20Contract brewing has become a hot topic as craft brewing has grown exponentially over the past decade. A number of smaller craft brewers just simply do not have the resources or space to buy top of the line brewing equipment (or the brewing equipment necessary to make extremely large quantities of beer). That being the case, in a number of states, contract brewing has become a prominent alternative. Contract brewing allows a smaller craft brewer to rent out space and equipment from a larger brewer (craft or otherwise) in order to produce larger quantities of their beer for distribution and consumption. It also allows a craft brewer located on the other side of the country to temporarily rent out a brewery for production of a seasonal beer for more regional distribution (rather than nationwide), thus reducing distribution costs.
Here is the thing about contract brewing in North Carolina – it IS NOT LEGAL (at least, not currently), so DO NOT DO IT HERE (yet). Under North Carolina Alcoholic Beverages Control Laws, contract winemaking is perfectly legal (see N.C.G.S. § 18B-1101(6a)). This section explicitly allows for contract winemaking for those that have obtained an unfortified winery permit. This means, a winery can contract out its equipment and space to any winemaker that wants to come in. A clever brewer will probably argue- “well, the law does not explicitly make contract brewing illegal, so why can’t I do it?” The ABC Laws in North Carolina may not explicitly make contract brewing illegal in so many words, however, the laws do explicitly make it unlawful “to manufacture, sell, transport, import, deliver, furnish, purchase, consume, or possess any alcoholic beverages except as authorized by the ABC Law.” N.C.G.S. § 18B-102(a) (emphasis added).
It is pretty straightforward and simple: contract brewing is not explicitly authorized by the ABC Laws in North Carolina, and therefore contract brewing is illegal in North Carolina. Why are the winemakers able to do it? Simple- the winemakers in North Carolina have been organized as a group much longer than breweries in North Carolina have been, and they got together, lobbied the North Carolina legislature, and got § 18B-1101(6a) added to the laws, making contract winemaking explicitly legal in North Carolina. They apparently did not think to look out for their beer brewing friends here in this state at the same time.
Now that craft breweries have a voice in North Carolina (the North Carolina Craft Brewers Guild) with a lobbyist, I expect that a change in this law will catch breweries in North Carolina up to wineries, sooner rather than later. Until then, however, do not engage in contract brewing in North Carolina.
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