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Barrels of beer on the law
House Bill 660 proposes brewpubs can also operate as microbreweries in Texas
San Antonians are leading the charge to bring a nonsensical and economy-stultifying state beer law to a close.
State Rep. Mike Villarreal, D-San Antonio, introduced House Bill 660 late last week proposing that brewpubs also be allowed to operate as microbreweries. It would allow brewpubs to sell up to 5,000 barrels of beer a year at the brewpub itself and up to 75,000 barrels of beer to places like restaurants, bars, and supermarkets.
The original 1993 state law allowing brewpubs was watered down to light-beer consistency, preventing brewpubs from selling anywhere except on site. If you live on the Northside and want a local Blue Star Brewing Co. beer without driving down to King William, tough luck. Want to have Uncle Billyís beer from that Austin brewpub at a pub in Schertz? No dice.
Microbreweries have the opposite problem. They can sell off-premise, but canít sell a drop at the brewery itself. They give away loads of beer on tours, hoping to create loyalty. Other states have successfully merged these into one cohesive law, allowing microbreweries to have brewpubs and brewpubs to sprout into microbreweries. Rogue in Oregon, Dogfish Head in Delaware, and Goose Island in Chicago are three successful examples. States with these laws have thriving craft-beer industries, while in Texas, the second largest consumer of beer in the country, homegrown craft beer represents less than one percent of consumption.
Beer distributors provide a great deal of value in what is known as the three-tier system. They deliver beers efficiently to huge numbers of retailers, eateries, and bars. But current law is a moat used by the distributor lobby to protect their vast domain and the dollars that come with being a state-mandated middleman. Any attempt to fish in that moat is viewed as bringing down the kingdom. On the contrary, many brewpubs want to grow up and will need a distributor.
The proposed law, largely drafted by Scott Metzger, economist and Freetail Brewing Co. owner, and Blue Starís Joey Villarreal, would allow for self-distribution up to 10,000 barrels. But microbreweries, which now can self-distribute up to a certain point, generally want out of the delivery business more quickly. Alamo Beer owner Eugene Simor, for example, jumped at the chance to work with distributor Ben E. Keith before hitting the 3,000-barrel mark.
Metzger has created a blog at brewednotbattered.wordpress.com to follow the bill and more details will be at beeracrosstexas.com.
The bill is pro-small business, pro-distributor, and would likely create additional tax revenue and jobs. It deserves a better hearing than what lawmakers are likely to give it.
Travis E. Poling writes about beer weekly for the Current and is author of Beer Across Texas: A Guide to Brews and Brewmasters of the Lone Star State. Please send beer news and event information two weeks in advance to firstname.lastname@example.org.