they could sell a small portion of what they brew, they-
0:34:58
Walk next door and sell it
0:35:00
... you could literally put on a set of hand trucks, take it right up to the restaurant, the keg, and set up and be good to go, and the people could enjoy the craft beer at the restaurant with their favorite meal.
0:35:11
Previous iterations of, of your bill, or bits and pieces of it, had a geographic limitation on that, that you could self-distribute in your downtown area or in your county-
0:35:22
Mm-hmm
0:35:22
... in your city limits, whatever. Have you thought that through? Yours has no such limitation as I read it. Um, is that one of the massages you're willing to make?
0:35:31
It, it's, it's in the county. It, it better be in the county. Uh-
0:35:35
It is in the county in your-
0:35:36
Yes, it's the county. It's within the county jurisdictions.
0:35:40
Okay.
0:35:44
All right. Where, where is that again on that section? I'll go- Sorry, Mr. Chairman. I don't know what that was. Yes. What line were-
0:35:54
54?
0:35:55
Yeah, 54. There it is. Okay.
0:35:58
Yes. Sorry, I drew a circle on my paper. I drew right through it.
0:36:07
I'm gonna recognize, uh, Senator Summers for questions.
0:36:12
This, Joseph, this may be for Joseph, Senator Beard, I'm not sure. Uh, line 52, a couple questions that kinda relate to this. Uh, 1,000 barrels. How is that checked? How, how is that... Who monitors that, that says you don't sell 1,001 barrels? How's that? Who, who, who's-
0:36:27
Every, every bit of product has to be tracked, and I would defer, um, to... May, Mr. Chairman, may I defer to one of our brewery owners just to answer that direct question about how we track that?
0:36:37
Okay, that'd be fine.
0:36:38
Okay.
0:36:40
Thomas
0:36:41
Um, it's... Oh, I'm sorry, sir.
0:36:44
Yeah. Come on up.
0:36:45
I'm Thomas Monte. I'm from Marietta, Georgia. Um, the easiest way we, the, when we make product, we have two coolers in our facility. One that is untaxed yet, meaning it has been manufactured and it's sitting in there. It has not been sold, it's only been manufactured. The moment it goes out of that door, either up to the front of my, i- into my taproom or onto a, my distributor's truck, is the moment we pay excise tax.
0:37:22
We have to, each month, account for every one of those kegs, and we send that into the DOR every single month. So accounting for a small of amount for some breweries, like 1,000 barrels, is very easy. So all we would do is pay our excise tax based on the size of the keg or the amount of cans we would be selling.
0:37:56
That would be how we would, um, account for that 1,000 barrels.
0:38:02
So no 1,000 barrel-- Mr. Chairman?
0:38:03
Go ahead.
0:38:04
No 1,000 barrels would be able to go out the back door, not just the front door?
0:38:08
No, sir.
0:38:09
There's no way you could just, no way to skim that. There's no skimming there whatsoever?
0:38:15
I don't play with other people's money, and especially when they carry guns.
0:38:20
Okay.
0:38:20
Um, the DOR is the tax man. Let's just call 'em that.
0:38:28
And every-
0:38:28
Anybody, and anybody who's running a business knows the easiest way to close your doors-
0:38:35
Is mess it up
0:38:36
... is mess it up. We are, we're responsible business-owning people. We're not doing, we're not shady, we're not bootleggers. We're just people that are manufacturing alcohol, and we do pay our taxes. So that's the easiest way to do it.
0:38:57
Follow up?
0:38:58
Uh, yes. One more.
0:39:00
Oh. I can wait if you two.
0:39:02
All right. We'll wait.
0:39:03
Yeah.
0:39:03
Senator Ginn-
0:39:03
Yeah
0:39:04
... you're recognized for questions.
0:39:05
Thank you very much, Mr. Chairman. I was kinda curious, uh-
0:39:08
Sure
0:39:08
... Senator Bearden, when the, I get into the what-ifs of it. Uh, you know, I- I've got a, a city that's in four counties in my district, and they, uh, I look at different things. And, you know, a- actually, there's a winery that's, that you can walk across their parking lot, and you can go from one county to the next, to the next. They, uh... It's kind of interesting. We don't do the same on wine, but, uh, I am curious about the tax side of things. If you go throughout a county, you may be dealing with a lot of different jurisdictions on, uh, cities and counties.
0:39:41
And I just, w- would you kinda run through that for me, how we, we make sure the taxes are paid? 'Cause I know, you know, a lot of people have a problem with Bartow and Barrow Counties, and there's sometimes even the Department of Revenue will mix up checks from one to the other. But I'm thinking inside a county where you have, you know, uh, four, five, six, sometimes more cities, how, uh, how do we account for all that? Just...
0:40:04
I think our breweries are just like any other business. We figure out how to pay taxes in the county in which we reside in. Uh, I don't think that's a very difficult thing or a, or a task on that.
0:40:14
I guess the reason I ask is because counties would be, uh, not necessarily the jurisdiction. You know, the tax jurisdiction doesn't follow county, so I'm kinda wondering why you chose counties versus a radius or something else.
0:40:31
Because it's easy.
0:40:32
It's what?
0:40:33
It's easy to understand. You know what your boundaries are of your county. Uh, you know, I've heard a lot of conversations about how we're gonna do taxes. We're in 2026. Uh, with the internet, I don't think tax is as the issue that we're dealing with now. I think the issue that we're here, and I think that gets thrown up a lot, Senator, is because they don't want this. The people that's against it, that's a easy argument to throw out there.
0:40:58
Okay.
0:40:58
But I think we pretty much figured out the technique on the tax p- portion of it.
0:41:02
So if I'm craft brewer A, and I've got a, a brewery in, in one county, but I also have a, a, a s- another facility in the next county over and the next county over, each of those facilities, do they get to distribute in each of those counties?
0:41:17
If we need to put in there the principal place of business, which would be their main business, I'd be more happy to do that as well if that's a concern.
0:41:23
I mean, I'm just, I'm trying to make sure, you know, I get the picture.
0:41:25
Well, just make sure there's no, uh-
0:41:26
'Cause I know if I were-
0:41:26
Yeah
0:41:27
... if I were in the craft brewer business and I wanted to do this, I'd, I'd have a lot of sub, you know, spots around the state if I really wanted to market to certain areas. But I don't-
0:41:36
And if that's a concern, I'd be more than happy to tighten that up to say the principal place of business, which would be your main headquarter s-
0:41:42
So there'd be one county for each brewery?
0:41:44
No, one county for your main principal of business.
0:41:47
Yeah.
0:41:47
It's kinda like when we look at attorneys. You may have... I won't throw any names of attorneys out there, but you may have big attorneys that has multiple locations. But their principal place of business may be Florida.
0:41:58
Okay. Thank you.
