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The Trib on the brewpubs’ efforts

I’ve written before about the efforts by brewpubs to pass a bill that would allow them to distribute their product outside their own doors. That effort is being led by Scott Metzger of San Antonio’s Freetail Brewing Company, who has been promoting it via blog, Facebook, a new nonprofit called Texas Beer Freedom and pretty much anything else he can think of. The Trib wrote a story about this and about those who are opposed to it.

Under state law, brewpubs can make and sell their beers only on site; they are not allowed to distribute their products themselves or through a separate wholesaler. Only breweries that do not sell their own products on site may distribute their beer through wholesalers. House Bill 660, filed by Representative Mike Villarreal, Democrat of San Antonio, would give them the green light to increase production, sell to beer distributors and sell directly to stores and restaurants if they produce 10,000 barrels of beer a year — the equivalent of 20,000 kegs — or less.

But major beer distributors do not want to open those spigots. Their lobbyists argue that allowing brewpubs to sell their own wares would destroy the regulatory system in Texas that has operated, effectively and profitably, since the end of Prohibition. Rick Donley, president of the Beer Alliance of Texas, which lobbies for companies that distribute major-brand beer and some craft brews, said the three-tiered system — which regulates the production, distribution and retail sales of beer separately — made the beer business easier to regulate and tax, and keeps any one business from creating a monopoly.

Because brewpubs are not currently regulated in the same way as distributors, Donley said he worries that their products could be shipped to dry counties or to minors. “This regulatory system has worked well since Prohibition,” Donley said. “Why anybody wants to disrupt it is a question I can never quite get an answer to.”

It has worked well for the major beer producers. The top five brands in Texas, according to the state Alcoholic Beverage Commission, are Bud Light, Miller Lite, Budweiser, Coors Light and Natural Light.

The brewpub supporters point that the legislation would make brewpubs that produce up to 10,000 barrels a year and sell directly to restaurants and stores subject to the same requirements as wholesalers and distributors

“At the end of the day, it’s just about they don’t want increased competition and how that affects their personal wealth,” Metzger said.

I have no idea why Rick Donley thinks HB660 would lead to anarchy in the distribution process. The current regulatory scheme has indeed been a boon for the beer distributors and their large clients, but speaking as a consumer who might like to buy a six-pack of Freetail’s finest at my neighborhood supermarket some day, it has most certainly not been good for everyone. We don’t have a free market for beer in Texas, and the distributors are perfectly happy with that. Why our supposedly free-market-loving Legislature is also happy with this, I couldn’t tell you.

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One Comment

  1. Reeseman says:

    He who pays the piper calls the tune, and the only free market lawmakers love is the one for campaign cash. The liquor laws in Texas were written by and for the liquor industry, with just a nod to the Baptists to keep them quiet. The only way we got brewpubs was to accept the retail limitations. The industrial brewers will likely fight this one all the way.