On the Beer Bills Moving Through the Texas Senate

Yesterday, the Texas Senate Committee on Business & Commerce passed Senate bills 515-518 and 639 that stand to change the way beer is sold in Texas. Taken together, these bills will allow brewpubs to package up to 10,000 barrels annually for retail sale, breweries to sell beer directly to consumers for on-premises consumption and clarify the financial arrangements that breweries are allowed to make with distributors. The one thing the bills do not permit is for breweries to sell directly to consumers for off-site consumption, aka "dock sales." To make sense of what these bills mean, Eater reached out to Leslie Sprague, who handles media relations for consumer advocacy group Open the Taps, and Brock Wagner, founder of local brewery Saint Arnold.

In response to concerns that these bills mean dock sales are dead for this legislative session, Sprague writes that "this is still a huge focus for us. There are several ways in which to get this accomplished ... our lobbyists are hard at work to get to-go sales for consumers this session." Her overall reaction to yesterday's development is "We set out two years ago to better the craft beer landscape for consumers, and while the bills aren't perfect, we believe we have taken a great step forward."

Here's Wagner's entire statement:

The bills, SB 515-518 and 639, when taken as a whole, are a significant improvement in the environment for craft breweries in Texas. The net effect is strongly positive. The negative was when SB 639 was filed a few weeks ago, it was a major step backwards. It addressed many topics, most of which have been significantly changed. The one craft breweries were most concerned with dealt with breweries selling their territorial rights to distributors. As it currently stands, the TABC is not clear on the legality of these transactions. They have occurred, but nobody really wants to talk publicly about it because it is a gray area of the law. The TABC asked for clarification from the legislature. As a guild, we argued with all resources we had at our disposal that it should be codified as legal. We lost that argument and the legislation that is moving forward declares the breweries sale of territorial rights is illegal. What we did get out of these negotiations however was the support from distributor groups (both the Beer Alliance, who was already supporting SB 515-518, and the WBDT who had been opposing these bills) for our bills, SB 515-518. Also, SB 639 codifies as legal payments between distributors and breweries for several other activities which can be of benefit to craft breweries. SB 515-518 are now linked to SB 639. If SB 639 doesn't pass, SB 515-518 will die so there is no picking-and-choosing.

The value of SB 515-518, as seen in other states with rights for on premise sales and for brewpubs to distribute, is enormous and actually far outweighs any negatives associated with SB 639. 20 years from now, everybody in the Texas craft brewing industry will see this package as a huge positive. The problem is that while the package of bills is a positive for all craft breweries individually, it does not affect all breweries equally. Breweries that have recently opened and are currently self-distributing may see the negatives more clearly than the positives at the moment. We (Saint Arnold) have already assigned all of our distribution rights so SB 639 has less of an effect on us. But it is important for all craft breweries to take the long term view on this. It is a net positive.

· Saint Arnold [Official Site]
· Open the Taps [Official Site]
· Beer Legislation Passes Committee on Path to Senate [Houston Chronicle]