Texas brewers win fight over distribution rights law


If the legislative changes in 2013 that favored Texas’ craft beer industry felt good for brewers, then a court ruling Thursday in Travis County on one of those laws must have felt pretty sweet, too.

By declaring 2013’s Senate Bill 639 to be unconstitutional, state District Judge Karin Crump struck down a law that prohibited brewers from receiving monetary compensation from distributors for their distribution rights. The measure was part of a bundle of legislation that was otherwise a boon to Texas breweries.

In late 2014, Austin-based Live Oak Brewing and Dallas/Fort Worth-area Peticolas Brewing and Revolver Brewing decided to sue the state in the hopes of regaining the valuable capital they said they can get from selling their distribution rights, which they were able to do prior to 2013.

“My biggest asset, I can’t sell. I have to give it away,” Live Oak Brewing’s owner Chip McElroy said recently when the case went to court.

The state argued that the law helped to maintain strict boundaries within the three-tier system — the state’s regulatory system dictating that makers of beer, wine and spirits create their products, distributors sell them to retailers, and those places, in turn, peddle them to the public.

Lawyers for the breweries argued that the 2013 distribution rule hurt their businesses. A brewer should be able to use the value of its company “to help expand it, rather than hand over that value to a distributor for nothing in return,” according to a news release from the libertarian law firm representing the brewers in court.

“The Texas Constitution prohibits the legislature from passing laws that enrich one business at the expense of another,” Institute for Justice Senior Attorney Matt Miller, who represented the brewers in court, said in the release. “This ruling is a victory for every Texas craft brewery and the customers who love their beer.”

The office of Texas Attorney General Ken Paxton, which represented the Texas Alcoholic Beverage Commission in the case, didn’t comment Thursday. It was not immediately clear if the state would appeal the ruling.

Brewers and their fans might be rejoicing their victory right now, but they’re still holding their breaths over two other beer-related cases in Texas courts.

One case involves an issue that brewers unsuccessfully pushed for in the 2013 legislative session. As a result, Dallas’ Deep Ellum Brewing sued the Texas Alcoholic Beverage Commission last year to try and get breweries the ability to sell beer to-go from their facilities — something that wineries and distilleries in Texas are both able to do. (Operators of brewpubs, which sell food in addition to beer, also can sell their products to the public.)

Also, Cuvee Coffee decided to go to battle with the TABC over the issue of whether retailers can sell crowlers, which the TABC argues are one-use cans, rather than aluminum growlers, that only manufacturers of beer can sell.

Both cases are expected to be resolved within the next couple of weeks.


Reader Comments ...


Next Up in Business

‘Caddyshack’ actor Bill Murray’s golf company leases space in East Austin
‘Caddyshack’ actor Bill Murray’s golf company leases space in East Austin

William Murray Golf, an apparel company owned by “Caddyshack” actor Bill Murray and his six brothers, is coming to Austin. The firm has leased 2,735 square feet of office space at 1308 E. Seventh St. in East Austin. Launched in 2016, William Murray Golf sells an assortment of polo shirts, golf shorts and pants, hats and accessories. Spencer...
Your eggs probably aren't cage-free
Your eggs probably aren't cage-free

For some time, it seemed like the plight of egg-laying hens-confined to cages so small they can't even spread their wings-was ending. Restaurants, retailers, hotels and manufacturers, as well as food service and hospitality groups, suddenly recognized that consumer revulsion might cost them real money. So they rushed to announce self-imposed deadlines...
Up the Ladder

Architecture and interior design Mark Odom Studio has named Mari Michael Glassell design director. Biomedical XBiotech has named Alice Gottlieb to its scientific advisory board. Data security SpyCloud has named Jennifer Parker-Snider chief financial officer. Government The Railroad Commission of Texas has named Danny Sorrells assistant executive director...
Top Local Business Stories of the Week
Top Local Business Stories of the Week

ECONOMIC GROWTH: Austin’s economy topped all major U.S. metro areas in growth in 2017: If it hasn’t been obvious from the construction cranes, real estate prices and traffic congestion, some new federal data illustrates the magnitude of the Austin area’s economic boom. The local economy grew by 6.9 percent in 2017, making the Austin-Round...
Beef jerky sold at Buc-ee’s recalled
Beef jerky sold at Buc-ee’s recalled

Hundreds of pounds of beef jerky sold at popular mega-gas station Buc-ee’s are being recalled, accoring to a U.S. Department of Agriculture Food Safety and Inspection Service announcement Friday. The agency said approximately 690 pounds of ready-to-eat teriyaki beef jerky products from Junior’s Smokehouse Processing Plant in El Campo may...
More Stories