SC Beer Distributors Oppose Job Creation in SC
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Jim Kirkham, Chairman Chip Comer, Chairman-Elect Schipp Johnston, Treasurer Julie Cox, Executive Director 1114 College Street ● Columbia SC 29201 ● www.scbwa.com ● May 23, 2014 Robert M. Hitt, III, Secretary Department of Commerce 1201 Main Street, Suite 1600 Columbia SC 29201-3200 Dear Secretary Hitt: The South Carolina Beer Wholesalers Association wholeheartedly supports economic development and the growth of the craft brew industry in South Carolina. However, we strongly oppose the dual licensure inclusion recently proposed by the South Carolina brewers and the brewpub amendments currently contained in H. 3512. Unlike we have been portrayed, we do not base our opposition on controlling or inhibiting small brewers from expanding their business model, and we do not impede economic progress in South Car olina. Rather, dual licensure on the producer and retailer tiers presents unintended consequences, including the increased potential for legal challenges to South Carolina’s three-tier system. Three-tier laws level the playing field for small brewers to get to market without discrimination, fostering the well-deserved and growing market presence and share small brewers are experiencing. The Wholesalers supp ort continued evolution and growth, but doing so at the expense of three-tier’s anti-discrimination, tied house, and financial separation policies is extremely myopic for the industry and S outh Carolina commerce. Of equal concern, H.3512, as currently written, will separate smaller South Carolina brewers from out-of-state brewers and simply cannot withstand challenge under the Dormant Commerce Clause of the United States Constitution, leaving South Carolina’s three-tier system constantly open for attack. The language authorizes a separate type of brewery, one which is not constrained by current prohibitions against the provision of gifts and services to retailers, a practice commonly utilized in other industries, including alcohol before Prohibition, to foster retailer discr imination in favor of the giver. As such, the language violates t he Dormant Commerce Clause by discriminating in favor of in-state brewers who elect such licenses over all out-of-state brewers and in-state brewers who do not elect such licenses. Our wholesalers believe so strongly in the three-tier system that they voluntarily gave up their retail licenses in the 1970s in order to protect the integrity and separation of the tiers. This concession was made because they realized they could not fairly service other retailers without discrimination if they were also acting as retail ers themselves. Concurrently, legislation was al so
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Transcript of SC Beer Distributors Oppose Job Creation in SC
8/12/2019 SC Beer Distributors Oppose Job Creation in SC
http://slidepdf.com/reader/full/sc-beer-distributors-oppose-job-creation-in-sc 1/2
Jim Kirkham, Chairman
Chip Comer, Chairman-Elect
Schipp Johnston, Treasurer
Julie Cox, Executive Director
1114 College Street ● Columbia SC 29201 ● www.scbwa.com ●
May 23, 2014
Robert M. Hitt, III, SecretaryDepartment of Commerce1201 Main Street, Suite 1600Columbia SC 29201-3200
Dear Secretary Hitt:
The South Carolina Beer Wholesalers Association wholeheartedly supports economicdevelopment and the growth of the craft brew industry in South Carolina. However, we stronglyoppose the dual licensure inclusion recently proposed by the South Carolina brewers and the brewpub amendments currently contained in H. 3512. Unlike we have been portrayed, we do not base our opposition on controlling or inhibiting small brewers from expanding their businessmodel, and we do not impede economic progress in South Carolina. Rather, dual licensure onthe producer and retailer tiers presents unintended consequences, including the increased potential for legal challenges to South Carolina’s three-tier system.
Three-tier laws level the playing field for small brewers to get to market without
discrimination, fostering the well-deserved and growing market presence and share small brewers are experiencing. The Wholesalers support continued evolution and growth, but doingso at the expense of three-tier’s anti-discrimination, tied house, and financial separation policiesis extremely myopic for the industry and South Carolina commerce.
Of equal concern, H.3512, as currently written, will separate smaller South Carolina brewers from out-of-state brewers and simply cannot withstand challenge under the DormantCommerce Clause of the United States Constitution, leaving South Carolina’s three-tier systemconstantly open for attack. The language authorizes a separate type of brewery, one which is notconstrained by current prohibitions against the provision of gifts and services to retailers, a practice commonly utilized in other industries, including alcohol before Prohibition, to foster
retailer discrimination in favor of the giver. As such, the language violates the DormantCommerce Clause by discriminating in favor of in-state brewers who elect such licenses over allout-of-state brewers and in-state brewers who do not elect such licenses.
Our wholesalers believe so strongly in the three-tier system that they voluntarily gave up theirretail licenses in the 1970s in order to protect the integrity and separation of the tiers. Thisconcession was made because they realized they could not fairly service other retailers withoutdiscrimination if they were also acting as retailers themselves. Concurrently, legislation was also
8/12/2019 SC Beer Distributors Oppose Job Creation in SC
http://slidepdf.com/reader/full/sc-beer-distributors-oppose-job-creation-in-sc 2/2
Jim Kirkham, Chairman
Chip Comer, Chairman-Elect
Schipp Johnston, Treasurer
Julie Cox, Executive Director
1114 College Street ● Columbia SC 29201 ● www.scbwa.com ●
enhanced to support the separation of the tiers by permitting licensing on only one tier for each
producer, wholesaler and retailer. This system has succeeded in creating thousands ofwholesaler jobs in South Carolina and in the systematic collection of over $104 million each yearin excise tax revenue for the state.
We have prepared alternative language, outside of the brewpub section, which affords brewers the opportunity to create capital and expand brand awareness through food service andthe sale of their beer in conjunction with such food service. Under the wholesaler proposedlanguage, amount limitations imposed for sampling do not apply when the beer is sold inconjunction with a food service operation. We urge inclusion of this language in Section 61-4-1515 of the Code, as opposed to the currently proposed amendments to Article 17.
As Chairman, I reiterate that we support the craft beer industry and economicdevelopment in our state. We thank you for your consideration of this critical issue and standeager to discuss it at greater length and resolve it.
Sincerely,
Jim Kirkham
James F. Kirkham, ChairmanSCBWA Board of Directors
cc: The Honorable Nikki Haley,SC General Assembly, SCBWASarah Hazzard, SCMA
