Debate brewing between local beer brands, state law

September 29, 2008 By Molly Parker,Staff Writer Coast Brewing Co.’s HopArt IPA flows freely from the tap at Evo Pizzeria in North Charleston’s historic downtown district. “It’s our biggest seller, for sure,” said Brendan Sweeny, the restaurant’s general manager. Other establishments in Charleston, West Ashley and Mount Pleasant reported the same. The local brewery, just 1 year old, is so popular its makers can’t keep up with demand. It seems that owners David Merritt and Jaime Tenny are whetting Charleston’s appetite for locally brewed beer. That public support could help in the spring as they attempt to persuade South Carolina’s traditionally conservative Legislature to loosen the state’s beer and liquor regulations. Their main request: Allow tastings and beer sales at the brewery. Doing so could provide them additional income and spread the word about their label, they said. And eventually, if enough microbreweries follow suit, they contend it could create a major tourism boon for the area. “If you want a vibrant beer business in South Carolina, they are going to have to change some laws,” Merritt said. Though it’s regulated under a different set of alcohol laws, Wadmalaw Island-based Firefly Distillery — which makes the region’s acclaimed sweet tea-infused vodka — will push for similar rights. The company’s efforts failed last year. State booze decree S.C. law requires distribution of beer and spirits through an independent wholesaler. The issue brewing in the Statehouse is part of a long-standing national debate over the middle man — the wholesaler who is required to transport alcohol from the manufacturer to the retailer — in the three-tiered system that has been the norm in every state since the 21st Amendment repealed Prohibition in 1933. Distributors are charged with collecting government taxes, monitoring and tracking their products and providing alcohol education. The majority of states have made some exceptions to the rule, allowing beer samples and sales at microbreweries, for instance. South Carolina allows local vineyards that right, but not breweries or distilleries. Brewpubs can sell their alcohol on site but cannot distribute it elsewhere. “There’s a lot of education that needs to be done in regards to craft beer. It’s really akin to wine,” said Tenny, who also heads Pop the Cap South Carolina, a nonprofit organization that supports the region’s craft beer industry — if you can call it an industry. Few local taps In a city that prides itself on originality in hospitality, a beer connoisseur is limited largely to national and international labels. Coast, Southend Brewery & Smokehouse and Palmetto Brewing Co. are the exceptions. Palmetto broke ground in 1993, becoming the first microbrewery to open in South Carolina in more than a century. Southend opened in 1998 as a brewpub, not a microbrewery, so its eight different styles can be consumed only at the restaurant on East Bay Street in downtown Charleston. Firefly started up in 2006 and remains the state’s only micro-distillery. In the 75th anniversary year of Prohibition’s repeal, supporters of homegrown labels across the country are asking state lawmakers to a take a hard look at laws that might inadvertently hinder the art. Brewing is as much a creative career as a scientific one. Request a wheat beer, India pale ale, barley wine or pilsner, and you know generally what to expect. Yet it doesn’t take a finely tuned palate to relish the differences among labels. Beer combines the creative blend of color, bitterness, flavor and aroma, a concoction devised through the mix of barley and hops, timing and temperature. The best judge of a recipe is the tongue, says Merritt: “Does it taste good or not?” Rapid popularity Apparently at Coast, it does. The microbrewery delivered its first barrel to Evo last September. Three months later, it had maxed out production and was in 32 different restaurants within a 15-mile radius of its home on the former Navy base in North Charleston. It is among the best sellers at Gene’s Haufbrau in West Ashley, said bartender and part-time manager Chris Ficara. “It’s a great beer,” Ficara said, “but the initial interest was because customers wanted to try a local beer, so I do think there’s room for growth there.” Tar Heel state goes home-brewedNorth Carolina is among those states that made exceptions for microbreweries, and the industry there is thriving. “I can see where it would be a big bar and hurdle to breweries if you were obligated to go through a