0:42:00
Thank you, Senator. Uh, Senator Lucas, you're recognized for a question.
0:42:04
Mr. Chairman, I, I remember years ago when, when we were doing this, and we were dealing with the three-tier system. What I'm asking, I, I, I mean, uh, I'm not a lawyer, but I, the language is kinda confusing. The question I have for you,
0:42:26
are you trying to be a retailer also in another county?
0:42:34
In another county?
0:42:35
In another county.
0:42:37
No. We're trying to make sure that they can sell their product in the county in which the business resides.
0:42:44
All right. So now y- you are not using A distributor based on when we approve these pub brewers in the very beginning that the fight we had.
0:42:58
Correct. As long as it's less than 1,000 barrels, they can be able to self-distribute.
0:43:01
No, I ain't talking about that. I ain't talking about the 1,000 barrels. I'm talking about you don't have to have a distributor to move your beer to another retailer.
0:43:18
If I'm getting your question correctly,
0:43:25
if you need, if you want to self-distribute, you could self-distribute in that county. So if it was to somewhere else, whether it be a restaurant or a store, you could. If you go outside that county or you go above the limit, then you would need a distributor to take that product. All this bill is trying to do is put a limitation to how much a brewery could self-distribute in the county to which their business is located.
0:43:53
When we first passed this law, it said that if you became a pub brewer-
0:44:00
Mm-hmm
0:44:01
... that you could sell your product on premises. Now you're coming saying, it ain't your own, on your own premise, it's at another premise by somebody else. And you had said, "You don't have to use a distributor. You can do it yourself."
0:44:22
Up to that 1,000 barrels, yes, sir.
0:44:27
All right. Senator Summers, you can go ahead and finish your train of thought if you had a follow-up question.
0:44:32
I know the breweries, uh, the distributors love you guys. I mean, there's no question about it. Uh-
0:44:38
Yeah, I love them definitely.
0:44:40
What, what can you say to this committee that explains how you don't harm their business by just doing what you wanna do? Just kinda in a nutshell.
0:44:53
Senator Mayer, uh-
0:44:54
Ain't no matter. Go for it.
0:44:56
You wanna go for it or you want me to answer it?
0:44:58
How, how are you not hurting them or taking away from them?
0:45:02
Uh, Senator Summers, I think we can just point to 38, 39, including the District of, District of Columbia, really great examples of how that plays out in actual reality, how not only are they harmed, but we show growth in many of these states. We talk about craft beer states that, uh, are thriving. Not only are they thriving there, but they're distributing into Georgia, often through a wholesaler if they're going across state lines, right? But they're so successful in these self-distribution states that they're able to build their brand.
0:45:36
And it's not that I'd love to hear one wholesaler, I've asked the question before, that's closed up shop because of these laws, when we continue to have brewery after brewery across the state close their business because of the restrictions of an outdated, antiquated pieces of the system.
0:45:57
All right. Uh, S- Spencer Nicks, since you are here with us, I'm gonna put you at the podium.
0:46:03
Yes, sir.
0:46:04
Uh-huh. You are with Reformation Brewery. If you would just, uh, introduce yourself and give us your views on the bill. You're listed as being for it, but you can change your mind.
0:46:17
All right. I appreciate it, Chairman Cowsert, Vice Chairman Summers, and members of the Senate Regulated Industry and Utilities Committee. Thank you for the opportunity to speak today. My name is Spencer Nicks. I am co-founder and CEO of Reformation Brewery in Woodstock in Canton, in Cherokee County. We employ 125 Georgians. We buy from many local vendors, and we try our best to be the kind of place where neighbors become friends. And I'm here to ask plainly that you, uh, vote Senate Bill 456 out of committee, because the time to help small businesses is right now.
0:46:53
Small, independent breweries like ours, we're not just places that make products. We're community builders, and we're economic engines, and that's why 456 matters. 456 makes practical, targeted updates that help small brewers survive and grow without tearing down the system. It simply updates a few things. It lifts these arbitrary Georgia off-premise to-go limits while keeping an annual cap on those direct sales at 6,000 barrels across a brewer's locations.
0:47:29
It also creates a limited exception for small brewers to sell up to 1,000 barrels per year at wholesale to retailers in the same county, thus helping local businesses serve other local businesses and customers while keeping the oversight of the state intact. Now, I wanna be clear about something, because it's easy, and it already has gone there, for this conversation to turn into sides, and really, it's only adversarial when we're down here. This isn't a zero-sum game.
0:48:00
This isn't supplier versus distributor. This isn't us versus them. I think it's a win-win for suppliers and wholesalers, and I empathize with my wholesale partners. I have them, some of the biggest ones. They're feeling the squeeze of this market. In fact, they've requested my pro- my business to cut products, and I get it. They have lots of products to manage. New products are constantly requiring more time and more resources. I completely understand that.
0:48:33
Managing small volumes doesn't make sense in their portfolios or in their business model. They have requested that. Unless we can distribute 40 barrels of product, they don't wanna distribute the product, and that's their business, and I respect it. However, it leaves my business nowhere to turn. And I assure you, 40 barrels of product, while it might not matter to some, it matters to Reformation. And SB 456 would free wholesalers from the distraction while freeing small independent breweries to build up demand and products that work for all.
0:49:11
And at the end of the day, this is about preserving independent small businesses in Georgia, businesses that are rooted in towns, many of your towns. They hire locally. They reinvest locally. They create places that people actually wanna gather. Distributors play a critical role in the marketplace. We respect that. But SB 456 is narrowly tailored for small brewers and local same county relationships. It gives small businesses just enough room to breathe, just enough flexibility to build demand, to build brands, to prove their model, and keep jobs in their communities.
0:49:53
And right now, a lot of us are fighting for air. Costs are up. Margins are tight. Consumers are more careful with spending. And if Georgia wants to keep homegrown entrepreneurship alive, especially in smaller towns and growing communities, this is the moment to act. So here's my ask again. With respect and urgency, please vote 456 out of committee. Give it a fair chance on the Senate floor. Let Georgia's small businesses keep building community, creating jobs, contributing to the local economies that you represent.
0:50:28
So thank you for your time. I'm happy to answer any questions.
0:50:32
Senator Lucas has a question. You're recognized, Senator. You'll be next.
0:50:38
When y'all first came to us-
0:50:39
Senator
0:50:39
... and we did this,
0:50:43
I knew it was just to get the foot in the door.
0:50:45
Mm-hmm.
0:50:48
Now you, what you're doing is getting rid of the three-tier system. It's what you're doing. You're getting rid of the three-tier system because when we did it, you had to use a distributor. Now what you're saying is, "I want self-delivery," just like Budweiser. That's what you're saying you're doing. Now, I mean, I, I mean, it's just plain only in the county. Next, it will be in the other county without having a brewery.
