Omnivore - Georgia Department of Revenue tightens SB 63 regulations

• Illustration by Wes Duvall
• RED TAPE: Georgia Department of Revenue policy bulletin tightens regulations established by SB 63

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Update (9/30/15): Asked for more information about the process behind this policy bulletin, Georgia Department of Revenue spokesman William Gaston issued the following statement to Creative Loafing: “The department utilizes a standard format for its policy bulletins, but the process for creating content may vary depending on the subject matter... A policy bulletin is intended to provide guidance to the public and serves as the Department’s position on the law.”

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Asked to clarify if Georgia’s alcohol wholesalers advised on the bulletin, Gaston responded, “At this time, the Department has no further comment.”
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When I interviewed the Creature Comforts Brewing Co. team for BeerAdvocate recently, the main topic on the Athens brewery’s mind seemed to be growth—and lots of it. In fact, brewmaster Adam Beauchamp told me that Creature is already planning its second brewery location. And that if the Peach State doesn’t get its act together, that location may not be in Georgia.

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“As much as we’d like to keep the new facility close to home, there is a strong pull from other states that have less restrictive laws and regulations,” he told me. “If Georgia continues to push back against our budding industry, it will lose out to our neighboring states.”

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His comments caused a bit of a stir in the local beer community, but he’s not the only brewer in the state who feels this way. Despite the fact that many Georgia beer lovers consider the signing into law of Senate Bill 63 on July 1 (which allows breweries to sell tours with free “souvenir” beer that attendees can take home) a decent first step, the fact remains that Georgia is one of the few states that doesn’t allow its breweries to sell beer directly to customers.

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And now, following a Georgia Department of Revenue policy bulletin that surfaced over the weekend, the almost-three-month-old rules established by SB 63 have been tightened up a bit. The whole document is worth a read, but the third FAQ in particular stands to notably alter how Georgia breweries have been conducting “souvenir” tours since July 1:

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(Q3) Can a manufacturer charge varying fees for facility tours?
Yes. However, the basis for varying fees may not be due to differences in the volume or market value of alcohol provided to tour attendees. Fees may vary based on the furnishing of non-alcoholic promotional items, the day of the week, live entertainment, etc. However, a manufacturer who furnishes beverage alcohol in the course of a tour must not vary prices based on the change in relative market value or volume of the alcoholic beverages furnished.

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For example, a manufacturer must charge the same rate for a tour where one tour attendee elects to sample free beverage alcohol during a tour and the second attendee elects to sample free beverage alcohol and receive a free beverage alcohol souvenir.

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Since SB 63 was signed into law, breweries have taken different approaches to these so-called souvenir tours. For the to-go portion specifically, some breweries have been offering options ($10 for a one bottle souvenir tour, $20 for a two-bottle, etc.). Others have offered a choose-your-own-adventure menu of sorts, where a consumer might do the on-premise tour (36 ounces or less of draft beer directly from the brewery, along with a tour of the production facility) followed by a “souvenir” to-go tour (72 ounces or less of packaged beer — growlers, crowlers, bottles, or cans — that they can take home). Others still, including Creature Comforts, have experimented with bottle releases where consumers show up for a quick tour, then take a rare or brewery-only release home with them as a souvenir.

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The language of the DOR bulletin, depending on how it’s enforced, could render these practices unlawful. In other words, Georgia craft breweries will, once again, have to overhaul their operations in order to comply with regulations that could ultimately cause them to lose money.

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The Georgia Craft Brewers Guild’s response to the bulletin came quickly.

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“Throughout the SB 63 process, from the bill’s introduction in January to its enactment in July, a brewer’s right to charge variable prices for brewery tours by whatever basis they saw fit was clear and unambiguous,” GCBG executive director Nancy Palmer says. “It is egregious that the Department of Revenue has waited until now—after the conclusion of months of debate on this law—to quietly, and without open comment, issue a bulletin that flies in the face of the consensus understanding of the law and the known legislative intent. Furthermore, it contradicts the rules that the DOR itself set forth and under which breweries in Georgia have been operating for the last 3 months. The timing of this bulletin smacks of political jockeying and underscores that breweries in Georgia need clear and direct retail sales without equivocation.”

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Palmer says that, on June 26, which was between the time SB 63 passed both chambers and was signed into law by Governor Deal, the DOR “issued exhaustive rules and regulations...after one month of open debate and comment from members of the industry.” Palmer says that it was these regulations that breweries then used for guidance after SB 63 became law.

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“Georgia’s small breweries have invested hundreds of thousands of dollars of capital, hired new employees, and overhauled their tasting rooms under direct assurances from the Department of Revenue that a tasting room offering multiple tour types, including to-go tours, was acceptable and viable,” she says. “This bulletin is in antithesis to that understanding. Our small brewers, yet again, have had the rug pulled out from underneath them. It is more clear now than ever before that Georgia’s brewers need absolute direct sales and other basic rights enjoyed by breweries around the country.”

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Many consumers are suggesting that Georgia’s beer wholesalers are to blame for the sudden change. Questions sent to the DOR for clarification and a message sent to the Georgia Beer Wholesalers Association for comment were not immediately answered, but we’ll update this story when either responds.

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Meanwhile, another Georgia brewer is lamenting the fact that he’s building out another space here.

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“These new rules mean we’ll always have stuff that we’re including with a tour package for either below retail (possibly pissing off stores), or that we’ll have to charge less (which screws us),” Orpheus brewmaster Jason Pellett wrote on Reddit. “Almost daily I wonder if I’m stupid for starting to plan our second facility in GA.”