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How Jimmy Carter Made Craft Brewing What It Is Today

Greene’s Corner
Winter

Craft brewing continues to grow and has been growing for some time. But why? Why has there been such growth in craft beer since the early 1980s? Why didn’t it start in say, 1933 when beer was legalized, leading up to the end of Prohibition? That would seem like an opportune time. The answer is more complicated. Let’s take a look at the

Some folks over at Reddit, have pulled in some data from a study. Looks like we can all thank…Jimmy Carter! Yep, the current huge growth in craft brewing can be traced back to the old one-termer. In 1979 Jimmy Carter signed the Cranston Act. This act deregulated the beer market. It allowed home brewers to brew up to 200 gallons a year. Because so many craft brewers began as home brewers.

“After Prohibition ended, the Federal Alcohol Administration Act of 1935 laid out a new set of liquor laws. Home winemaking for family use was granted a tax exemption; home brewing was not. If you were making any amount of beer, you had to obtain a permit and comply with a long list of regulations.”  Prior to the Cranston Act, brewing beer at home, or in small volumes anywhere, was hard to do because of federal regulations.

Here’s an excerpt from a peer reviewed article explaining the history of the craft beer boom and how deregulation played into it.

Changes in government policy also benefited micro brewers. First, the legalization of home brewing in February of [1979] stimulated entry, since most early micro brewers began as home brewers. Second, states began lifting prohibitions against brewpubs in the early 1980s. Brewpubs were legal in only six states in 1984; Mississippi was the last state to legalize brewpubs in 1999. Third, the government granted a tax break to smaller brewers in February 1977. According to the new law, brewers with annual sales of less than 2 million barrels paid a federal excise tax rate of $7.00 per barrel on the first 60,000 barrels sold and $9.00 per barrel on additional sales. Brewers with more than 2 million barrels in sales paid an excise tax rate of $9.00 on every barrel sold. In 1991, the tax rate rose to $18 per barrel, but brewers with annual sales of less than 2 million barrels continued to pay only $7.00 per barrel on the first 60,000 barrels sold annually. This benefited the specialty sector, as all micro breweries and brewpubs have annual sales of less than 60,000 barrels and all of the larger specialty brewers have annual sales of less than 2 million barrels.

Take a look at the following graph. It shows a very clear historical correlation from the time the Cranston Act was signed and the increase in craft breweries in the US.

US_Brewery_Count_Biodesic-thumb-400x339

That’s the number of large and small-scale breweries in the US. You can see how the large brewers continued to consolidate and grow and absorb more and more market share right up to the point where Carter deregulated the industry.

Thinking of hitting the Tap Trail today in your BTT Gear? Looks like we gave you another reason to lift your pint in appreciation.

About Scott Pelton

Scott Pelton
I'm Co-Owner of Bellingham Tap Trail, the Sales & Marketing Guru and the Editor of the Tap Trail Website. Let's have a pint! Email me at scott@taptrail.com.

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