Parish may stay in Louisiana after all. Re: Texas Senate pass bill

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This bill will put a ceiling on success for the 200+ craft breweries operating in Texas and will slow the future growth of what has become an important burgeoning manufacturing industry in our state,” the guild wrote in a statement published on Facebook shortly after HB 3287 passed.

HB 3287, pushed by wholesalers through the trade groups Beer Alliance of Texas and Wholesale Beer Distributors of Texas, will change the Texas beer code in the following ways.

Breweries making 225,000 barrels of beer per year (a calculation that includes the amount of barrels from any affiliate brewery with a 25 percent or more stake in the company) cannot operate a tasting room.
There are exceptions to this rule, however. Current breweries over this limit have been grandfathered in and will still be able to keep their taproom doors open, but they and future breweries eligible for exception have to pay their distributor for all beers they sell in their taprooms. Austin’s Oskar Blues Brewery is affected, and any future taproom locations of breweries like Houston’s Karbach Brewing — now owned by Anheuser-Busch — will also have to pay up. They can have up to three tasting rooms.
Self-distributing breweries can only self-distribute a total of 40,000 barrels across all locations; anything above that has to be sold through a distributor. In other words, single-premises breweries like Austin Beerworks and Live Oak Brewing can only expand so much if they want to keep their independence from the wholesale tier.

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Here's another impact of the bill. The 5,000 bbls allowed to be sold on site would also be the sum of all breweries with common ownership. For instance, Hops & Grain Brewing in Austin, San Marcos and Pint & Plow Brewing in Kerrville, TX would all be counted towards our 5,000 bbl limit because of my common ownership with the three facilities. If we had any investors who had an ownership interest in another brewery in Texas then that breweries tap room sales would also be lumped into our total.

Now here's where it really gets nefarious. If the total production were to increase above 225,000 bbls this bill would still allow for the 5,000 bbl sold on-site but the beer would have to be sold to a wholesaler and then purchased back at retail price before it could be sold on-site. But the beer would never actually leave the brewery. A brewer would have to invoice their distributor at the normal wholesale cost and then the wholesaler would send back an invoice at retail cost before the brewer could sell it. And because of the wonders of the Alcoholic Beverage Code, the brewer would have to pay the invoice immediately and the wholesaler would be allowed credit terms on their invoice.

So, let's just say for instance that New Belgium decided to make an investment in Hops & Grain and acquire a 1% ownership stake. Because our collective production would now be over 225,000 bbls we would be subject to this dock bump tax from our wholesalers before we could sell beer on-site. We would lose a massive margin and most likely have to increase our beer prices on-site to continue to employ our tap room staff and cover our operating expenses.

Also, let's say that Austin Beerworks, (512) Brewing and Live Oak Brewing decided to form a partnership. Even thought neither of them currently self distributes over the allowed 40,000 bbls of beer individually they would each have to cease self-distribution because they now collectively self-distribute over 40,000 bbls.

Tell me how in the hell this "protects" craft brewers? I'll answer that for you, it doesn't. It's a bill created for and by the wholesalers and only benefits the wholesalers. They claim that the current three-tier system is what has allowed us to prosper as a craft beer industry. But why then is Texas the only state in the United States that doesn't allow Brewers to sell beer to-go? It seems to be working well in the other 49 states. And it's not just good for brewers, it's also good for the state. Increased sales by breweries translates into increased tax revenue for the state. Increased tourism and visitor traffic to brewery tasting rooms introduces more people to craft beer. Introducing more people to craft beer translates into increased sales at grocery stores, convenient stores, bars and restaurants. And the large majority of the beer that is sold to these retailers is sold to them by wholesalers. So, increased sales at brewery tasting rooms also translates into increased sales for wholesalers.

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