0:51:23
And so what, w-
0:51:27
w- I'm just talking about being honest players.
0:51:33
We went through HE double L with this thing in the very beginning, and now here we are back doing
0:51:47
the brewers by allowing you to deliver in the county, and that ain't what we agreed to in the very beginning when we allowed this to happen. And so what I said to you, be honest upfront when you started and don't come back and decide, "Well, we wanna do this," and now so we gonna break the three-tier system because under this bill you break the three-tier system.
0:52:21
Senator, uh, we got your no vote recorded, but did you have a question there?
0:52:29
And I'm still worried about the other day- ... you were in the well. You were telling us about that story when they got you and accused you of throwing that brick at the car. I never got the answer to that. Do you-
0:52:40
I didn't do it.
0:52:41
I... Did, and did they let you go?
0:52:44
I didn't do it. I didn't do it. I, I got caught.
0:52:47
Falsely accused. Yeah.
0:52:48
Falsely accused.
0:52:49
Yeah.
0:52:51
I was in the street under the streetlight playing four square. Four square.
0:52:56
Yep, I remember that.
0:52:56
That's how we used to get together. We didn't have a place to go. There wasn't a park where I lived at.
0:53:03
Well, I'm glad you got off of that one. Uh-
0:53:05
Well, I'm glad I had-
0:53:06
... Senator Brass, I, I-
0:53:07
The person that had the, had the, who got me out and said, "I know that young boy."
0:53:12
There you go. Reputation. Senator Brass, you're recognized.
0:53:15
Well, since we're going down memory lane, I used to play four square, too. And the bill he's talking about was actually the very first vote I ever took in the Georgia State Senate, and that was in 2017. Um, now I've got two questions.
0:53:31
Go right ahead.
0:53:31
Mr. Chairman, if you'll allow, I'll just ask them together, and then you can, uh, uh, I just need two numbers. How many total barrels per year does Reformation produce? And then how many of those barrels, um, are you locally distributing now?
0:53:49
Yeah. We, uh, we do, um, we do about 4,000 barrels of malt beverage a year.
0:53:54
Okay.
0:53:55
Uh, and about 2,500 of those go through distributor.
0:53:59
Okay. And, and of that 2,500, that's going out to local restaurants, local-
0:54:05
Yes, sir. Yeah
0:54:06
... um-
0:54:06
We're, we're across the state
0:54:07
... grocery stores and whatnot?
0:54:08
But yeah, it's pretty much condensed as consumers have changed mindsets and so forth, but it, it's pretty local, yeah.
0:54:14
What's your... A third question, Mr. Chairman.
0:54:16
Go ahead.
0:54:16
What's your number one seller? What's the name of it?
0:54:19
Uh, A Cold One.
0:54:20
A Cold ... Good name. Okay. That's all I got.
0:54:24
You mentioned that you do use either a or multiple distributors?
0:54:29
Yes, sir, for, uh, ter- the territories are broken up by distributors, so we have, uh, distributors for each territory in the state.
0:54:36
Okay. And, um, those are, are contractually agreed to distribution agreements?
0:54:44
Yes, sir.
0:54:45
Okay.
0:54:45
As well as franchise law reform. Yeah, those, they're very difficult to, to get out of. Um, but also, you know, there's, there's not a lot of other distributors taking small breweries, as I'm sure we'll hear some others testify about.
0:54:58
Okay. All right. Other committee members have questions? Yes, sir. All right. Thank you. Senator, uh, Sims, you're recognized.
0:55:07
Thank you.
0:55:07
Thank you. Go ahead, chair.
0:55:08
My concern is not having any knowledge whatsoever of the bill and it being on the calendar today, and evidently, uh, those individuals that are being impacted either adversely or making profit did not bother to come and talk to those of us that are on the committee. Is there a reason why?
0:55:34
Uh, I was notified... When, when did you shoot me the text? Yesterday. We- Thursday afternoon or Thursday afternoon? We, uh, we always give 24 hours- Yeah ... notice of a hearing, but I did it a hearing only- Yes, sir ... so that everybody would have time to get fully educated. But, uh, okay. I think somebody needs to make a note that Senator- South ... Southwest Georgia needs some, uh, persuasion. Um, that's all the questions for you. Appreciate it. But don't go far, 'cause we, we may need you again.
0:56:06
Okay. I'm gonna go ahead and, and let you, uh, Joseph, speak. You don't have to move. You can go to the podium if you'd rather. It is a more flattering TV shot. Uh, if you-
0:56:17
Well, I'll take all that.
0:56:17
Try that.
0:56:18
I'll take it.
0:56:25
Mr. Chairman, my mama definitely said I had a, a face for radio, so I'll take the- ... best flattering shot I can get, sir. Um, Mr. Chairman, members of the committee, I wanna thank you for the opportunity to speak, uh, for this bill. And you have members of the committee that have been around for a few years, which is most of you. We have heard versions of this bill for several years now. And yes, our small businesses are coming back, coming back to ask for the ceiling to be raised just a little bit more, as it was before, because one thing about three-tier that we've learned in 38 other states and the District of Columbia and every state that borders us that has a higher daily limit, is that it should be in a 21st century marketplace with changing consumer demands, changing technology, a changing marketplace which is rapidly changing every single day, a flexible system that allows small businesses especially to survive.
0:57:16
And not just survive, we want them to thrive in these marketplaces and these local squares. And that's what this is about, added flexibility, like most other states have figured out how to do and maintain their three-tier systems and maintain that everybo- I heard something about pie earlier today, and everybody getting a piece of the pie. Plenty of pie to go around in states that have added these flexibilities. And it's not about public safety. It is not about taxes. There are still common sense public safety laws and regulations in every jurisdiction, statewide all the way down to county and city, that protect consumers, protect businesses, and are not going anywhere with this.
0:57:58
And our craft breweries are some of the best stewards of that public safety that you can find in the alcohol industry. And when it comes to taxes, we also need flexibility, and that happens in the 21st century when every single one of our craft breweries utilize 21st century technology to make sure that they are good corporate citizens, which they are, at the local, state, and national level too. We pay federal excise taxes. All of that is done through 21st century software. At the click of a button, they track every single ounce of beer.
0:58:31
This can be done, and it's been shared. Other states that have, that have moved towards self-distribution, they had a little bit of a ramp. The previous data was shown in North Carolina that all these breweries that had self-distribution weren't paying their taxes. I'd urge you to look for that data over the past year as they've had that on-ramp to make sure that their systems are aligning with the new system. Everybody who's ever had a new business system knows that there's a little bit of a, a learning curve to r- to get that in order.
0:59:02
All of our folks wanna pay their taxes. They wanna support their communities. I'll let our members speak to the heart, but we appreciate your consideration and your support of this, because our members really do need the flexibility now more than ever. Thank you, Mr. Chairman.
