What’s Brewing in the Old North State: An Analysis of the Beer Distribution Laws Regulating North Carolina’s Craft Breweries

BY Andrew Tamayo

As North Carolina’s craft beer industry has developed and gained a national reputation, the North Carolina General Assembly has recognized the promotion of the craft brew industry as a desirable and worthy goal. Despite this recognition, many craft brewers in the state feel that the laws can be improved to better promote the growth of the craft brew industry. This Comment seeks to explore ways possible modification to the laws that can achieve this objective.

The most contentious laws regulating craft brewers are those which form the “three-tier system,” a regulatory scheme that mandates that there be a middleman—also known as a wholesaler or distributor—between the brewer and the retailer. The three-tier system achieves this objective through licensing requirements, and additionally mandates that there be certain contractual provisions in the agreements between the brewer and the wholesaler. While some brewers are excepted from the licensing requirements, all brewers are subject to the mandatory contractual provisions, also known as the “beer franchise laws.” Some craft brewers and others in the beer industry believe that the three-tier system is antiquated, and that it should be modified—most notably by removing all limits to self-distribution and by excepting small brewers from the franchise laws—if not scrapped altogether.

DOWNLOAD PDF | 88 N.C. L. Rev. 2198 (2010)