Texas brewers lose legislative fight over taproom bill, headed to governor’s desk

Tom McCarthy Jr. for American-Statesman. Self-distributing breweries like Austin Beerworks will be affected by HB 3287, which just passed the Senate and now just needs Governor Greg Abbot’s pen to become law.

Texas brewers were dealt a blow this afternoon when House Bill 3287, which seeks to limit breweries that grow beyond a certain size or become owned by a larger beer company, passed the Texas Senate by a 19-10 vote.

The bill will now head to the governor’s desk to be signed into law, but the Texas Craft Brewers Guild, representing the state’s breweries, isn’t ready to give up yet and has announced that it will continue to fight against it in the hopes of a veto from Texas Governor Greg Abbott.

“This bill will put a ceiling on success for the 200+ craft breweries operating in Texas and will slow the future growth of what has become an important burgeoning manufacturing industry in our state,” the guild wrote in a statement published on Facebook shortly after HB 3287 passed.

HB 3287, pushed by wholesalers through the trade groups Beer Alliance of Texas and Wholesale Beer Distributors of Texas, will change the Texas beer code in the following ways.

  • Breweries making 225,000 barrels of beer per year (a calculation that includes the amount of barrels from any affiliate brewery with a 25 percent or more stake in the company) cannot operate a tasting room.
  • There are exceptions to this rule, however. Current breweries over this limit have been grandfathered in and will still be able to keep their taproom doors open, but they and future breweries eligible for exception have to pay their distributor for all beers they sell in their taprooms. Austin’s Oskar Blues Brewery is affected, and any future taproom locations of breweries like Houston’s Karbach Brewing — now owned by Anheuser-Busch — will also have to pay up. They can have up to three tasting rooms.
  • Self-distributing breweries can only self-distribute a total of 40,000 barrels across all locations; anything above that has to be sold through a distributor. In other words, single-premises breweries like Austin Beerworks and Live Oak Brewing can only expand so much if they want to keep their independence from the wholesale tier.

Given that Texas brewers had hoped 2017 would be the year Texas allows its breweries to sell beer directly to customers for off-premise consumption, HB 3287, which they see as taking some of their rights away, has been a big blow.

“To say that today’s outcome was incredibly disheartening would be to put it mildly,” the Texas Craft Brewers Guild said it in its statement on Facebook.

But wholesalers argue that the bill prevents large multinational breweries from “gobbling up” Texas’ small craft breweries and having “access to multiple taprooms across the state,” Rick Donley, representing the Beer Alliance, said at a previous committee hearing. That sort of access would be a violation of the three-tier system.

It’s “a system that “has allowed for an incredibly competitive marketplace and allows smalls breweries to thrive in a way that other commodities can’t do because of the inability to get to market without a distribution tier,” Keith Strama, counsel for the Wholesale Beer Distributors of Texas, later said in the same hearing.

The only hope now for brewers to be able to sell beer to-go from their taprooms is a lawsuit that Dallas-Fort Worth’s Deep Ellum Brewing and others have lodged against the Texas Alcoholic Beverage Commission, a case currently still tied up in the courts. Texas remains the only state in the U.S. that doesn’t permit its breweries to offer packaged beers for off-premise enjoyment.

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  1. […] are waiting to see whether their governor will sign a bill that would prohibit a brewery and its corporate affiliates that produce more than a total 225,000 […]

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