The Political Economy of Craft Beer in North Carolina (and Beyond)

Christopher Koopman, Adam C. Smith

Pages: 76 – 98  |  First Published: August 2018

Abstract

This paper pulls together several recent threads of policy analysis on the craft-beer industry, with specific reference to the ongoing political conflicts in North Carolina between brewers and distributors. Drawing upon previous research, we explore the political-economy questions pertinent to the discussion on how regulation impacts the craft-brewing industry. Specifically, we explore (1) how the three-tier system sets up wholesalers as monopoly enforcers of alcohol distribution, (2) how this arrangement has impacted the emergence of the craft-beer industry, (3) what arguments are used to justify the status quo, and (4) why, in short, rent seeking is not a necessary ingredient of craft brewing. We conclude by providing recommendations for policy makers looking to remove barriers to entry in this market.

Read Article