Craft brewers call the Texas Legislature’s passage of a new beer regulation ‘disheartening.’
A bill that would force Texas breweries, once they’ve grown beyond a state-limited size, to sell and buy back their own beer before offering it in their own taprooms has now passed both houses of the state Legislature.
“To say that today’s outcome was incredibly disheartening would be to put it mildly,” the Texas Craft Brewers Guild said in a statement following a 19-to-10 vote in the Senate.
The House approved the measure May 6.
House Bill 3287 has been blasted as “anti-competitive,” “anti-beer” and a potential job killer by an unlikely coalition that includes Anheuser-Busch InBev and the state’s 200plus craft brewers, which often find themselves at odds with the global giant. The Texas Association of Manufacturers and the conservative Texas Public Policy Foundation also opposed the measure.
The bill was supported by the state’s two distributor groups.
If signed by Gov. Greg Abbott, the law would affect Houston’s Karbach Brewing immediately because it forces all breweries that grow to or at some point are taken over by a company that collectively exceeds 175,000 barrels in annual production to buy back their beer from distributors.
Karbach was acquired last fall by AB-InBev.
Even much smaller craft brewers say the net effect of the bill would be to diminish the value of their companies by discouraging investors and making it harder to grow. Those that reach the new, lower production threshold would then find their profits crimped by the wholesalers’ cut.
The bill sponsor has said the 2013 legislation that allowed taproom sales for the first time was intended to help the smaller brewers early on and not to carve out an exemption for the larger players.
Keith Strama, counsel for the Wholesale Beer Distributors of Texas, told a Senate committee recently that the measure is critical to prevent large, vertically integrated global breweries from becoming too powerful.
The bill also was supported by the Beer Alliance of Texas.