The ABC Commission’s microbrewery rules…

This is why I just love, love, LOVE government regulation.  Because it leads to really sensible outcomes that clearly protect people and make our lives better.

Marty Kotis owns restaurants in Greensboro.  And, in a move I find entirely unsurprising, he’s decided to get into the microbrewery business.  Microbreweries are all the rage.  They’re popping up everywhere.  He’s already operates restaurants.  It seems logical enough.  And alongside other beers, he can sell his own beer both in his existing restaurants and in the brewery itself.  Sounds like a reasonable business plan to me.

But not to the ABC Commission.

The ABC Commission thinks we need to separate manufacturers, wholesalers, and retailers.  Can’t have someone operating in more than one of those spheres.  Well, I mean, sometimes you can.  There are exceptions.  But not for Marty Kotis.

According to a news report,

[ABC Commission Director of Public Affairs] Stevens explained, “If the brewery had been established first, as long as its production remains small enough, it can hold up to three retail permits and self-distribute its own product.”

But because Kotis already owns restaurants, Stevens said it is a different situation according to the law 18B-1116 entitled “Exclusive outlets prohibited.”

Kotis said he was given two options. “One option is to agree not to sell any of our beer in any of our restaurants ever. However, we could sell it other places. And to do that we would have to have a special exemption from the ABC Commission,” he said.

“The other option would be to transfer our assets over from the other companies, the other restaurant companies, into one entity and we would have to limit ourselves to only three restaurants plus the brewery.”

Huh?  Does anyone think this makes sense?  He can operate three restaurants and the brewery, but not four, and even that would require some sort of asset transfer workaround?  Or he could sell his beer in other restaurants but not in his own, and that would require a special exemption?  Really?

The ABC Commission is a relic of the prohibition era, and its time has passed.  We don’t need these sorts of laws and regulations that restrict normal business activities.  These rules don’t protect consumers or small businesses.  On the contrary, they make it harder for small businesses to operate freely, and they limit the choices available to consumers.  And that’s bad for North Carolina, as it either simply halts economic growth altogether, or shifts it to other states.

Time for North Carolina to get rid of these archaic regulations.

Julie Tisdale / City and County Policy Analyst

Julie Tisdale is City and County Policy Analyst at the John Locke Foundation. Before coming to the Locke Foundation as the research publications coordinator, she worked at the...

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