Alabama's BIG small beer problem

During a recent visit to North Carolina, I picked up a growler of craft beer -- a 64 ounce closed container from Natty Greene's Brewery -- to enjoy at home. In the Tar Heel state, and 47 other states, direct take-home sales of beer like this are a normal part of the craft brew scene and a staple of brewery operations. But, in Alabama and Georgia, it is illegal for breweries to sell beer directly to consumers for off-premise consumption.

Daniel J. Smith is an assistant professor of economics at the Johnson Center at Troy University. (Submitted photo)Shelly Haskins | shaskins@al.com 

The new Beer Jobs Bill in Georgia (SB 63) means Alabama could soon be the only state to prohibit small, craft breweries from selling their beer directly to consumers for off-premise consumption. This law is unnecessary and stifles job-creating economic activity in an industry that is booming in other parts of the country -- an exciting anomaly amid the past few years of economic lethargy. It's time for Alabama to catch-up with the rest of the country and unleash the potential of this business sector.

Craft beer has been a rapidly expanding industry; driven by small business owners across America. In 1994, there were just 329 brewpubs and 192 microbreweries in America. Today, there are more than 1,200 brewpubs and more than 1,400 microbreweries.

 The National Brewers Association reports that in 2013 alone, craft beer sales grew 17.2% in the United States and U.S. exports of craft beer increased nearly 50%.Unfortunately, this artisan craft has not reached Alabama. In 2013, Alabama had only 13 breweries while neighboring Tennessee had 35 and Florida had 66.

Direct, take-home sales are a steady source of revenue for breweries, especially from their most loyal customers. While overall, these types of direct sales ultimately are a small part of a successful brewery's sales, it makes all the difference in the world to a new brewery trying to establish a regular customer base.

Every dollar of revenue matters for craft breweries that often must operate for several years to turn a profit on their initial investments costs. A growler, for those Alabamians who have not tasted the freedom beyond our borders, is a container that holds four pints of tap beer. Direct sales of growlers and pints (and an array of other sizes) allow customers to purchase beer that they often aren't able to purchase in common stores or restaurants, straight from the tap to consume later at home, or to share with friends.

Furthermore, these types of sales are important for small, local breweries in getting their beer out to the public and building brand recognition. Because it is extremely difficult for newer, small breweries to get dedicated taps at bars and restaurants, or get their beer onto store shelves, direct sales and word-of-mouth marketing by loyal customers are critical to getting off the ground and growing.

Keeping off-premise beer sales illegal in Alabama unnecessarily restricts job growth and brings the craft brew revolution to a screeching halt along Alabama's borders (especially when combined with additional, unnecessarily burdensome regulation - especially Alabama's competition-reducing franchise laws). Bringing Alabama's craft beer production up to the national average by relaxing unnecessary regulations could result in up to 3,000 more jobs for Alabamians.

Wineries in Alabama have been able to make direct take-home sales to Alabamians for decades. It's now time to extend the same right to our craft brewers and their customers. Alabama's leaders have rolled back some particularly onerous regulatory barriers in the brewing industry over the last few years and the number of breweries in Alabama has nearly doubled as a result, creating nearly120 new jobs in the industry since 2009. Imagine what would happen if we rolled back more regulatory hurdles, especially ones that nearly all other states have found unnecessary.

While a Natty Green's growler sits on my den bookshelf to remind me of my visit to North Carolina, it is illegal for visitors to grab a similar memento from the Fairhope Brewing in Fairhope, AL.

There's no good reason for this restriction. Alabama's policymakers should stay true to our motto and defend the rights of consumers to purchase growlers and pints for off-premise consumption. In doing so, they'll make it a lot easier for the small business owners to develop and grow the craft beer industry in Alabama -- and that benefits beer lovers (such as myself) and non-lovers alike.