Alcohol formula

Office Space: a metaphor for Georgia’s alcohol regulations

Marc Hyden is the Director of State Government Affairs at the R Street Institute. You can follow him on Twitter at @marc_hyden.

Following a recent conversation about Georgia’s bizarre and outdated liquor laws, I was reminded of a scene from the cult comedy “Office Space.”

In the film, two consultants – the Bobs – were looking to lay off unnecessary workers at a tech company called Initech, and they interviewed different employees, including Tom.

When asked what his job at Initech entails, Tom replies, “Listen, I already told you. I take care of the [expletive] customers so engineers don’t have to! I have people skills! I’m good at dealing with people! Can’t you understand that? ! What is the [expletive] is wrong with you people?!”

Tom was little more than an intermediary between engineers and customers – an extra cog created by his bosses – and he knew it. His responses left the Bobs completely in awe.

While the scene was meant to be lighthearted, it’s reminiscent of Georgia’s three-tier system of alcohol regulation. It’s an outdated remnant that dates back to the days of Prohibition.

In large part, it imposes restrictions “so that no beer producer can sell beer to a customer without first delivering it to a wholesaler, who then delivers it to a retailer.

Similar structures are in place for wine and distilled spirits in Georgia,” according to 11 Alive News.

The notion of the three-tier system is obviously stupid. In a few other industries, the government would prohibit producers/manufacturers from distributing their products to retailers or selling directly to consumers, instead forcing them to rely on intermediaries like Tom from Initech.

But that’s the system we have. Breweries cannot sell their products on a large scale directly to just anyone. On the contrary, by law, they must use a wholesaler to fulfill this role.

Fortunately, as Georgia’s craft beer, wine and distillery industries have grown, some exceptions to the three-tier system have been adopted, but they remain too limited and restrictive.

As it stands, no one can purchase more than 288 ounces of beer for off-site consumption per day at a brewery, which equates to 24 12-ounce bottles, essentially a case of beer. It’s incredibly strict. In fact, the traditionally sober Alabama allows three times that level, while other states have no limit.

There are good reasons to scrap the daily limit for small breweries, as proposed by Senator Chuck Hufstetler’s bipartisan bill – SB 420. While 288 ounces might sound like a lot of beer, it isn’t if you only buy beer every two months. or buy it for a gathering, reception or family reunion.

Indeed, I think most would agree that you might need a lot more than 24 beers to survive a family reunion. Also, why did the legislator set a limit of 288 ounces, instead of 388, 488 or any other number? No one seems to be able to give me a good answer.

Many Georgian breweries are small businesses struggling to stay afloat, and regulations that limit their sales are understandably hurting their bottom line. This may indicate why Georgia has one of the lowest numbers of breweries per capita in the country. Eliminating the daily limit would expand a small but significant exception to the three-tier system for fledgling businesses that would otherwise have to rely on wholesalers and pay them for the privilege of getting their products into the hands of consumers.

But relying on wholesalers has other drawbacks. Adding a middleman – wholesalers – to the equation weighs down breweries and drives up the price of alcoholic beverages – a cost that is passed on to customers.

None of this is meant to be an affront to liquor wholesalers. They play an important role in our economy, especially for large producers who can afford their services, but extending the rigid regulation of the three-tier system to small breweries to limit their direct sales to consumers is bad for business.

If breweries don’t want to sell more than one case of beer per customer per day and instead favor off-site sales via wholesalers for the bulk of their sales, so be it. However, the government should not force them to take this path to their detriment.

On the contrary, Georgians should want to see small businesses like breweries succeed and thrive across the state. The SB 420 could help make this a reality without significantly affecting wholesalers’ bottom line, as on-site brewery sales for off-site consumption represent a relatively small share of the market.

While it would be up to lawmakers to rethink the state’s liquor regulatory framework, if the Bobs checked out the effects of the three-tier system on small Georgia breweries, it’s easy to imagine them asking wholesalers: what exactly are you doing here? They might respond, “Listen, I already told you. I take care of the [expletive] retailers so breweries don’t have to! I have detailing skills! I’m good at dealing with retailers! Can’t you understand that?!”

Respectfully, no, I can’t.

Marc Hyden is the Director of State Government Affairs at the R Street Institute. You can follow him on Twitter at @marc_hyden.