Craft beer lovers hoping to enjoy a pint at their favorite Texas brewery could soon see their tabs rise thanks to a bill making its way through the state legislature.
The Texas House of Representatives recently approved House Bill 3287 by a vote of 111-33, inching smaller craft brewers closer to a mandate that they abide by the same on-site beer sale laws that pertain to the larger parent companies who own them. According to the bill, any craft brewery seeking to sell beer directly to customers from its own taproom must first sell those beers to a distributor and then buy them back at a higher price, if the company that owns the brewery produces 225,000 or more barrels of its own beer each year.
“It really disappoints me the way Texas is stomping on the little guy,” Jeremy Roberts, founder of 903 Brewers, said. “What that means is if I wanted to go in and partner with a bigger brewery that may brew that much beer, I’m going to have to shut my taproom down. It would just be too expensive.”
Roberts said although Texas ranks 42nd in the nation in the number of breweries per capita, the state has seen a craft brewery boom in recent years and those beer makers want to sell their products in-house and directly to thirsty customers. With Texas craft breweries riding a wave of success, Roberts said major distribution companies have begun to worry over lost revenue and have used their financial power to sway lawmakers’ votes in their favor.
“Follow the money trail,” Roberts said. “Their campaigns are being funded by these big distributors who said, ‘Hey look, this is going to hurt our pocketbook. I’m going to give you this money, don’t let this pass.’”
In his use of the word “pass,” Roberts referred to breweries’ ability to continue to sell beer as they have been and without adhering to the regulation imposed on high-volume producers.
Rep. Larry Phillips was one of the roughly three dozen lawmakers who sided with the craft brewers and voted against the bill. Phillips said he voted “no” because he supports local entrepreneurs and believes the craft breweries in his district have had a positive impact on the communities in which they’re based.
“I knew where I was on it,” Phillips said, referring to his stance on the bill. “We have some local craft brewers in our community and I wanted to show support for them.”
Phillips said he didn’t know what factors — distributors’ financial contributions included — ultimately swayed a majority of his fellow representatives to vote in favor of the bill, but said it might be a reluctance to change the long-standing three-tier system of brewers-distributors-retailers.
“Texas is slow to change on these things because we’ve had an established system for years. ” Phillips said.
Because 903 Brewers is independently owned and produced only 1,800 barrels in 2016, Roberts said the bill, if passed, wouldn’t have any immediate repercussions for his brewery. But with plans to expand production next year to at least 10,000 barrels, he’s worried his future growth could put him on a collision course with the proposed regulation.
“It’s nothing that’s affecting me today,” Roberts said. “But at the rate we’re growing in the next five to 10 years, this could really hurt us.”
And to the point that lawmakers are hesitant to change the way the way beer is traditionally sold in Texas, Roberts said he and other craft brewers will use their own political power to keep their taprooms open and their beers flowing.
“The beautiful part of the way our government is run is that even though these guys make the rules, we vote them in,” Roberts said. “So, if we’re not happy with it, we can vote them out and that’s exactly what we’ll do.”
House Bill 3287 has been referred to the Senate Business and Commerce Committee.