SC Beer Festivals Face New Challenges from an Old Law

While beer festivals have become a popular way for breweries to introduce people to new and unique beers while providing a social gathering for the community, increased enforcement of a 20 year old law may change the way beer festivals operate.

South Carolina has a law on the books which prevents producers of alcohol from selling directly to retailers, such as your favorite bar, requiring a middle man or wholesaler for distribution. This requirement prevents breweries big and small from cutting special deals with bars to sell their beer only, providing consumers with a greater variety. Additionally, brewers are prohibited from donating alcohol for nonprofit events.

The way this impacts beer festivals is that there is no wholesaler, meaning brewers are providing their goods directly to the retailer, in this case the festival. This is considered a violation of the law, and SLED is enforcing it with heavy penalties.

While the law has been in place for 20 years, law agencies haven’t always been able to effectively enforce it until recently. When Mark Keel became chief of SLED in 2011, the alcohol unit was comprised of only two agents. Since then, Keel has increased the size of the unit to 30 agents, resulting in a 1400 percent increase. With increased manpower has come increased enforcement.

When asked how manufacturers could legally serve their products at festivals throughout the state, a spokesperson for the S.C. Department of Revenue stated, “A brewer could be next to their beer stand and educating the customers about their products, but cannot provide bartending services off of their premises.” While brewers previously used festivals as an opportunity for self-promotion, enforcement of the Alcoholic Beverage Control (ABC) Act could make festivals less attractive to producers.