0:59:15
Let me, let me hit you with a couple here. Um, you know, my mind's kinda wandering up here, but I'm thinking we've got three or four counties in this state with a million or more residents. If I was your distributor for Reformation or whoever and they were based in Atlanta, I wouldn't be too keen on you taking, you know, a million customers you can self-distribute but riding my trucks to go wherever else you wanna go. And I just, I, I wonder if you think it would be fair for a distributor to be able to say, "I'll distribute your product, but only if you let me distribute all of it." 'Cause this law's keeping them from doing that, right?
1:00:00
If I understand your question correctly, I guess my response is this is about building to scale, which is what distributors are really good at pr- at, uh, distributing at scale, and on the big trucks and sometimes little trucks. And there, there's folks who can speak a lot more to that in the room, both on the supplier and the distributor side. But this is about actually building up your brand where you're more successful. If we wanna talk about three-tier, we want a thriving three-tier where our members can build up and be successful in that three-tier. But right now, they're boxed out of three-tier.
1:00:29
Would you be willing to have all or none, that you be required to self-distribute everywhere in Georgia or else use a distributor?
1:00:39
I can't answer, uh, for all my members on that question. I just think that that's an additional straitjacket, sir. And-
1:00:44
It seems like it's letting, if this were to pass, you cherry-pick where you wanna distribute. But still, our system requires by law the distributors to take you up to Hiawassee and down to Valdosta with the trips and the c- cost and expense, but you get those little sweet spots locally that you can hit, you know, without having to- To, uh, you know, pay for a distributor to distribute your product.
1:01:12
Mr. Chairman, this, this, uh, bill has 1,000 barrels.
1:01:15
Mm-hmm.
1:01:16
The distributors, um, distribute probably a lot more than that on their trucks from a lot bigger brands. Anheuser-Busch, a very successful multinational corporation, brews 8 million barrels of beer in Cartersville, Georgia alone.
1:01:30
Okay, so what-
1:01:30
This is scale.
1:01:31
8-
1:01:31
Ex- excuse me.
1:01:32
All right
1:01:32
... million barrels.
1:01:33
7 or 8 million barrels in Cartersville, Georgia alone.
1:01:36
A lot of beer.
1:01:38
All right.
1:01:38
And our n- our total combined craft production in Georgia is less than 600,000 barrels of b- of beer a year. And most of them are just not... They're not getting to H- Hiawassee and, you know, 1,000 barrels is not gonna get to a million people. They're just gonna be able to build their brands to the pizza place next door that has to get on a truck, go across Metro Atlanta or across the state with a 30% markup to get pa- to the pizza place just for them to build their brand locally and actually ever be successful in a true fashion on a distributor truck and build up to scale and get on the shelves at big retail stores.
1:02:16
Okay. Other committee members have questions? All right, thank you and, uh-
1:02:22
Thank you, Chairman
1:02:22
... hang close. Michael Mumper, Georgia Alcohol Prevention Alliance.
1:02:31
Thank you, Chairman, Vice Chairman, and members of the Senate committee. Thank you for allowing me to be here. I'm with... Michael Mumper with Georgia Alcohol Prevention Alliance. We're a non-profit organization. I'm here for public health and public safety reasons. No skin in the game. Um, just to back up for one second, the three-tier system, uh, which, which we think very strongly of, just for the record, of course separates manufacturers from distributors from retailers. So it's a, it's a deliberate process.
1:03:05
32, 33 states in the country use the three-tier system. The other ones use the alcohol beverage control system. So for example, we mentioned, um, Al- uh, Alabama and North Carolina, they use the ABC system where the state controls the distributors and the retailers, for example. So it's a, it's a different model, but it's still very well controlled. So, and that's the point because, um, the, the control, what that con- control does for the alcohol industry is it tracks alcohol products through the sales process.
1:03:42
Sometimes they're tainted or whatever. It, it happens. It collects taxes efficiently, it enforces age limits and other laws more efficiently, maintains an orderly, predictable marketplace. Now, those are really important things to do when we remember that alcohol is not toothpaste or Coca- or Coca-Cola. That it is addictive, it's impairing, and it causes chronic diseases.
1:04:13
And it really does so at levels I don't know if we're all aware of. So when I, when I started testifying to this committee five years ago, there were 96,000 alcohol-related deaths a year. 96,000, which is a big number. But in the last five years, that's grown to 178,000. So alcohol harms are not going down in the country right now. In Georgia alone, in those last five years, we've gone from 2,800 alcohol-related deaths to 5,400.
1:04:52
And then, and deaths is not the only harm that we're addressing. There are traffic accidents, there's violence that's alcohol-related, crime, accidents, and then the chronic diseases, like liver, heart disease, and cancer. So alcohol is something that's really important to slow down, and I think if we wanna use a rule of thumb when we address new alcohol proposals, it's is this, is this new proposal speeding up the process and making alcohol easier to get to the consumer faster?
1:05:23
So is that why you're against it, because it makes it more accessible to the consumer?
1:05:28
That's always the rule of thumb, is that when you increase accessibility to the consumer in any way, hours of sale, um, going directly from manufacturer to retailer-
1:05:38
Uh-huh
1:05:38
... yes.
1:05:39
Yeah.
1:05:39
'Cause that means more alcohol is gonna be drank-
1:05:41
Y-
1:05:41
... which is why our friends are for it.
1:05:44
And you think the three-tier system restricts accessibility to alcohol for consumers?
1:05:48
To an appropriate amount.
1:05:50
Okay.
1:05:50
Yes.
1:05:51
All right.
1:05:51
That's why the system was set up.
1:05:53
Thank you.
1:05:53
So the question then is, is this relaxing the system or breaking the system? I think that's a valid question. It might be a small break, but this is a break. When we bypass the distributor level for certain kinds of sales, you are breaking the system. It might be only incremental in, in impact now because of the 1,000 barrel limit, but the 1,000 can be struck and changed to 2,000 and so forth. So-
1:06:23
Okay
1:06:23
... in that sense, it's a break, not just a relaxing. So thanks for your ear, and I appreciate y'all.
1:06:30
Thank you. Stoney, I'm gonna call on you. I know you didn't sign up, but if there's a subject matter expert, it's you. Would you come up? Let me just ask you a couple questions.
1:06:41
Yes, sir.
1:06:42
Stoney represents retailers, and I didn't see anybody from that end of the spectrum signed up. And I, I would love... Just introduce yourself, who you represent-
1:06:51
Yes, sir
1:06:52
... and how this would impact the retail leg of the three-tier system.
