By Donald Bryson
During the COVID-19 shutdown, many small businesses are struggling to keep from permanently shutting their doors. For those watching, we can see the grit and determination of America’s entrepreneurs. The craft alcohol industry is adapting to the current crisis with an entrepreneurial spirit and drive that is benefiting others, from the health-care worker to those facing unemployment.
The craft beer industry, for example, is a story of entrepreneurial success. While overall beer consumption has decreased, the craft beer market has continued to increase. In 2008, there were only 450 microbreweries in the U.S.; by 2018, that number had increased more than a factor of 10. Microbrewers and brewpubs together employed more than 150,000 direct employees.
Craft distillers have seen similar growth trends with an increase in the number of craft distilleries by 180% since 2013. North Carolina is an example of this trend. Distilleries and breweries added more than $3.4 billion to the state economy.
But the COVID-19 situation threatens all of that. Many of these small brewers rely on on-premises sales to make ends meet, while it provides a supplemental income to distilleries. With bars and restaurants closed, so too are their income streams.
Yet even in the face of all this adversity, these industries have been stepping up to help their fellow citizens. The Southern Distilling Company of Statesville made hand sanitizer for local health-care workers, inspiring others across the state to do the same. Of course, this required special approval from the North Carolina Alcoholic Beverage Control Commission so that businesses could help out their local communities. There are currently 17 states and several jurisdictions that exert substantial government control over their alcohol industries.
North Carolina breweries are also partnering with breweries across the nation to make “All Together” beer in support of the hospitality industry. Breweries in other states have also done everything from offering free beer to health-care workers, to making meals for those who are unemployed. This is, of course, on top of making sure we have something to drink with our friends during our virtual happy hours.
Recognizing these extraordinary circumstances, many states are relaxing regulations, not just when it comes to making hand sanitizer. States have done everything from allowing direct delivery of alcohol, having curbside pickup of beer and to-go mixed drinks, and removing taxes on production. Texas even ended a ridiculous requirement that trucks couldn’t deliver both groceries and alcohol.
Removing these restrictions are not enough to make up for the lost revenue due to COVID-19, but it has undoubtedly helped many small producers stay afloat. Unfortunately, it may not be enough as a recent survey suggests that 60% of craft breweries may close by July if they can’t open up for full business again soon. Many will never reopen if they close.
For those that do survive the economic crisis, and those that start up afterward, Americans should ask themselves why the previous restrictions should return at all. Why should local producers – or any producers, for that matter, – be prevented by the government from delivering their products to grocery stores or bars? Why shouldn’t they be able to ship directly to consumers? Why do taxes account for nearly 40% of the cost of getting you the beer to begin with?
Many of these regulations were added post-Prohibition and only exist today to prevent competition and enrich entrenched interests. As this situation has laid bare, they are unneeded for public safety.
The COVID-19 situation has shown that when it comes to serving our fellow citizens, businesses, and the people who work at them are the front line in any crisis. Red tape too often gets in the way of helping one another. But while much of that tape has been suspended, that’s not enough.
The craft distillers and brewers of America were here for us during this crisis. It’s time we were here for them after it. We should cut the red tape that has been holding them back and get government out of their pocket.
Anything less would be unAmerican.
– The Center Square
Donald Bryson is president and CEO of the Civitas Institute, a public policy non-profit organization in Raleigh.