Testimony in support of SB 163: An Act related to “alcoholic Beverages; regulation of the manufacture, distribution, and sale of malt beverages”
Marc Hyden, Director of State Government Affairs, R Street Institute
In Support of SB 163: An Act related to “alcoholic Beverages; regulation of the manufacture, distribution, and sale of malt beverages”
February 6, 2023
Senate Regulated Industries Committee
Chairman and members of the committee,
My name is Marc Hyden. I am a Georgia voter and the director of state government affairs at the R Street Institute, a nonprofit, nonpartisan public policy research organization. Our mission is to engage in policy research and outreach to promote free markets and limited, effective government in many areas, including promoting safe and sensible alcohol regulation reform. That is why Senate Bill 163 is of special interest to us.
Georgia lawmakers have labored to keep Georgia the best place to do business for a record 10-years running, which is a notable and laudable track record. Unfortunately, that success hasn’t translated to all industries or benefited all business sizes. In fact, the Small Business and Entrepreneurship Council ranked Georgia at an underwhelming 22nd out of 50 states for its regulatory and tax environment affecting small business; the Tax Foundation ranked Georgia 32nd out of 50 for its small business tax environment; and Forbes didn’t even list Georgia in the top 15 states to start a small business.
Put simply, regulatory burdens are straining many of Georgia’s small businesses, and nowhere is this clearer than in small breweries. Not long ago, small brewers began cropping up across Georgia, and what began as a unique phenomenon has since exploded. In 2011, there were only 21 craft breweries in Georgia, but today there are around 171—generating an economic impact of over $1.9 billion annually. Thanks to the entrepreneurs who took the financial risk of opening small breweries, Georgia is enjoying the benefits.
These businesses provide tax revenue that support state programs; rent otherwise empty business and industrial space; and provide jobs of various kinds, including valuable working-class roles that don’t require expensive and hard-to-obtain credentials or degrees. Moreover, the alcohol industry has been one of the leaders driving manufacturing job growth as of late. This should be celebrated, and if one only considered this data, it would intimate a thriving and healthy industry in the Peach State.
Regrettably, there are some other less than impressive statistics worth noting. There has been a recent spate of brewery closures. Last year alone, there were at least seven Georgia breweries that shuttered their businesses after years of serving the community. Some of these were notable mainstays too, including Second Self Beer Company, Orpheus Brewing and Burnt Hickory Brewing. These don’t represent fly-by-night businesses that failed shortly after opening either. Orpheus Brewing operated for almost nine years, Second Self Beer Company for nine years and Burnt Hickory for more than ten years. With their closures, people lost their jobs and long-standing community staples.
The sad reality is that opening a small business is a risky enterprise, and many inevitably will fail for myriad reasons. However, Georgia’s regulatory environment is one of the reasons why many breweries are struggling. In an effort to curb some antiquated and burdensome laws, Sen. Chuck Hufstetler introduced Senate Bill 163. This makes some minor tweaks to the Georgia code that could eliminate government impediments hurting Georgia’s small businesses. These include removing small breweries’ limit on sales for off-premises consumption, eliminating the cap on to-go sales, allowing small breweries to sell up to 3,000 barrels of their product directly to retailers and permitting them to donate malt beverages for charitable purposes.
Adopting these reforms would help modernize the code for a changing and novel business model that stands poised to contribute to our communities. Without adopting them, however, Georgia breweries will continue to face needlessly burdensome regulations—that may help ensure their demise. Considering the challenges facing small breweries, these are small common-sense steps to help foster a better small-business environment. As such, I encourage the committee to support this measure and help give small businesses a better chance of surviving.
Thank you for your time.
Director, State Government Affairs
R Street Institute