1:06:57
Certainly. Stoney McGill with Georgia Alcohol Dealers Association. Um, represent about 400 retail packaged liquor stores around the state of Georgia. Uh, we stand with the wholesalers in opposing this legislation. Uh, one of the things that we, we don't like is the, the idea that, that they could pick and choose, um, if the, the way that the, the beautiful part, one of the many aspects of the three-tier system that we like is that the mom and pop stands equal with the, the big box retailers and everybody else when it comes to service from the wholesalers.
1:07:28
So a wholesaler can't deny if, if they're selling, um, X, Y, Z beer to a, uh, to Kroger, they have to offer us that same beer at that same price. And so that's one of the things about the, the franchise territory, uh, law in the three-tier system that works really well for us that, that gives l- small business an equal footing to, to larger businesses.
1:07:54
One reason I'm picking on you just a bit is because this allows these craft brewers to sell directly to retailers in the county and circumvent the distributor or wholesaler. It seems like you might get better deals in your retail stores if you bought directly from a, a brewer that didn't have a little markup in between.
1:08:17
Yes, sir.
1:08:17
That would sound to be maybe you could have some-
1:08:20
I, I appreciate that concept
1:08:21
... extra profit. Yeah
1:08:22
... uh, and I've seen nationally. I've, I serve on, uh, American Beverage Licensees, which is a national association of, of on and off-premise locations, and we haven't seen that nationally. Um, certainly there are, are a few circumstances where maybe I could get a, get, get a beer that I couldn't get, or one of our retailers could get a beer that they couldn't get otherwise, but we don't see that as being enough to put another hole in the three-tier system. We were involved in Senate Bill, uh, 85 and the negotiations there, and w- when the, the bre- the craft brewers came to, they said, "Oh, we wanna s- sell a six-pack, you know, we just want to get it out the door.
1:08:57
We want it just this one exemption to the law, and, and that's all we want. And then, and of course, we don't want to become your competitor." And that's, effectively now, they, they have become our competitors with-
1:09:08
Mm
1:09:08
... with a lot of, um, one-off beers that, that aren't making it on the wholesale trucks, never make it to our door. Uh, and we don't see it that if we see, like, if, if there's a, a sale lost to a, to a wholes- to a craft brewer location, then that's a sale we don't make.
1:09:24
Other committee members have questions? Thank you for being a good sport, and I didn't want to scare anybody else in the crowd. I'm not gonna routinely- ... call on people, but I, I didn't see anybody to give the retailer's perspective-
1:09:36
Yes, sir
1:09:36
... so I appreciate you, um, being here for us.
1:09:37
Yes, sir. Thank you, Mr. Chairman.
1:09:39
You bet.
1:09:39
Any, anytime.
1:09:40
Martin Smith.
1:09:46
Georgia Beer Wholesalers Association.
1:09:55
Thank you, Mr. Chairman. Um, as you said, I'm Martin Smith with the Georgia Beer Wholesalers Association. I represent the distributors throughout Georgia that distribute all the alcohol, uh, from their, their brewer partners to all the, all, as Stoney said, all the different retail locations in the state. Um, who we are and where this bill stands with us, Georgia Beer Wholesalers Association, as we signed up, opposes this proposal. Um, we support Georgia's current alcohol regulations. We work with brewers of all sizes, not just the s- the largest brewers, not just the smallest brewers, but all of them in, in, in all sizes, respecting the role that everybody plays in this regulatory process for our state, for our economy.
1:10:39
Our concern is not about favoring one segment of the, or the other with, divided up into three different segments, the retailers, the wholesalers, and the brewers. It's about the concern of the unintended consequences that's been alluded to many times through this conversation. What this bill, as it's currently written, does or proposes to do, it creates a new exemption to the three-tier system. As you said, there's been several over the years and, and agreements of how we've gotten there.
1:11:09
Um, the craft brewers in this one, um, who produce over, as you said earlier, a half a million barrels a year in Georgia. That's, that's, and which makes them the 11th largest state in the nation of production. So Georgia ranks 11th in the state of craft beer production, um, in, in the nation. What this bill does, it produces, um, a new, a new category of a small brewer, which is, uh, by defined in this, in this thing, in this, in this proposal as anyone who doesn't represent more than 15% of their wholesaler's annual sales.
1:11:54
Well, we reach out, I reach out to my members to find out what, what does that, how does that reflect? Well, that is every Georgia brewer, and in some cases, even the two largest brewers in the world that are located here in Georgia. So every brewer that one of my wholesalers carries would fall into this category of small brewer, and i- in some cases, even the two largest brewers. Um, that, that, that, that, I just want you to grasp what that means.
1:12:25
And what it allows for, if you meet that category, as this bill proposes, that they could distribute to their local retailers up to 1,000 barrels per year. 1,000 barrels is 330,000 12-ounce cans, or 13,777 cases of beer. That's 288 ounces. So they would be servicing those accounts, and as you said earlier, Mr. Chairman, as it's proposed, it's not to service every account.
1:12:57
It's to be able to cherry-pick and go across the street to what would main- mainly be the prime accounts, where those beers are popular right then. Where our guys come in and invest in these brands, and invest to, so that they can get a return on it. Well, they, we need those accounts, 'cause not all of them are the accounts that are familiar with these products. We've got to grow it there, but we need those accounts to help us carry that for a return. To take those away, it, again, as it's about scale, an investment is an investment, and you, you want your percentage of return there.
1:13:30
Can your distributors pick and choose who they wanna- Distribute their products for?
1:13:35
No, sir. As-
1:13:36
They have to, anybody that opens a brewery and comes to one of your people in the territory, you gotta-
1:13:41
I, I'm sorry. I, I misunderstood. I thought you were asking about which retailers we service.
1:13:45
No, no. Not the retailers.
1:13:46
No, sir.
1:13:46
The, the, the manufacturers-
1:13:48
They, they, they... Nothing is forced upon the, the, the, the wholesaler to make an agreement or the, or a brewer has to pick a specific wholesaler. That, what we do is we go and interview, figure out what's the best fit with it. I've heard of different brewers saying that they don't have one or they may not want one. And, and the case is as, as the senator from Carrollton alluded to, some of them are happy in, in the situation they have right now running their tap rooms and may not have decided to go with a wholesaler. But it's-
1:14:15
What, what I worry about is what if Reformation or somebody wants to have an arrangement with the distributor and they say, "Nah, you don't have very good product"? He made some comment about they had, you know, not enough of some particular brand. If y'all say no, are they just stuck? They can't self-distribute and they can't find a distributor? That's a, a-
1:14:38
It-
1:14:38
... rough world there
1:14:39
... it, it is a rough hypothetical world where you've got somebody that you can't find to do that. Um, but in the case of the one that was referenced on Reformation on the not knowing that exact situation, if, if you're gonna service an account with a brand, as he said, his, over half of his product, of 4,000 production, 2,500 going through distribution, over half of it's going through distribution, you just, there's a communication of what, what level needs to be in the marketplace for us to put it out there and re- replenish the shelves.
