Monthly Archives: December 2014

Four Peaks Brewery is exactly the kind of small business that sustains Arizona’s economy. Over the course of nearly 20 years, the Tempe-based brewery and restaurant has grown from a tiny establishment next to Arizona State University into a flourishing enterprise. It has continued to grow, expand, and now employs well over 200 people. In fact, Four Peaks brewery is a small part of a larger craft beer explosion that is transforming the beer industry:

Yet their success might become a barrier to future growth if the Arizona legislature does not intervene. Under current law, microbrewers like Four Peaks are currently capped at producing 40,000 barrels of beer per year and have a limit on their distribution.  Should they cross that 40,000 threshold – which Four Peaks is on the verge of doing this year– they would have to apply to be a beer producer, which cannot operate restaurants outside of their main brewery.  Four Peaks currently has two such restaurants, which means they must soon either cap their production, or shut down those restaurants and put hundreds of people out of work.

Some might be asking why such an arbitrary and seemingly bizarre law even exists, especially one that does not appear to serve a useful public purpose?  The reason is as simple as it is obvious: the entrenched beer wholesalers that helped write (and benefit from) the current regulations stand opposed to any changes that threaten their market share.

Of course, they will never admit that this is the basis of their opposition. Instead, we will hear lengthy diatribes about how the “3 tier” model (a prohibition era relic) that has been in effect for over 80 years has been great for the beer industry and any changes to the current model could endanger the public and lead to catastrophic unintended consequences. You might even hear a few make the claim that the current law is in place to “protect” small businesses like Four Peaks.

Recognizing the clout of the multibillion dollar beer wholesalers, the microbreweries are going to seek compromise legislation that allows for a grandfathering of existing restaurants and a modification of the limits for self-distribution should a brewer cross the 40,000 barrel cap.  By all accounts, the beer establishment is having none of it, and will likely push their own bill to keep Four Peaks and other Arizona micro-breweries from impeding on their bottom line.

For advocates of free enterprise, this is an important fight.  In a free market, a local company that makes a more popular beer than a national brand should flourish and be rewarded, not be stopped in their tracks by protectionist laws and an army of high-powered lobbyists.  Our legislature needs to understand that our economy depends on more competition, not less, and that small businesses should never have a “cap” on their growth and employment – especially not at the behest of would-be competitors.



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The Arizona Free Enterprise Club is a free market policy and advocacy group dedicated to promoting a strong and vibrant Arizona economy.
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