We have a little more on the to-go beer situation in Georgia. A lightning fast recap: Breweries in Georgia cannot sell beer directly to customers. They can give away samples to those touring, but NO DIRECT SALES. After lobbying hard in the first half of 2015, Senate Bill #63 (an extremely watered down version of the original proposal given to the legislature) went into effect July 1st. At the time it was very clear that breweries in the state could charge variable prices for tours, and give away up to 72 ounces of “souvenir beer” to-go. Beer is not sold, so no direct sales to the customer, but the change could be (and has been) a new draw to the taprooms and extra income for the small business.
With that change in place, breweries offered staggered tour pricing, ranging from the low-end price for just samples, or upper end pricing with the maximum of 72 ounces of beer to-go. Additionally, this gave Georgia breweries a new ability to release small-batch bottles to-go as a tour souvenir. Having the ability to release a few hundred bottles at a tour can be a great financial boost for a small brewery.
Last week, the Georgia Department of Revenue “reinterpreted” SB#63, stating tours CAN NOT vary in price based on the cost of souvenir beer to-go. All brewery visitors must be charged the same price for a tour. This damaging blow to what was clearly outlined on July 1st, has caused breweries to cease souvenir beer on tours this week.
As you can imagine, this is problematic. Having just one tour, a $20 dollar or higher tour, where the visitor gets the samples and beer to-go, could kill the volume of tap room visits. Going back pre-July 1st pricing WITH souvenir beer? The brewery loses money. For now, breweries have gone back to pre-July 1st days, with a tour and free samples only.
Despite this seemingly dismal, disenfranchising move by the DOR, special bottle releases are still on the table. Let me tell you why.
Recently, Creature Comforts in Athens, Georgia released See The Stars Imperial Stout, on a special release tour day. Tickets were $75 dollars. The brewery didn’t charge more for the tour based on the souvenir alcohol. The higher price was justified because of all the value-added options that day. That included music, free chocolate, glassware, etc. Additionally, there was one price for ALL attendees that day. Also, See the Stars bottles have never been distributed, and has no recorded value in the market as it has never been sold. Right?
Such a drastic reinterpretation of SB63 should warrant a 30-day public question and answer period. That didn’t happen, and additionally, when the Georgia Craft Brewer’s Guild requested a meeting with the DOR, this is the reply they received:
“Thank you for contacting the Georgia Department of Revenue regarding the Policy Bulletin governing facility tours released last Friday, September 25th. I forwarded your meeting request to the appropriate persons within the Department and have been informed that a meeting will not be accommodated at this time. The Department is firm in its reading of the law as set forth in the bulletin and will not be entertaining any alternative interpretations.”
It is rumored that this reinterpretation of the bill comes is due to extra pressure from the state’s distributors. A source with a local distributor tells Beer Street Journal that higher-ups in the organization feel that even one six-pack of beer leaving a tap room as a souvenir damages their business and breaks down the 3-Tier system.
For now, you will see some special souvenir beer to-go tour days in the state, for tours where the brewery brings in bonuses to justify the higher tour prices that EVERYONE will be charged on that day. As it has always been, the beer is free, and the tour is more expensive because of jugglers, palm readers, a special band, or the amount of free hugs the brewery will give out as a bonus. NOT because of the alcohol.
The distributors continues to harp on the concept that allowing breweries to directly sell to consumers damages the three tier system. If this was the case, why have do many states allow breweries to do so? Let’s not forget that here in Georgia, wineries can sell directly to the public from their tasting rooms.
The problem lies not with the producers, it lies with the distributors. They are drunk with power because they can make or break a brewery, winery or distillery and they use their money to line the pockets of politicians who will do their bidding (The best government money can buy….). With it being extremely difficult to get out of one’s distribution contract with a distributor, it does put the craft breweries in a bit of a spot. What if the distributors decide to continue to throw their weight around? At one point, they tried to get the samples curtailed completely, which would have definitely killed the craft beer industry in the Georgia.
It also puts the consumer in a Catch-22, as you can’t boycott the distributors without potentially hurting the breweries that are being affected.
The three tier system does have a place in the current times, the problem is that in some places, the distributors are behind the times.
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