wholesaler without a choice,” said Oscar Wong, founder and owner of Highland Brewing Co. in Asheville, N.C. His is the largest and oldest microbrewery in a city that has been sprouting them in the past several years. The town of about 70,000 people has one microbrewery for every 10,000 residents, with three more planning to open by year’s end, Wong said. Neither Wong nor the Asheville Area Convention & Visitors Bureau could assign a dollar figure to the microbreweries’ economic impact on the city. But one need look no further than the mid-September Brewgrass Festival, which quickly sold out of its 3,500 tickets, to see that it certainly makes one, said Dodie Stephens, bureau spokeswoman. Many of the attendees were from out of town, she said, dumping money into hotels, restaurants and other attractions. “The menus here for local beer are longer than the regular drink menus. We promote the microbreweries heavily on the tourism side,” she said. A legislative ally Merritt and Tenny thought about moving to North Carolina. But in the end, they decided their hearts were in Charleston and that perhaps they could teach this town a thing or two about the local brew. They have already had some success. Last year, Pop the Cap found a legislative ally in Republican Rep. Bill Herbkersman, who, along with his brother, founded the first brewpub in the state in the late 1990s. The two operated Hilton Head Brewing Co.; St. Simons Brewing Co.; and Columbia Brewing Co. The joy of local beer is in the naming rights, he said. For years in Columbia, they sold a football season favorite called Cocksure Red. “I think we’ll fight the fight again,” said Herbkersman, now a Bluffton real estate developer. “We’d be crazy if we didn’t, particularly with the influx of people moving in from the North. They are just used to local brews. I think if we do it, it really provides enterprise and jobs and we can really take advantage of an opportunity.” The organization scored its first coup last year, convincing lawmakers to up the alcohol content allowed in beers from 6.2% to 17.5% by volume. (Coast’s brews range from 4% to 9 %.) Pop the Cap got its name from the high-gravity beer fight. But it is about to adopt a more holistic label, the S.C. Brewers Association, and will continue to support the state’s fledgling craft beer industry, Tenny said. Wholesalers distribute power, tooIt won’t be an easy sell. The wholesalers’ lobbying arms have a tradition of wielding a heavy influence in political circles. Between 1990 and 2008, the National Beer Wholesalers Association ranked 26th in political donations, having given more than $18.5 million to congressional candidates. In South Carolina, between January 2007 and May 2008, the S.C. Beer Wholesalers Association spent $32,054 at Houston’s Enterprise Catering in Columbia to provide lunches for state lawmakers, according to records filed with the S.C. State Ethics Commission. Julie Cox, executive director of the wholesalers association, said the organization is open to discussion. It’s too early to say exactly what the state’s two dozen distributors would sign on to, she said. But the time might have come, she conceded, to carve out exceptions for micro-breweries and distilleries in the interest of promoting small business and the tourism economy. “We’re not closing the door to anything,” Cox said. “We’re just strongly supporting our three-tier structure.” When session convenes in 2009, the brewers are hoping for a compromise. Distributors are vitalMost microbreweries of any size could not operate without the help of the middle man. Palmetto, even in its infancy, was able to find a distributor in Charleston with ease. “For us, breaking into the market wasn’t a problem,” said Palmetto co-owner Louis Bruce. “We were the very beginning of the trend. We were on the front page of the paper and stuff. Microbreweries were kind of a big deal, and it was sweeping the country, and it was just timing and dumb luck on our part, too.” Firefly co-owner Scott Newitt said that, if anything, allowing on-site tastings and sales should help distributors. The more popular the product, the more places will want it, he said. Last year, Firefly lobbied for a bill that would have allowed the distillery to sell directly from its shop. It passed the House but was never called to a vote in the Senate. Firefly, like Coast, will be back at it this spring, Newitt said. “Why should Kentucky have the Bourbon Trail and Tennessee the whiskey houses, but, in South Carolina, tourists cannot sample our vodka products?” he said.