Small-batch beer brewers pushed for a package of bills Tuesday that would allow them to grow their fledgling businesses, but other alcohol legislation has bubbled up that could kill their efforts.
In a packed hearing of the Senate Business and Commerce Committee, state Sen. Kevin Eltife, R-Tyler, presented proposals that would allow microbreweries and brewpubs to get more of their products to a greater number of beer drinkers across the state.
But the committee’s chairman, Sen. John Carona, R-Dallas, seems to have tied the fate of that legislation to his own bill that would make changes in the way the large manufacturers and wholesalers are regulated. And he gave all parties until Monday to reach agreement. Otherwise, all the proposals could be placed at the end of the committee’s calendar, where they probably would languish.
“Our craft beer bills are being held hostage by other issues,” Eltife said.
Scott Metzger, founder and CEO of San Antonio-based Freetail Brewing Co. and a member of the Texas Craft Brewers Guild, said the measure by Carona has nothing to do with development of the craft beer industry.
Carona said the craft brewers have legitimate concerns, but the real battle is about the role of the wholesalers. Still, by the end, Carona said he expects an agreement on his bill and passage of craft beer legislation.
But as of Tuesday, the two big wholesale beer distributor trade groups in the state remained split on Senate Bill 639. The Wholesale Beer Distributors of Texas supported it at the hearing, while the Beer Alliance of Texas joined several other business groups in opposing it.
SB 639 contains provisions covering self-distribution, prohibits the purchase of brand rights and calls for manufacturers to charge the same price to distributors, no matter whether the end customer is a football stadium or a neighborhood bar.
In Texas, the sales of beer and liquor are governed by post-Prohibition rules that maintain boundaries between manufacturers, distributors and retailers, commonly called the three-tier system. Attempts to alter the system always have been challenging and complicated, and for that reason lawmakers have been reluctant to change the laws.
Eltife’s package of bills would take several steps to help small beer makers. They would allow brewers to sell their products to consumers at their breweries, permit brewpubs to sell their products in the wholesale and retail markets, and protect small brewers’ existing rights to self-distribute.
Specifically, Eltife’s SB 515 would allow brewpubs — places like Uncle Billy’s Brew and Que in Austin, which sells food and its own beers — to brew as much as 10,000 barrels a year, up from 5,000 barrels now. It would also allow them to self-distribute 1,000 barrels a year, selling to bars and stores — a right they don’t have now.
“That’s why in Texas there are so few brewpubs,” said Rick Engel, co-founder of Uncle Billy’s.
The measure would also allow the brewpubs to sell their products through distributors.
Additionally, SB 518 says microbreweries, which are prohibited from selling their drinks on the premises, to sell up to 5,000 barrels a year on site.
“I want to allow the craft brewers to grow without undermining the integrity of the three-tier system and our wholesalers,” Carona said.