1:15:09
So that's, that's kind of an internal strategy of what, what volume do we need on that particular brand.
1:15:15
So when you, when they were talking about, you just mentioned finding the proper fit.
1:15:19
Yes, sir.
1:15:20
Do multiple distributors, like, bid or compete for the, the product line or the brewer's product?
1:15:27
It's, it's more of an interview of, of... So you have distributors of, of a size that may cover four, four counties, or you've got distributors who cover half the state or the whole state. And in even in all of those cases, the brewer in interviewing that relationship decides where they want this, what counties they want this distributed in by whoever, whomever they pick.
1:15:50
They get to pick.
1:15:51
They get to pick. So even if they pick the largest one that covers the whole state, they can say, "You know, we, we, we're new to this. We wanna start and figure out how to grow this." 'Cause the worst thing you can do is get something in the marketplace and you can't refill those shelves.
1:16:03
Yeah.
1:16:03
So you grow smart on that, and they can say, "Let's start in X, Y, and Z counties, or just X county," and grow that way. But it's an interview of what ha- what is your strength as a wholesaler to service particular types of accounts? Because some of these brewers may be just an on-premise focus. Some may be set up for an off-premise focus. So how, what, what is, what is your style of beer? Where, where are your strengths and makes that, make that match?
1:16:29
Okay. I didn't mean to get you off track, but I, I did. And, uh, Senator Summers asked to ask a question while we're on this point.
1:16:36
Curious question. What does the Restaurant Association, are they opposed to this? Restaurant, I'm just curious.
1:16:43
I, I, I... The association itself, you'd need to ask them. I've not asked the association.
1:16:47
You haven't dealt with them? Okay. If they had a issue with you.
1:16:49
But we've had, we've had in this committee, before this committee, particular restaurateurs speak to this, and I c- I'm happy to repeat what they said.
1:16:57
Yeah. I'm just, the association, I'm just curious how they're gonna deal with it. Sorry.
1:17:01
Yeah. Um-
1:17:03
Okay, continue. I'm sorry we got you off track. You, you wanna hit it while you-
1:17:06
Yes, sir. So, so this, this proposes to make those, those changes. And as Michael Mumford just alluded to, that these laws and structures are there to protect the consumer, ensure compliance, fair competition, oversight, and revenue through the excise taxes. Um, self-distribution, as we talked about with the small brewers to be able to do that, it would, w- the, the, the term small brewer as it's applied in this is, is kind of a misnomer on that because of who all it would apply to.
1:17:38
Um, they would be able to sell direct through that barrel limit, which I went through. That's a big number, so it's worth repeating. 1,000 barrels is 330,000 beers. That's 13,777 cases of beer that each brewer could do with 1,000 barrels of that. Um, it also allows for brewers, as you alluded to earlier, uh, Mr. Chairman, to be able to move product from brewery to brewery that's not their brewery. It doesn't say this in the bill, but I'm assuming that they were gonna make that move so that they could make that available in their tap room.
1:18:13
Uh, or, or otherwise just become a distributor for, for other people's products, um, which is, like as, as, as has been said, is a concern about the three-tier system. Um, and then the elimination of the off-premise, the, that we talked about earlier, the 288 ounces. Um, as, as you asked me yesterday of why to speak today, it's to remind people of what this does and how, kind of a little bit of a history. And Senator Lucas has alluded to this multiple times. When tap rooms were created through legislation, the purpose, the clear purpose of that was so that patrons would be able to come in and learn and, and get a feel of this product.
1:18:52
Learn who's makes it, get the history of it, get a love affair for it. Taste it there, drink some there. Create some revenue at that location. Get a case of beer to leave, but not to replace the traditional retailer, but have that the next case or the next bottle comes from your neighborhood retailer. Eliminating this case per person per day puts it to where their interest is that they want to be that local retailer. They want to be that place where the, this, the destination to come and purchase this product.
1:19:22
And as Stoney mentioned, to compete with, with his members. Um, so 456 is more than meets the eye, as it started off today of this just two, two little changes. Um, it creates real world complex issues, not just hypotheticals, but real world issues. Um, and Trying to d- to make these local small brewers become the last mile comes with more than just pushing a, a hand truck across the street. It comes with servicing accounts, making sure the taxes are collected and remitted correctly, s- uh, making sure the products are, are where they need to be, and that, that the retailers are getting the service that they deserve and are required to get.
1:20:05
Senator Brass, I think you had a question.
1:20:08
I, I think I'm good.
1:20:09
You got it?
1:20:10
Yeah, I'm buttoned up.
1:20:10
Other members have questions? All right. Thank you for being here.
1:20:15
Thanks, Chair.
1:20:15
Please stand by. We got just a couple more-
1:20:16
Okay
1:20:16
... so I may be able to get through them here.
1:20:18
Get some basketball game. There's my second one.
1:20:20
Uh, Kevin Irvin. It's either or we're not voting.
1:20:26
Give it a second. We're almost...
1:20:27
We actually go. Kevin Irvin: Chair McOsor, Vice Chair Summers, and members of the committee, thank you for your time today. My name is Kevin Irvin. I'm the, uh, president of the Craft- Georgia Craft Brewers Guild. I'm also the operations manager of Atlantucky Brewing. Um, just to kinda give some numbers, of the 181 breweries in Georgia, there are three Black-owned.
1:20:59
We represent one of them in Castleberry Hill. Castleberry Hill per capita has the most Black-owned businesses in the nation, and we proudly represent that. But in building our business in that area, a bill like this would help us with that. The way that we look at it is this gives us the opportunity to build proof of concept till we get to that point. I think a number was mentioned on, like, distributors look for 40 barrels. Um, we produce 15. We produced 150 barrels, so that's to give you a kind of a, a instance of some of our small businesses that some of these, uh, distributors wouldn't be interested in because we haven't built that proof of concept.
1:21:35
Proof of concept.
1:21:35
A bill like this gives us that ability to prove, to build proof of concept so that these distributors would have low risk, and they would, um, have a brand that's already built a name that they can, uh, partner with. We also look at this as a way to build a, a better relationship with distributors because we're helping to build that proof of concept, not putting that lift on them. Then once we reach that number, then they have a brand that they can work with. So we're hoping that we can build this as a stabilization of, like, maybe an on-ramp to this, not deregulizati- re- not deregulation as it's been looked at.
1:22:09
So-
1:22:09
How many barrels did you say? 150?
1:22:11
We do 150. We did 150 last year, maybe, like, 170 last year.
1:22:15
Do you sell anywhere other than your own brewery or tap room?
1:22:18
We do not. We're only able to sell in our brewery.
1:22:20
So you don't have a distribution agreement?
