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LegeLand: Brew the Looking Glass

If Texas' liquor laws look good, you must be wearing beer goggles

By Lee Nichols, Fri., Feb. 25, 2011

LegeLand: Brew the Looking Glass
Photo by John Anderson

The Legislature is in town – you're gonna need a drink. Unfortunately, Texas' arbitrary liquor laws make it hard on the businesses that would like to get one to you, especially beermakers. Two bills were introduced this session to help brewers out, but if history is any guide, it will be tough for them to pass.

The bills are mirror images of each other: Microbrewers (small brewers who do nothing but make beer) want the right to sell their products directly to drinkers on the premises of their breweries. Meanwhile, brewpubs (restaurants and bars that make their own beer) want the ability to sell their brews off-premises.

Currently, microbrewers can give beer away on-site, but they can't sell it. While wineries are afforded this business-boosting privilege, suds producers are required to go through wholesalers. Technically, House Bill 602, by Houston's Jessica Farrar and co-author Eddie Rodriguez of Austin, would still deny them this right, but it would allow brewers to offer up to two cases of their beer as a parting gift after brewery tours – for which the brewers may charge admission.

Similar bills in the past two sessions have gone nowhere, thanks to opposition from the Wholesale Beer Distributors of Texas, which fears a threat to the three-tier system in which producers must go through distributors to get to retailers. "This time, we've talked to more of the distributors ahead of time," says Brock Wagner of Houston's Saint Arnold Brewing Comapny, the major promoter of the bill. Wagner has tried to convince distributors that letting small craft brewers make a few bucks while promoting their beers not only won't cut in on the distributors' action, but could lead to more sales for everyone. "The thinking that makes people afraid of the bill is one [that assumes] an economy is a zero-sum game. I'm an economics major. Economies are never zero-sum games. Economies are either growing or shrinking. ... A six-pack going out the door here does not mean a six-pack less going out the door of a distributor to a retailer. It probably means two six-packs going out the retailer's door in the future."

Meanwhile, brewpubs have the opposite problem: They can sell their brews in the restaurant, but they can't get them on store shelves. This creates a sorry situation where out-of-state brewpubs (such as California's Bear Republic Brewery) can sell bottles of their beer in Texas stores, but Texas brewpubs cannot. HB 660 by San Antonio's Mike Villarre­al would let brewpubs that produce fewer than 10,000 barrels per year either sell to a distributor or self-distribute.

The bill's most vocal champion is Scott Metzger of San Antonio's Freetail Brewing Co., who blogs about it daily at www.brewednotbattered.wordpress.com. Unfortunately, he thinks the bill has a "snowball's chance," he says. "I've had discussions with individual wholesalers who are supporters of this bill, but I spoke with a representative of Wholesale Beer Distributors of Texas, and they flat-out told us they are not interested in the passage of this bill or even discussing any modifications that they would agree with. ...

"It is definitely worrisome," he says, "both for the sake of our bill and for the sake of, as a citizen, to think that one organization has the power to squash things that are good for the state." A phone call to WBDT Director Mike McKinney was not returned.

Under the current state of affairs, "It's disappointing that our state's laws favor out-of-state breweries versus in-state breweries," Metzger says. "If I wanted to increase the reach of my beer in Texas, the best thing for me to do is move out of Texas. That's the most absurd thing."

These two bills would especially benefit Austin, which has 12 breweries (13 if you count Real Ale Brewing Company in nearby Blanco), more than any other Texas metro area.

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