North Carolina loves its beer but new legislation under the Food and Drug Administration (FDA) may drive prices up and limit variety.
The FDA’s Food Safety Modernization Act (FSMA) is a sweeping reform of food safety laws that was signed into law by President Obama in 2011. The FSMA’s aim is to make food regulation more proactive, to shift the focus of federal regulators from responding to contamination to preventing it. The FSMA has given the FDA new authorities to regulate the way foods are grown, harvested, and processed. The law grants FDA a number of new powers, including mandatory recall authority, which the agency has sought for many years. It goes into effect next December.
Sounds harmless enough. But what makes these new regulations so cumbersome for craft brewers is that they require brewers to provide nutrition information for every brew on tap at a restaurant or grocery store with 20 or more locations. That poses a tremendous problem for North Carolina’s 132 craft breweries which are already hampered by high excise taxes and low distribution limits. Providing the new required information requires extensive lab testing that costs more than $600 (per beer) and takes weeks. Testing can be done in-house, but equipment required to perform the tests costs more than $100,000. Craft breweries typically make several varieties of beer and rotate their selections frequently, making labeling especially burdensome.
The FDA attempted to more deeply regulate craft brewing before. Last year, it attempted to regulate the sale of spent grain from breweries to local farms, a centuries-old practice. It relented after brewers protested.
The FSMA is something all breweries, bottle shops, and especially brewpubs should keep an eye on over the next few years as the FDA continues to increase quality control measures. The FSMA might be reassuring news for consumers, but it's potentially worrisome news for the craft brew industry.