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WHITSETT — A brewing fight over North Carolina’s beer distribution laws has its roots in Guilford County, with executives from two local businesses duking it out behind the scenes at the General Assembly.

Red Oak Brewery has stepped up its lobbying efforts to convince legislators that beer makers should be able to distribute up to 60,000 31-gallon barrels without being required to go through a wholesale distributor.

But wholesalers such as Greensboro’s R.H. Barringer Distributing say the General Assembly should hold fast to the current 25,000-barrel limit or lower it to avoid possible conflicts with federal laws.

“Our concern is that someone who has a Red Oak could have a poor Red Oak experience,” said Eric Hice, vice president of operations with the company. Red Oak’s beer is neither filtered nor pasteurized, processes that help brews last longer whether in a bottle or a keg.

“If it’s not handled right, we have real taste problems,” said Bill Sherrill, Red Oak’s owner. In particular, Sherrill said, it’s critical the beer is refrigerated from the time it’s brewed until it reaches a customer.

Beer distributors, Sherrill argues, send usually unrefrigerated trucks out with dozens of kegs from different brands and can’t ensure beer from small brewers is handled or marketed properly.

But as Mark Craig, president of R.H. Barringer, walks between walls of beer cases stacked 18 feet high in the company’s warehouse, he points to brands from around the country and overseas that his company sells in North Carolina.

“Longboard comes from Hawaii,” Craig said, pointing out a few cases shipped from the Kona Brewing Co. “It’s fine; it’s taken care of.”

Wholesalers such as Barringer came about at the end of prohibition, created by state and federal laws to better collect taxes and temper the flow of alcohol that had led to a ban on drinking in the first place.

Craig said he doesn’t begrudge small brewers a chance to self-distribute and bristles when asked if he’s merely defending his company’s government-sanctioned turf when he resists changing the law.

“When you have one guy who does everything, how are we assured that taxes are collected correctly, how are we assured that the product is handled correctly not only from a quality standpoint ... but for a whole host of regulatory issues?” he asked.

Red Oak called out R.H. Barringer by name in a letter it sent to legislators, arguing that beer wholesalers were too big to care about small brewers. Craig takes exception to the letter’s contents, particularly targeting as “wildly inaccurate” an estimate of what his company paid to acquire another beer distributor.

Elsewhere in his warehouse are cases of beer from Red Hook, a Seattle brewer that doesn’t pasteurize its beers, and kegs from Natty Greene’s, a Greensboro brewery that recently signed up with the wholesaler.

Barringer’s warehouse is refrigerated from the sub-40 degree cooler where kegs are stored to the sub-70 degree lanes where distribution trucks roll in to be loaded.

“Duke Power loves us,” Craig joked as air conditioners growled overhead.

Jamie Bartholomaus, an owner and brew master at Foothills Brewing Co. in Winston-Salem, agrees philosophically with Red Oak that breweries should be able to distribute as much of their own product as they want.

“We would rather go to a distributor on our own terms when we feel we’re ready rather than being forced to go with one,” Bartholomaus said.

His company still self-distributes locally but has just struck deals with wholesalers in South Carolina, Charlotte and Wilmington to carry its brands. Those distribution deals, Bartholomaus said, come with concerns over cash flow, product handling and marketing.

Bartholomaus is among those organizing the North Carolina Brewers Guild that will, among other things, speak out on behalf of small brewers. The self-distribution issue has been a major topic among members of the nascent group.

His own take, Bartholomaus said, is the distribution fight should wait. Small brewers and wholesalers, he said, would be better off uniting against a possible increase in the state’s excise tax this year than by warring among themselves.

But Hice said Red Oak has little choice but to push for a change. The company’s production is “in the low double digits,” he said, making about 12,000 barrels of beer a year. That number will shoot up in the next two years, he said, after Red Oak opens a bottling line.

And, Sherrill said, increasing the amount of beer the company can self-distribute would allow Red Oak to pursue a restaurant, hotel and retail complex it wants to build around its brewery. It would include a combination beer hall and art museum, featuring paintings that Sherrill has collected.

North Carolina last raised the self-distribution cap in 2003. Red Oak was then pushing for a 100,000-barrel ceiling but met stiff resistance from wholesalers, unionized drivers and larger brewers such as Miller, which has a plant in Eden that brews millions of barrels per year. Since then, Sherrill has kept lobbying to raise the limit further.

It should be noted that the N.C. Beer and Wine Wholesalers Association, the state trade group for businesses like Craig’s, is a force to be reckoned with in Raleigh. Not only does the group’s PAC and individual members give thousands of dollars in campaign donations, it has no fewer than three lobbyists working on its behalf this session of the General Assembly.

On the flip side, Sherrill is an active political donor, and lawmakers say he and a lawyer for Red Oak have been persistent lobbyists on their cause’s behalf.

Still, bills to raise the self-distribution limit filed since 2003 by former state Sen. Kay Hagan and Rep. Pricey Harrison, a Greensboro Democrat, have made little progress.

“This notion that everything has to go through a distributor seems anti-competitive to me,” Harrison said. “I just don’t understand why a fellow can’t strike out on his own and distribute his own beer.”

Harrison said she would advocate for the bill if one comes to the House from the Senate.

Sen. Katie Dorsett, a Greensboro Democrat, said she “is leaning toward” introducing such a bill by the end of this month.

“If we really want to promote small business, we have to give them room to grow,” Dorsett said.

But Sen. Don Vaughan, also a Greensboro Democrat, said he would rather see Red Oak and other small brewers come to some accord with the wholesalers. In particular, Vaughan said, he worried that crafting a bill to allow Red Oak to pursue its plans could unintentionally hurt other companies such as R.H. Barringer.

“I don’t want to do it to the detriment of another industry,” he said.

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com