“I like beer.” — Tom T. Hall
A little refrain from a jolly good fellow is certainly a mantra among those who work or own craft breweries in Texas, but they don’t like some of the laws governing how to run their businesses.
Texas law requires brewpubs and manufacturing breweries to hold different licenses. A business with a brewpub license can sell beer to-go. Customers can get a growler filled at a brewpub, or purchase beer that can leave the establishment. However, brewpubs are limited to 10,000 barrels a year in production, according to a recent report in The Daily News.
Craft breweries want the ability to sell beer on their premises and to sell beer to-go — meaning beer lovers could buy a six-pack at the brewery and take it home to enjoy.
CraftPAC, the political action committee of the Texas Craft Brewers Guild, has petitioned the state to change the license laws regulating breweries and brewpubs.
Texas laws work on what officials call a three-tiered system. Its purpose is to separate business conflicts that might develop between alcohol manufacturers, distributors and retailers. It’s a way of quelling the possibility of a beer monopoly, but this is based on Prohibition-era thinking.
Before the 18th Amendment was enacted, major national breweries — e.g. Anheuser-Busch, Coors — would set up a bar owner with all the supplies need (barstools, tables, art work, spittoons, etc.) on the promise the bar would sell only that brewery’s product. The product being beer the brewery would distribute itself.
One of the odd issues in Texas laws is that brewers of a certain yearly output must pay a distributor to serve beer in the brewer’s own taprooms.
Here’s the extra odd part, a distributor doesn’t even have to be on the brewer’s property to be owed the fee. An employee of the craft brewery — not being helped by an employee of a distribution company — can take a keg of beer into the brewer’s taproom and a distributor is owed money. In some parts of the world, we call this walking through a doorway.
Think of it this way, if you — all by yourself — prepared, cooked and laid out a Fourth of July spread of hamburgers and hot dogs for family and friends and then somehow you owed Whataburger some money.
Part of the reason these laws exist is because beer distributors and executives spent upward of $6 million supporting political candidates and action committees. The biggest recipients are Gov. Greg Abbott ($1.5 million), Lt. Gov. Dan Patrick ($688,840) and the Associated Republicans of Texas Campaign Fund ($518,176), according to an analysis of campaign contributions by the Texas Tribune and Texans for Public Justice earlier in 2017.
Distributors don’t want to get cut out of any money they can make distributing alcoholic beverages, but craft breweries want to make as much as they can from the products they create. So, if the product never leaves the craft brewery site, why is there this extra and, frankly, unnecessary fee?
Lawmakers always say small business is the backbone of our nation’s economy, and Benjamin Franklin is credited with saying, “God made beer because he loves us and wants us to be happy.”
The craft beer in Texas is a growing economy that can benefit us all. The lawmakers and business owners must get together to enact straightforward, understandable laws to put the “three-tiered system” on an even level.
Mr. Hall would certainly like that.
• Seames O’Grady