March 04, 2007
Microbrewery Free Trade Bill filed

It's been a little while since the last update on the effort by microbrewers to reform Texas' Alcoholic Beverages Code, but I'm pleased to report that there is some action. From the press release:

Friends of Texas Microbreweries, a coalition of Texas craft breweries and beer lovers, is calling a bill filed in the Texas legislature a historic step to help small businesses. The Texas Microbrewery Free Trade Bill, filed today by Representative Jessica Farrar (D - Houston), would allow small Texas breweries to sell limited quantities directly to patrons.

The Texas Alcohol and Beverage Code requires microbreweries to sell only to distributors and retailers. These outdated constraints put Texas craft breweries at a severe financial disadvantage. In fact, 14 of the state's 19 microbreweries have failed in recent years. The Texas Microbrewery Free Trade Bill would allow small breweries to make on-premise sales to patrons of no more than 5,000 barrels of ale and malt liquor annually. Microbreweries in many other states, especially those that are distributed in Texas, are allowed retail sales at their breweries.

"Texas should be celebrating the small business breweries that add to the color and flavor of our communities, but instead we are stacking the deck against our state's microbreweries," said Representative Farrar. "Texas microbreweries should be governed by common sense regulations that cultivate small businesses rather than unreasonably constrain them."

The Texas Microbrewery Free Trade Bill benefits microbreweries, patrons and retailers.

* By selling directly to patrons, microbreweries can achieve profit margins that make their operations financially viable, which encourages more microbreweries to start up.
* Customers are more likely to remember visiting a Texas microbrewery if they are allowed to purchase a six pack during their visit to bring home.
* Retailers can enjoy increased demand for Texas microbreweries, which typically command higher prices and higher profit margins than mass-produced beers.

Texas wineries have thrived financially after Texas voters approved doing away with a similar prohibition on limited direct sales a few years ago.

"We want what any small business would want: the freedom to sell our products to people who come to us and want to buy," said Brock Wagner, founder of Saint Arnold Brewing Company in Houston, the oldest craft brewery in Texas. "We encourage Texas beer lovers to contact their lawmakers and encourage them to support this bill."

In addition to Houston-based Saint Arnold Brewing Company, every other Texas microbrewery is backing the initiative, including Independence Brewing and Live Oak Brewing Company in Austin, Rahr & Sons Brewing Company in Fort Worth, and Real Ale Brewery in Blanco.

The bill in question is HB1926. We'll see how it goes.

Posted by Charles Kuffner on March 04, 2007 to That's our Lege