State Senate Passes Craft Brewing Bills That Would Allow Expanded Sales

Categories: Drink This

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Earlier this week, the Texas Senate approved a family of bills dear to the heart of Texas craft brewers. The legislation lets brewpubs sell a limited amount of beer through distributors, while craft breweries will get to sell their products to consumers on-site.

See also:
- Public Hearing Set for Craft Beer Legislation
- A Texas Lawmaker Filed Four Bills Yesterday to Make Life Easier on the State's Craft Brewers

The bills still must get past the House and governor, of course, but if you've been following LDD's coverage of the craft brewing industry, you know what a long, hard slog it's been to get this far. (Big brewers, wholesalers and retailers are not what you'd call keen for competition, and they have many loyal friends in the Legislature.) So we imagined some fierce celebrating among the craft brewers' kegs when the vote came down -- sort of like those old-timey pictures of guys in hats raising mugs of foam when Prohibition finally went away.

Turns out, not so much, at least not for Tait Lifto, a sales specialist for Deep Ellum Brewing Co., where they're not buying nails to build a tap room just yet. "We want to make sure we continue to take care of our existing customers first," he said. The local brewery known for its hyper-hoppy brews recently landed big accounts with Smashburger and On The Border. As their business grows, selling directly to drinkers likely will make up a tiny fraction of the brewery's revenue -- so first things first. Still, he adds, the passage is "a movement forward for the whole industry."

Exactly how did Lifto react as he watched the vote live on the Internet? "For me, every day is a celebration," Lifto said. He certainly raised a glass, but then he probably would have done that anyway.


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18 comments
looptwelve
looptwelve

If I recall correctly, Deep Ellum Brewing Co cried their fucking eyes out over Facebook when the first bill passed and they realized they couldn't sell their rights to distributors.

CitizenKane
CitizenKane

I am not up on the legislative and economic aspects of the craft brew business; but maybe keeping barriers up to craft beer business is a good thing..


1.  It is relatively easy to be a small brewer ?  Right ?  So what is the beef ?

2.  If we have alot of small brewers that is a good thing;  what the craft brewer industry wants is the ability to expand and monopolize thru distribution and market share ?  right ?  

That isn't necessarily a good thing for consumers or for the craft brew business.

3.  The craft brewers seem to just be smaller clones of the bigger breweries/beverage outlets.


ScottsMerkin
ScottsMerkin topcommenter

business friendly Texas huh?  

crustyjugglers
crustyjugglers

The bills didn't really grant craft brewers a great deal of additional flexibility.  They're now free to sell on-premise for on-premise consumption, but they didn't gain the ability to sell on-premise for off-premise consumption (selling growlers or six-packs), which would be a much bigger boost.  SB 639 also made it illegal for craft breweries to sell their distribution rights for cash, which eliminates a very helpful financing tool when craft breweries get big enough to stop self-distributing.  

It's nice that the legislature is finally loosening up a little on craft brewers, but this isn't a huge win for anyone.

crustyjugglers
crustyjugglers

@CitizenKane It is not "relatively easy" to be a small brewer who wants to sell their product to the public.  It is a long process to obtain the regulatory (both state and federal) approvals to produce and market your product.  Layer that on top of the 3-tier distribution system in Texas and it's something of a miracle that we are seeing so many new breweries starting up around here.

Craft beer is about giving consumers choices of what to drink.  In growing numbers, people are choosing not to drink what is being sold by AB/Inbev and Miller/Coors.

Mervis_Earl
Mervis_Earl

Craft brewers just want the same rights that the Texas wine industry has.

Do you know the market share of the two big boys vs. the craft brewers? Here it is in a nutshell and my number may not be perfect but they are close:

AB/INBev and Miller/Coors total about 78% of the beer market

Foreign Macro brews total somewhere around 14% and are mostly owned by the big two above.

Craft and regional brewers account for somewhere around 8% of the market depending on whose numbers you believe.

This story is about the big boys fighting to keep their market share vs. the little guys that are nipping away at that same share.

dfwheathen
dfwheathen

@crustyjugglers So much for supporting small businesses, right? I'll take the baby step if that's all I get. But c'mon Texas!

CitizenKane
CitizenKane

@feldnick @CitizenKane Absolutely not.  Just a consumer who doesn't have a dog in this fight....from my perspective the craft brew options have been exploding exponentially in Dallas and elsewhere.....

CitizenKane
CitizenKane

@Mervis_Earl 

Good stats, thanks...

What was the craft brew segment 10 years ago ?  Likely close to 1% ?

So, under current laws, the craft brewers grew from 1% to now 8% (an 800% increase)?

I would say the craft brew business has been very healthy under current laws...

What is going on in Austin isn't about increasing consumer access to craft brew; but about the craft brew industry wanting to increase market share even more.






Mervis_Earl
Mervis_Earl

Republicans believe in the old saying "Do as I say not as I do".

Mervis_Earl
Mervis_Earl

What they want is fairness. A brewpub from another state that allows brewpubs to package and sell can come to Texas and sell their packaged beer. Currently a brewpub in Texas cannot package and sell their beer. So Texas allows companies from other states to operate in their state at a competitive disadvantage to the state's own businesses.

You can visit/tour a winery in Texas and at the end purchase some wine to take home with you. Not so at a brewery.

crustyjugglers
crustyjugglers

@Mervis_Earl I did follow the whole story and knew about that contribution.  I'm also fairly certain that the same group spreads its money around and doesn't just give to Sen. Carona.

Mervis_Earl
Mervis_Earl

If you followed the whole story you would know that the Texas Wholesalers Association, or whatever they are called, lobbied Sen. John Carona (R-Dallas)  who introduced a bill at the last minute which almost resulted in a whole years worth of work on the original 4 bills going down the drain. The $40,000 they contributed to said senator sure helped.

crustyjugglers
crustyjugglers

@Mervis_Earl I think it's very likely that they spread their money around fairly evenly.  I'd have to check to be sure.

Mervis_Earl
Mervis_Earl

And who do you think the vast majority of these people support?

crustyjugglers
crustyjugglers

@Mervis_Earl This isn't really a Dem vs. Repub issue.  I believe the bills passed unanimously out of committee and the Senate.  The issue is likely more related to the interests of the big brewers and distributors in Texas.

guillermo_botefuhr
guillermo_botefuhr

Mervis believes in the unalloyed perfection of the TX Dem Party!

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