From: amanda@mdanielassoc.com [mailto:amanda@mdanielassoc.com] !Sent: Thursday, May 15, 2014 10:24 AM!Cc: wanda@mdanielassoc.com; Mike Daniel!Subject: H.3512: Please Non-concur with House Amendments! !Senator:!!Mike Daniel, Wanda, and I wanted to touch base regarding H.3512, which was!amended in the House yesterday and will be in the Senate this morning for!concurrence or nonoccurrence. While our client, Anheuser-Busch, has no!problem with the original bill regarding the use of coupons in liquor!stores, they do have some serious concerns about one of the amendments added!by the House which is intended to make SC a more amenable environment for!craft brewers, in particular Stone Brewing Company. A-B is certainly not!opposed to brewpubs being in the state, we are completely supportive of!economic development initiatives, and we stand ready to work on a compromise!plan that will address everyone's needs. However, the particular language!in this amendment and the manner in which the law would be changed would be!detrimental to the current three tier system for alcohol distribution.!Therefore, Anheuser-Busch's primary concern is that this amendment erodes!the current system that works so well. We have been asked to share the!following information to provide more background on our client's concerns.!!Thank you so very much for your consideration, Senator. We respectfully ask!that you non-concur and refer the bill to a conference committee so that we!have a chance to be heard in a committee setting before the General Assembly!takes action. !!* This amendment erodes the current three tier system for alcohol!distribution. It picks "winners and losers" in the beer marketplace by!singling out a specific entity to which this law would grant a competitive!advantage over other brewers, distributors, and even retailers. There are!specific regulations and requirements that all brewers, wholesalers, and!retailers must comply with under the three tier system. We are happy to!provide you with more specifics regarding these items, but for now, the most!important thing to note is that each step of the system is heavily regulated!and carving out one group the way this amendment proposes to do will create!an uneven playing field and give some brewers a competitive advantage over!others. Anheuser-Busch's belief is that everyone should play by the same!rules. !!* The increase in the amount/definition is a primary concern for us!because there are already special laws for brewpubs which exempt them from!certain requirements, and in the case of this amendment, it is of particular!concern because it is taken in conjunction with the other items included in!or omitted from this amendment. For example, there are no limits on the!amount of beer that may be sold for off-premise consumption. In addition,!kegs, bottles, and cans would now be able to be sold to wholesalers with no!limit. !

!* Also, while we understand there is the issue of potential jobs to think about, we are not sure how a brewpub producing 500,000 barrels a year will employ the 400 people folks seem to be claiming is the case. At Anheuser-Busch's Williamsburg brewery, they produce 8.5 million barrels of beer per year. While this is far more than the five hundred thousand!allowed for brewpubs in the proposed amendment, A-B's Williamsburg brewery!only employs 72 salaried employees. If you include all of the part time!employees in the count, the total number of employees is still only around!250. Again, that's 250 total employees to produce 8.5 million barrels per year. We cannot imagine how 500,000 barrels per year will employ more than!400 people as claimed. !!* Anheuser-Busch is an advocate for beer period! The expansion of their industry is good for everyone. As stated above, A-B is certainly not opposed to brewpubs being in the state and they are completely supportive of economic development initiatives. However, this language is a radical change to current law and should not be considered until all stakeholders have a chance to weigh in n the issue. Passing this language via a last minute amendment is just not good public policy.! !Amanda K. Wuenscher! !MIKE DANIEL & ASSOCIATES, PA! GOVERNMENT AND PUBLIC AFFAIRS! !1122 Lady Street, Suite 705!Columbia, South Carolina 29201! !Office: 803.461.0400!Fax: 803.461.0399!Cell: 803.707.5466! !mikedanielandassociates.com