Office Space: a metaphor for Georgia alcohol regulation
When asked what his job at Initech entails, Tom responds: “Look, I already told you. I deal with the [expletive] customers so the engineers don’t have to! I have people skills! I am good at dealing with people! Can’t you understand that?! What the [expletive] is wrong with you people?!” Tom was little more than a middleman between the engineers and customers—an extra cog created by his bosses—and he knew it. His responses left the Bobs thoroughly unimpressed.
While the scene was meant to be light-hearted, it’s reminiscent of Georgia’s three-tier system of regulating alcohol. It’s an outmoded vestige that stems from the prohibition era. In large part, it imposes restrictions “so that no beer producer can sell beer to a customer without first getting it to a wholesaler, who then delivers it to a retailer. Similar structures are in place for wine and distilled spirits in Georgia,” according to 11 Alive News.
The notion of the three-tier system is patently silly. In few other industries would the government prohibit producers/manufacturers from distributing their goods to retailers or selling directly to consumers, instead forcing them to rely on middlemen like Tom from Initech. But that’s the system we have. Breweries cannot sell their products on a large scale directly to just about anyone. Rather, by law, they must use a wholesaler to fill that role.
Thankfully, as Georgia’s craft beer, wine and distillery industries have expanded, some exceptions to the three-tier system have been enacted, but they remain overly limited and restrictive. As it stands, no person can buy more than 288 ounces of beer for off-premises consumption per day from a brewery, which equates to 24 12-ounce bottles—essentially a case of beer. This is incredibly strict. In fact, traditionally teetotalling Alabama permits three times this level, while other states have no limit whatsoever.
There’s good reason to remove the daily limit for small breweries, as is proposed by Sen. Chuck Hufstetler’s bipartisan bill—SB 420. While 288 ounces may sound like a lot of beer, it isn’t if you only purchase beer every couple months or are buying it for a gathering, reception or family reunion. Indeed, I think most would agree that you may need far more than 24 beers to survive a family reunion. What’s more, why did the legislature settle on a 288-ounce limit, instead of 388, 488, or any other number? Nobody seems to be able to give me a good answer.
Many Georgia breweries are small businesses that are struggling to stay afloat, and regulations that limit their sales naturally hurt their bottom line. This may indicate why Georgia has one of the country’s lowest number of breweries per capita. Eliminating the daily limit would expand a small—but meaningful—exception to the three-tier system for fledgling companies that would otherwise have to rely on and pay wholesalers for the privilege of getting their products in consumers’ hands. But relying on wholesalers has other drawbacks. Adding a middleman—wholesalers—to the equation burdens breweries and drives up the price of alcoholic beverages—a cost that is handed down to customers.
None of this isn’t intended to be a slight against alcohol wholesalers. They fill an important role in our economy—especially to large producers who can afford their services—but to extend the rigid three-tier system’s regulations to small breweries to limit their direct-to-consumer sales is bad for business.
If breweries do not want to sell more than one case of beer per patron per day and instead prioritize off-site sales via wholesalers for the bulk of their sales, then so be it. However, the government shouldn’t force them to adopt this path to their detriment. Rather, Georgians should want to see small businesses like breweries succeed and boom throughout the state. SB 420 could help that become a reality without greatly impacting wholesalers’ bottom lines, since on-site brewery sales for off-premises consumption are a relatively small part of the market.
While it would behoove lawmakers to re-think the state’s alcohol regulatory framework, if the Bobs were auditing the three-tier system’s effects on small Georgia breweries, it’s easy to imagine them asking wholesalers, “what exactly do you do around here?” They might respond: “Look, I already told you. I deal with the [expletive] retailers so the breweries don’t have to! I have retailer skills! I am good at dealing with retailers! Can’t you understand that?!”
Respectfully, no, I can’t.
Image credit: JackF
