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GBWA stats don’t compare apples to apples

April 6, 2016

In a recent AJC article, Martin Smith – the Executive Director of the Georgia Beer Wholesalers Association (“GBWA”) – commented that, “[t]here is plenty of reason for craft brewers to be optimistic….Since 1995, the number of breweries in Georgia has increased 800 percent, while the national average is just 524 percent.”

See:  http://www.myajc.com/news/news/state-regional-govt-politics/georgias-craft-beer-brewers-still-waiting-for-comp/nqttS/

The stats used by the GBWA don’t compare apples to apples.  It used 1995 as the starting point and 2014 as the end point.  According to data from the Alcohol Tobacco Tax & Trade Bureau (“TTB”), in 1995, there were 6 breweries in Georgia and no brewpubs. In 2014, there was a total of 48 breweries and brewpubs.  An increase from 6 to 48 equals 800% growth.  Right?  Not exactly.

Why were there no brewpubs in Georgia in 1995 (the GBWA’s starting point)?  Because at that time brewpubs were not allowed in Georgia.  It wasn’t until the following year, 1996, that the Georgia law that allows for brewpubs went into effect.  In 1996, the addition of brewpubs lead to a reported 18 businesses with a Federal Brewer’s Notice in Georgia – most of which were brewpubs, as opposed to production breweries.

The GBWA is comparing a year (1995) when brewpubs weren’t allowed in GA to a year (2014) in which several brewpubs existed in GA.   If the GBWA were comparing apples to apples (using 1996 as the starting point), 800% growth would mean that in 2014 there would have been 144 breweries and brewpubs in GA – but as we know, there were only 48 Georgia businesses with a Federal Brewer’s Notice.  If we look at industry growth beginning in 1996, instead of 1995, Georgia has seen brewery and brewpub growth at a rate of only 260% -approximately a mere half of the national average of 524%.

But even that’s not the whole story.  The GBWA’s comments don’t reveal that all the craft breweries that existed in GA in 1995 went out of business, except one – that is, Atlanta Brewing Company now doing business as Red Brick Brewing Co.

Worse yet, assuming TTB data is correct, it’s quite possible that since 1995 more breweries have closed in Georgia than are currently open – a reflection of how difficult it is to profitability operate a brewery in GA.

As you can see, the picture ain’t as pretty as the GBWA’s statements make it out to be.

That said, there is, indeed, actual growth in Georgia’s craft beer industry – just not nearly to the degree asserted by the GBWA.  And, growth is a great thing!  What’s really interesting (or ironic perhaps) is that much of that growth that the GBWA is so excited about is actually attributable to the only major change Georgia has seen for malt-beverage manufacturers in the last 20 years – that is, the brewpub exception to the three-tier system – an exception which modernized the system, continues to help small businesses, and continues to create growth (!), but which is in opposition to the rigidity the GBWA wishes to maintain.

As such, just think of the growth were the state to allow breweries to make retail sales.

Tweaks of the three-tier system have proven over and over again to help the entire industry – just look at the 48 states that allow some form of retail sales.  Actually, in an effort spearheaded by Rep. Michael Caldwell, we tried to get the Georgia House of Representatives to study this issue, to analyze other states, to put the legislature in the position of making an educated decision on these matters.  What happened?  They wouldn’t even allow a vote on the study proposal…not even a friggin’ vote…ugh.

I’m reminded of the oft quoted Mae West quip, “I never said it would be easy; I only said it would be worth it.”

Keep the pressure on, folks.

Cheers.

 

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