Brewery and a Distribution Company.

[criniit]

So me and a partner are working through the feasibility of setting up shop in SC/NC, both states are 3 tier system. What I was wondering, is what if we started a brewery, as well as a complete seperate company that was a distributor. Could we then distribute with our distribution company even in a tier 3 system? Because technically it fits into the system, brewery selling to our distribution company..Is this illegal? thanks in advance.

[Neckbone]

I'm in the planning phase of a microbrewery in SC, as well. Good luck with your endeavour.

I'm not an atty, but the way I interpreted the law in SC is that you cannot be an owner, be on the board, or have anything to do with a microbrewery and a distributor. It seems, however, that you could start and own the brewery, and your friend could start and own the distributor.

[criniit]

Have you decided what you are planning on doing about distribution?

[Neckbone]

I fully plan on researching them a good bit more, and shopping around a bit, but it seems a few of the micros are using Capital Wine and Bev for central SC, and not sure about upstate or coastal.

Where are you looking at setting up shop?

[criniit]

Charleston/Myrtle Beach are...you?

[Neckbone]

Columbia. Hopefully starting to brew in 10-12 months.

[criniit]

Yeah, were aiming for Oct. 1 2008 Opening

[Brewinfo]

I can see where this could be a tangled web with the way NC and SC's laws are written. I know the sponsor of this section, World Class Beverages, is recruiting distributors to their program across the US. I'd talk to them and see if they can give you some advice. According to their website they aren't currently in those regions so perhaps you can join their program and save yourself a lot of headaches. (No, I don't work for WCB)

[tsewong73]

I brewed at a brewery in Virginia. The brewery's owner worked things in such a way that he owned the brewery, but I think someone else owned the distribution company - on paper anyway. It was managed by someone other than the owner/manager of the brewery, but the owner/manager maintained control over the distribution activities. You can do it, but it'll take some legal wrangling to do it correctly and not raise eyebrows. The post by Neckbone seems to be workable under this model. The brewery I worked for actually sold the kegs to the distributor and, of course, the distributor sold the kegs to retail accounts. The distributor company worked out of the brewery's warehouse, so it would be feasible to occupy the same grounds as long as you do some fancy stuff with the lease. The way it was in Virginia (here in PA, too) your brewery can't even own the building that the distributor works from, but if you're renting the space from a third party, you might be able to work the lease and split the space so that the building owner actually leases two spaces in the same building to two separate companies.

[Logan]

Stone Brewing is a brewer, pub/restaurant owner, and distributor of domestic and import beers. Russian River is soon to do the same.

Different corporations can be set up or on a small scale the distribution can be put in one's spouse, parents, or associates names, it seems.

Similarly, I know of a distributor who technically can't also own a pub, but he may proceed putting it in his wife's name. At least in CA, where there's a will there's a way!

[frigatebay]

I do the same thing now, contract brew my own brand and distribute several others. feel free to email at sales@landmarkbrewing.com and I might be able to answer some questions for you.

K

[World Class Bev]

Stone certainly is a distributor and brewer, but in their state that is legal. In many states, it is very much prohibited to do both brewing and distribution. Of course, all states are three tiered states, but laws vary by state as to how alcohol is controlled so you really need to find out the answer for any particular state that you want to operate in.

And while World Class Beverages is not in either Carolina, I would be happy to talk to you via email about this if you are still interested. I'm at bmack@worldclassbeverages.com.