Data Highlight: Beer Money Buys Protection from Competition

Mar 07, 2017

On Sunday, The Charlotte Observer published an unusual story about N.C. legislative leaders stifling competition, contrary to their call to liberate business from government regulation.

 

Craft brewers in cities across the state want to expand production, but a state law requires them to market their product through established beer distributors if they produce more than 25,000 barrels a year.  The craft brewers want to raise the cap and have the option to sell without a middleman, but as the story says, “a big campaign donor is getting in the way.”

Democracy North Carolina analyzed the campaign money donated by North Carolina beer wholesalers for the Observer. The total during 2013-2016 is astonishing – nearly $1.5 million paid to statewide and legislative campaigns and political party committees, which rivals the campaign spending of the insurance and banking industries.

 

It’s enough to warp principles and change votes. “Money talks,” Rep. Chuck McGrady, a Hendersonville Republican told the Observer. He said the state legislators he recruited in 2015 to co-sponsor a bill to help craft brewers later told him they needed to pull their names from the legislation because of pressure from the beer distributors.

“The $1.5 million is essentially protection money paid to politicians for favorable treatment, not unlike the money bootleggers paid to law officers to protect their industry back in the day,” said Bob Hall of Democracy North Carolina.  “The beer wholesalers may call it ‘goodwill money’ but it comes with a lot of muscle when they face a fight in the legislature.”

Here are the details of the campaign money:

  • In the four-year period, 2013 through 2016, the NC Beer & Wine Wholesalers PAC donated $523,000 to statewide and legislative candidates and party committees. That ranks the PAC among the top dozen in the state for political donations.
  • Beer wholesalers and their immediate family members donated even more money – $941,000 to state-level candidates and parties. This donations come from about 40 families who dominate beer distribution in North Carolina.
  • The top recipient for 2013-2016 is Senate President Pro Tem Phil Berger (R-Rockingham) who received an eye-popping $172,000 from individual wholesalers, plus $20,200 from the NC Beer & Wine Wholesalers PAC, for a total of $192,200.
  • House Speaker Tim Moore (R-Cleveland) received about half as much as Sen. Berger - $80,766 from individuals, plus $17,700 from the PAC.  The total of $98,466 ranks him as the second largest recipient of Big Beer money.
  • During the 2013-2016 period, Gov. Pat McCrory received about $97,000 and challenger Roy Cooper took in about $73,000 from individual wholesalers and their PAC.
  • Rep. Jamie Boles (R-Moore), co-chair of the House ABC Committee, received $21,450 from individual beer wholesalers or about one-fifth of all the money he raised from individuals in his 2013-14 and 2015-16 campaigns.  In addition, he received $11,000 from the beer wholesalers PAC, for total receipts of $32,450.
  • By contrast, Rep. Chuck McGrady (R-Henderson), the other co-chair of the House ABC Committee this year and a supporter of craft brewers, received no money from the individual wholesalers and just $1,750 from the NC Beer & Wine Wholesalers PAC.
  • Other top recipients of Big Beer campaign money for 2013-2016 include: Rep. John Bell (R-Wayne), House Majority Leader, $25,600; Rep. David Lewis (R-Harnett), House Rules Chair, $25,050; Rep. Susan Martin (R-Wilson), co-chair of the House Commerce Committee, $24,300; Sen. Harry Brown (R-Onslow), Senate Majority Leader, $19,750; Sen. Trudy Wade (R-Guilford), co-chair of the Senate Commerce Committee, $19,750; Sen. Wesley Meredith (R-Cumberland), co-chair the Senate Commerce Committee, $16,500.