1:22:22
We do not. I don't think a distributor would, um, be that excited about our little 150 barrels that we do.
1:22:28
Yeah.
1:22:28
But our hope would be, with this, we could get to a point where we could be attractive enough to make it a good partnership for both.
1:22:33
Right.
1:22:35
So we are asking you guys to do a do pass on this, and thank you for your time.
1:22:39
Any questions? All right. Thank you so much for being with us. That's a great perspective. Sam DeWitt.
1:22:49
We got one more speaker, so if y'all just hang tight, we're gonna get through the list.
1:22:53
Good afternoon. Thank you. Uh, my name is Sam DeWitt. I'm the state government affairs director for the Brewers Association. We're the 501[c][6] national trade organization dedicated to, uh, promoting and protecting America's craft brewers, um, in all 50 states. Um, I'm here to speak on behalf of our members who are increasingly unable to reach the marketplace under current distribution laws in this state, not because of lack of consumer demand, but because of structural constraints in the distr- distribution system.
1:23:25
According to the National Beer Wholesalers Association Beer Purchasers Index, or BPI, it's an informal monthly statistical release to show industry beer purchasing activity. Wholesalers are looking to scale back on craft purchases, cutting craft brands from their inventory, and are not seeking to add new craft products to their shelves and their trucks. What this shows is that distributors broadly expect to purchase less craft beer, not more. This reflects system-wide risk management, tighter inventories, higher costs, and a reduced ability to take on new or small brands.
1:24:03
Wholesalers are not taking our calls. They're not calling us back. They're not interested in a small brand that has no other way to reach the market except through our tap rooms. For small brewers, the impact of limited self-distribution is straightforward. High-quality local breweries are often unable sec- to secure a wholesale partner. When that happens and self-distribution is not allowed, the brewer has no viable path to market, even in their home county. Our statutes were written assuming distributors would be willing and able to bring small brands to the market, but the data shows that that assumption never, uh, no longer reflects the current conditions.
1:24:43
Authorizing limited, capped self-distribution for small brewers is a practical and targeted solution. It preserves the three-tier system while allowing brewers to demonstrate demand, build a track record, and reduce risk before a wholesaler will come calling. Self-distribution does not replace distributors. It's not intended to. It creates a bridge when a distributor capacity is constrained. Many successful brands have historically entered wholesale networks only after proving themselves in this way.
1:25:14
This happens in 38 states across the country. In fact, uh, th- in the places where this practice is already authorized, it has paid dividends for small brewers and wholesalers alike. Not one of those 39 jurisdictions has seen damage to their wholesale marketplace, not one.
1:25:32
Do those 38 jurisdictions have the three-tier system, or just-
1:25:35
Yes
1:25:35
... exceptions to it?
1:25:37
Yes. There are a few s- exceptions here and there. Um, some have a, a softer three-tier system, but by and large, th- the lion's share, the serious lion's share all have three tier.
1:25:49
Okay.
1:25:49
Yeah. Uh, this proposal doesn't force distributors to take on risk. It shifts that risk to our members so they can carry the risk until they reach a point where they're ready for wholesale distribution. Allowing limited self-distribution aligns our laws with today's market realities, supports local businesses, and strengthens the long-term health of the beer marketplace. I urge you to support Senate Bill 456. I thank you, and, and we'll take any questions.
1:26:18
Questions from committee members. I got a, um, question over here from the minority leader.
1:26:25
Thank you, Mr.-
1:26:25
You're recognized for a question.
1:26:27
We... As you're defining the small brands, I was just curious, as the young man who just testified, would it be based on barrels? He said he was doing 150 barrels. Would it be based on barrels? How do y'all kinda define that? Is there a set definition of what a small brand truly is?
1:26:43
I'll let Joseph take that, if that's all right, Chairman.
1:26:46
Uh, Leader, Leader Jones, our, our definition mirrors the na- national definition-
1:26:51
Okay
1:26:51
... and it's under... And it's a big number, right?
1:26:53
Okay.
1:26:53
But 99% fall so far below the number, and it's up to two million barrels a year. And really what that does is that just has separation between breweries who are, and there's two of 'em in the United States, who brew many, many millions more than that, right? For independence reasons, and market, and commerce reasons. But, um, most of our folks are hundreds of barrels, if not a few thousand barrels.
1:27:19
Okay.
1:27:19
And someone at 150 barrels a year simply can't attract a wholesaler to take their product. It's, it... And I get it, right? It's, it's a tough marketplace, and there's only so much spo- space on those trucks.
1:27:33
One more, Mr. Chair.
1:27:34
Go right ahead.
1:27:34
It, it, would there be kinda like a magic number that a distributor would not, would b- be more inclined to take that on? So we know 150, they're not inclined. Would it be in the thousands? Would... From your experience, what would you say?
1:27:46
It's probably... Thanks for the question. I, it's probably up to the distributor-
1:27:50
Okay
1:27:51
... um, as far as what risk they're willing to take on an unproven brand. Um, and I think that's the crux of this, of this whole argument, right? Is everything is up to the distributor. We've got breweries in this room who have called distributors looking for a wholesaler, and won't get called back. They won't even consider bringing on a small brand that hasn't proved itself. This allows a brewery to go out in the marketplace, show, "Hey, I, I sold this many cases in this county.
1:28:23
I've built this name ID. People like this beer. They're buying this beer. Do you wanna take us on as a client, and let's, let's distribute this, you know, profitably for everybody?"
1:28:35
I'll leave it at that.
1:28:35
Okay. So is there a, like a magic number that you could craft a solution that said, up to 1,000 barrels, if you are unable to find a distributor, you may self-distribute? I'm just wondering if there's some compromise here where you, you solve the problem, you know, for the really small guy, but don't let 'em cherry-pick, you know?
1:29:00
That... I mean, from my perspective at the BA, getting any sort of self-distribution provision in the Georgia law would go a long way for the brewers of this state. Um, so if it was, you know, up to 1,000 barrels you are allowed to self-distribute, that to me, as, as, from a national perspective, that does make sense to me. But I would defer to Joseph on what makes sense for his members. Um, but yeah, I, I think a magic number of 1,000 barrels, I think that's a, a nice sweet spot where anything under that, it's gonna be very tough to get a wholesaler's at- attention.
1:29:36
It just is.
1:29:39
All right. I, I can see both sides of this clearly, that I, I don't think it's fair to force a distributor to carry very small volume producers. You know, on the other hand, I, uh, it's har- sort of harsh to not allow self-distribution if you can't get a wholesaler or distributor to help you out, you know?
1:30:01
And, and I think that's our, our point, Chairman, is there's a lot of great beer. A lot of it's represented in this room, and a lot of these folks just don't have the, have the velocity, they don't have the sales, they don't have the name ID to get picked up by a wholesaler. Let them take the risk of the first couple of years while they build their, build their brands, while they find a brand that, that catches fire or wins an award at a, at a beer festival.
