The rapid expansion of the craft beer industry over the last 25 years in the US required state-level policy changes which have largely been ignored. Popular business models like brewpubs and taprooms provide significantly greater profitability by selling directly to consumers, but both were explicitly or practically illegal in all 50 states prior to 1982. Efforts by craft brewers to legalize direct sales were complicated by powerful incumbents supporting the status quo, and yet forty years later over 3,418 brewpubs and 3,838 taprooms operate in the US. This project explores this regulatory and market transformation through a historical, comparative analysis of six states with a similar range of attributes but very different regulatory and industry outcomes.
Existing theories suggest that coordinated, collective actions via a trade association may explain the success of craft breweries seeking regulatory changes. Using a combination of interviews, fieldwork, and unique archival data on both successful and unsuccessful policy change efforts, the present study argues that collective action and cohesion via a trade association is often insufficient to change firmly institutionalized regulations. Each state in this study had a functioning trade association representing most craft breweries, but sustained regulatory influence was observed only in states where a full-time executive director brokered a long-term alliance with a state-wide interest group outside the industry. This alliance led to beneficial changes in regulations for craft brewers but also limiting concessions that aligned with the goals of the alliance partner. Concessions to promote other state interests, such as agriculture or tourism, enabled policy change and reoriented the state-level trajectory of alcohol regulations.