Brewers toast passage of beer-to-go Senate bill
TABC code amendment would allow sale of craft products for off-site consumption
Beer to go is on tap to finally become law in Texas. The state Senate unanimously passed the Texas Alcoholic Beverage Commission Sunset Bill on Wednesday night, just hours before time ran out to ratify new legislation.
Brewers and legislators are confident the bill will skate through the governor’s office, meaning that beginning Sept. 1, Texans will be able to purchase growlers, crowlers and cans at their neighborhood breweries, to consume at home.
“Our constituents elected us to be bold. And with that, I give you Beer To Go, baby,” Sen. Dawn Buckingham, R- Lakeway, announced enthusiastically, as she introduced the amendment a few minutes before 9 p.m. Wednesday.
“This amendment is more than
just about selling beer to go,” Buckingham continued. “It’s about job creating, economic development and support for entrepreneurship — issues that I know are important to every one of you in this room.”
By Thursday morning, brewers across the state were already in good spirits.
“Oh man, I feel so much better this morning than I did yesterday morning,” said John Holler, who owns Holler Brewing along with his wife, Kathryn.
Holler is a board member of the Craft Brewers Guild and a key part of the push to help Texas become the nation’s 50th state to allow beerto-go sales. Legislators hailed the passage as a win for consumers and businesses, who faced off with two massive alcohol distributor lobbying groups — the Wholesale Beer Distributors of Texas and the Beer Alliance of Texas — on the road to legislation.
Movement gains speed
For years, Texas brewers have been vocal about what they refer to as the “antiquated” legislative code. Just last week, Saint Arnold founder Brock Wagner said that when would-be brewers ask him what he would have done differently when launching his brewery in 1994, he says, “I would have opened up in a different state.”
Despite the codes, Texas’s craft beer scene has boomed in recent years. In Houston alone, the number of breweries skyrocketed, from 12 to 52 between 2013 and 2018. In 2017, the Brewers Association reported that there were 283 craft breweries in operation in Texas, making it a $4.5 billion industry.
Texas craft brewers advocated for to-go beer for more than a decade. But it wasn’t until the run-up to this legislative session that the movement reached its full force and the Texas Craft Brewers Guild political action committee was formed.
“There are entrenched special interests who have been in power for many generations, and they’ve seen themselves as the arbiters of the TABC, and they’ve said they don’t want to see any kind of updates or reforms to the existing codes,” said Adam DeBower, chairman of the guild’s legislative committee and co-founder of Austin Beerworks.
“There was a group of distributors that was trying to fight this tooth and nail,” said Rep. Eddie Rodriguez, D-Austin. “And they’ve been around for quite a while. They have a good relationship with the capital, and they’re one of the more powerful lobbying groups in the capital. So it was an uphill battle to get this passed.”
While Rodriguez originally outlined a push to allow consumers to purchase two cases of beer a day directly from the brewers, a final negotiation with the distributor lobby cut that in half.
“It’s an issue that’s been before the Legislature for the last several sessions, and it finally came to a head,” said Tom Spilman, executive vice president of the Wholesale Beer Distributors of Texas. “And it was time to try to work something out.”
‘Which do you want to do?’
While Spilman said he would not have negotiated a resolution that he would not be happy with, he expressed concern about breweries earning the chance to operate as both manufacturers and retailers in what has typically been a three-tier system of manufacturers, distributors and retailers.
“It chips away at the integrity of that three-tier system, which was designed to separate the manufacturers from the distributors and the distributors from the retailers,” Spilman said Thursday afternoon. “Do you want to make, distribute, or sell the product?”
Rodriguez had first authored House Bill 672 to legalize takeaway beer. Despite bipartisan support, it was stalled in committee without a hearing. As a result, Rodriguez moved to add beer to go to the TABC Sunset bill as an amendment, winning by fewer than a handful of votes.
“If my amendment didn’t get on in the House, the Senate bill wouldn’t get a hearing either. This thing was dead up until the moment it got onto the Sunset Bill in the House,” said Rodriguez, who issued a news release late Wednesday heralding beer to go as “the underdog victory of the session.”
In Texas, sunset bills require the Legislature to vote on extending policies or programs every few years, lest the programs expire. It’s also a natural point in time during which lawmakers review the way the program or policy operates. In addition to beer to go, the changes ratified in the TABC Sunset Bill include increasing the number of liquor permits any liquor outlet can hold to 250, while a move to legalize the sale of alcohol before noon on Sundays fell flat.
Brewpub or brewery?
Prior to the beer-to-go amendment, TABC code stated that customers could buy to-go beer at brewpubs, but not breweries. And that can be confusing.
Brewpubs are capped at producing 10,000 barrels a year, while breweries can manufacture up to 250,000 barrels (a huge number, considering that Houston’s largest brewery, Saint Arnold, only produces 70,000 a year). As such, the taprooms at Saint Arnold, and other major players like 8th Wonder have never been able to sell beer for off-site consumption.
And there are other breweries on the smaller side of the spectrum that are limited for different reasons. At their brewery in Sawyer Yards, John and Kathryn Holler were unable to obtain a brewpub license due to zoning laws and their proximity to an HISD building. As such, Holler operates under a brewery license, which means Holler beer is never allowed to leave the brewery site.
“That’s a challenge,” Eureka Heights Brewing founder Casey Motes said last week. “I can tell you that we couldn’t have paid our rent the first few months if we didn’t sell beer on site. It made us viable to get to the point where we could grow a little bit.”
With stakeholders confident that the governor will sign the law, brewers are looking forward to beer to go taking effect in a few months.
“We’re going to have a party on Sept. 1 for sure,” said DeBower, from Austin Beerworks.