1:30:28
What if you forced them to use a distributor once they exceeded that 1,000 barrels?
1:30:34
I mean, if they wanted to continue their distribution, they'd probably have to, regardless of whether it was in statute that you were forcing them to do so.
1:30:42
What do you think about THC beverages? We'll, we'll save that for another day.
1:30:47
You asking me personally?
1:30:48
Yeah.
1:30:48
I'm from Colorado. That's a dangerous question to ask me.
1:30:52
We'll save that one for another day. Uh, Kevin Curton, you're in the audience, Mr. Guinness. Uh, you got anything you wanna add here? You're one of my favorite testifying witnesses, and you- All right, you just save that thought. We'll see where the EMC stand on this issue. I have one more witness, Mr. Reverend Mike Griffin.
1:31:17
Thank you, Mr. Chairman. I am Mike Griffin. I'm Public Affairs Representative of the Georgia Baptist Mission Board, and thank you for the opportunity to be able to testify here. Um, Georgia Baptist, again, represent, you know this, approximately 10% of the population, 1.4 million Georgians, over 3,400 churches. And I've been testifying on this issue, uh, probably none of you were here except you, in 2007 when I was still just a Baptist pastor. And in 2000-
1:31:46
If I remember, that was right after Alan Powell whipped your tail in that election, right?
1:31:50
Yeah, where he did. Yeah.
1:31:51
Refresh the old heads here.
1:31:53
And now I am his-
1:31:54
I'm just doing that to kind of suck up to Alan Powell a little bit.
1:31:56
I understand. And now I'm his number one constituent. But anyway, um
1:32:03
It, uh, two years ago, his last cam- campaign flyer had me and him in it here at the capital. But anyway, uh, so we go a long way back. Been there, done that. Um, but in 2021, we passed a resolution, uh, dealing with, uh, continuing to regulate and not loosen restrictions on alcohol. And we talked about the fact that availability equals sales and sales equals consumption. Consumption equals to potential of societal problems, which we just heard from Michael Mumper here.
1:32:36
And, and the point here is that we're not for prohibition. We're not saying that you shouldn't drink. We all have our own personal opinions on that. But what I'm concerned about is, is I don't know how many of you really understand the history of this nation in relationship with this. And we're not against the craft brewers. We're not, we're not saying they're here to make people suffer. I'm not... That don't play... I don't believe that's any of their intention. But let's just go back and get the 40,000-foot view of this issue, and if you go back to pre-1920, and I don't know if any of you were still alive then.
1:33:10
Anybody? Okay, I'm 65, so I've been around a little bit. Anybody here older than me? Raise your hand. All right. But anyway, um- ... if you go back to a pre-1920 era, you have a Wild, Wild West of alcohol, and there's a reason why even I think there were women marching in the streets about prohibition. Y'all remember, that happened in 1920. And, uh, and then in 1933, prohibition was over with, and in 1933 was when the three-tier system started in the State of Georgia.
1:33:46
And, you know, and so the point was, and I mean, I have an article going back to, uh, the Washington Post, and their, their title was, years ago, "Alcohol is Still the Deadliest Drug in the United States, and It's Not Even Close." Okay, so, so my, my point is, is simply this. There was a reason why they wanted to regulate it, because they wanted to make sure that it, that the accessibility of it was properly restricted, but they believed in the right of people to be able to drink, to be able to have that opportunity to be able to do that.
1:34:23
Now, anybody here was alive in the 1970s? I was there. I remember that. I remember as a teenager what happened where we legalized liquor down in Thomasville, Georgia. But, and I, and I, and I realize the stipulations on them. Oh, we just want to be able to give, give people the access to be able to do that, and we're not even gonna do it on Sundays.
1:34:45
Mm.
1:34:45
That's over with now. And I sit right here in 2000, you know, 2007, and talked about this, and it, and it seems like if we're not careful, we're going back to a pre-1920 era if we don't maintain our proper restrictions, and we're gonna end up to a Wild, Wild West of alcohol again if we're not careful. And I said, I've, I've said for years, I- i- you have to be careful. And I'm not saying... I mean, I, I agree with Stoney and Martin. We all worked together on these issues. It's amazing, 'cause they made jokes about us in the Senate.
1:35:17
But anyway, um, but, but the, but the point is simply this. If we're not careful, it's almost like we're not gonna be satisfied till it's sold 24/7, including lemonade stands one day.
1:35:28
Yes.
1:35:28
And I agree with Senator Lucas. Now, we don't always agree a lot. Man, I was 150% with you today. And, and my point is this. It's like when you give an inch, if you're not careful, they'll take a mile. And it's just like, it just keeps moving, moving, moving, moving, whereas we start out with these strict restrictions in 1933, and now we're moving back to 1920 if we're not careful.
1:35:50
Are, are you-
1:35:51
So that's our concern and our opposition
1:35:53
... your opposition is the increased availability that this would-
1:35:55
Right
1:35:55
... introduce?
1:35:55
'Cause availability does equal sales, and there's a reason why they call them convenience stores.
1:36:00
Okay.
1:36:00
Because it makes it more convenient, makes it more accessible. And again, a- as Michael was saying, this is, this is, again, this is not a Coca-Cola you're selling here. Uh, this is different, and it does have some, uh... I, I really believe it's, it's a, a- and when it comes down to it, it's a public health and safety issue is what we're talking about.
1:36:20
Are you worried about the safety of the product that they're selling, that somebody's gonna get some bad liquor or something, or bad beer, I guess, in this new law?
1:36:26
Well, I'm not worried about the value of it or the quality of it. I'm talking about the accessibility of it-
1:36:32
Okay
1:36:32
... and the very nature of the simply w- what it is, period.
1:36:35
All right.
1:36:36
Thank you, Mr. Chairman.
1:36:37
Questions from committee members? All right.
1:36:39
Thank you.
1:36:40
Thank you for sharing that, the perspective with us. And that concludes all the testimony on this today. We will, uh, think it over, give our committee members time to digest the arguments made and to review the legislation. If anybody has any proposed amendments that we ought to consider if we bring this back up for a vote, please present those to me sooner rather than later. I do not anticipate having this back up again this week, so you got at least a week to think that through, um, 'cause we do like to have them at least 24 hours in advance of a meeting.
1:37:17
Uh, we'll be meeting again, uh, this Thursday afternoon, and I don't have the agenda yet, but we'll have that put out, uh, tomorrow. And if, again, any committee members that have bills in the committee that want a hearing, let me know, uh, so that I can take that under consideration. Thank you, everybody, for being here and being attentive and presenting those different perspectives. We stand adjourned.

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