Texas Lawmakers on Verge of Approving Beer-to-Go Sales

The Texas Craft Brewers Guild’s effort to legalize beer to-go sales inched closer to reality this week, when powerful lobbying group the Wholesale Beer Distributors of Texas (WBDT) agreed to back a measure that, if passed, would allow consumers to purchase up to a case of beer a day from the Lone Star State’s manufacturing breweries.

Although specific language of the measure is still being finalized, the primary tenets of a “stakeholder agreement” reached in February between the Texas Craft Brewers Guild and Texas’ other wholesaler group, the Beer Alliance of Texas, would be included in the new measure. However, the number of cases a consumer could purchase daily from a manufacturing brewery would be reduced from two to one (up to 288 fl. oz.). It would also still count against an existing 5,000-barrel cap placed on on-premise taproom sales at those beer companies.

Currently, Texas beer producers that hold manufacturing licenses are not allowed to sell beer-to-go, while the state’s brewpubs, wineries and distilleries with similar permits, are allowed to sell their products for off-premise consumption.

The WBDT’s support of to-go sales marks a reversal of course for the organization, whose president, Larry Del Papa, had openly lobbied against changes to the law. The WBDT’s lack of support threatened to torpedo efforts to finally legalize beer-to-go sales, and keep the state’s alcohol regulatory body, the Texas Alcoholic Beverage Commission (TABC), in operation. If lawmakers don’t pass a bill before the legislative session ends on May 27, to-go sales would be off the table, and the TABC would possibly cease operations.

“At the end of the day, the continuation of the TABC is much more important than this carve out for certain breweries,” WBDT executive vice president Tom Spillman told Brewbound, via email. “So in order to help passage of the TABC Sunset Bill, we agreed to negotiate a more reasonable beer-to-go carve out. Hopefully we can now move forward together and start growing the beer segment of the industry.”

Speaking to Brewbound, Beer Alliance of Texas president Rick Donley said he’s hopeful the WBDT’s support will “pave the way for final passage.”

“We’re pretty confident in that,” he said. “Obviously, you don’t want to speak before the legislative votes have been counted, but we are hopeful.”

The legislation could be heard on the Senate floor during a special session slated for Sunday.

The new compromise comes a week after the Senate stripped the to-go-sales amendment from the TABC sunset bill, putting its future in jeopardy.

According to those close to the lobbying effort, lawmakers called a meeting last Friday to push forward a compromise that would remove roadblocks preventing the passage of sweeping legislation regarding the continuation of the TABC. A compromise bill was on the table on Monday, and, by Wednesday, all three lobbying groups had signed a new stakeholder agreement that could give way to beer-to-go sales at manufacturing breweries.

Other provisions within the new compromise were hashed out in February by the guild and the Beer Alliance, including a 12-year moratorium against lobbying the Legislature to adjust barrelage caps or the limit on the amount of beer breweries can sell to-go.

Donley and Austin Beerworks co-founder Adam DeBower both told Brewbound that the truce provides stability for the state’s beer industry.

“That 12-year moratorium means we won’t come and ask for more, but nobody else can come and ask for less,” DeBower said. “This is how we prove to the Legislature that the compromise is real and it is binding.”

Nevertheless, if lawmakers pass the legislation, it would mark an end to several years of contentious lobbying battles over the beer-to-go provision. Efforts to reform Texas’s direct sales laws date back to 2015 when Dallas-based Deep Ellum Brewing sued the TABC, arguing that manufacturing breweries were at a competitive disadvantage.

Two years later, Texas brewers again fought to legalize to-go sales, but ran into a powerful beer distributor lobby that was successful in pushing through changes that limited what craft breweries were able to do inside of their own tasting rooms. That year, Gov. Greg Abbott signed a law that forced larger craft breweries making more than 225,000 barrels annually to repurchase beer previously sold to wholesalers in order to continue taproom operations.

Following that setback, in early 2018, the Texas Craft Brewers Guild launched CraftPAC, a political action committee (PAC), aimed at overturning the state’s “archaic, anti-competitive beer laws.” Democrats and Republicans took notice, making beer-to-go a part of their respective party platforms. Earlier this year, lawmakers in the Senate and the House introduced companion bills, seeking to legalize the off-premise beer sales.

If the latest version of beer-to-go sales language passes, consumers would be able to purchase cases from the state’s craft breweries beginning September 1, 2019.

“What this is going to do is help small brewers from across our state develop new brands, new styles of beer, and we’re going to be able to demonstrate in our taprooms that these beers have value for our retail and wholesale partners,” DeBower said. “My full belief, and this is backed up in every state in America, is this is going to help us sell more craft beer in the state of Texas.”

Beyond the to-go-sales issue, craft brewers also hailed the potential passage of the TABC sunset bill as “transformative.” DeBrower said the TABC sunset bill checks off several legislative priorities for craft breweries, including eliminating the state’s distinction between beer and ale, streamlining the label approval process and allowing beer produced outside of a county to be warehoused in another county, among other reforms.

“This legislative session, we’re literally hitting our top three, our top four biggest items, bringing us into an age of modernity that we couldn’t have dreamed about two years ago,” he said.

DeBower called the TABC sunset bill “the most significant legislative reform” of the state’s alcoholic beverage code “in a generation.”

According to Texas Craft Brewers Guild executive director Charles Vallhonrat, the TABC bill removes much of the bureaucratic red tape Texas’ craft brewers endured throughout the years.

“Brewers will see reduced regulation, the elimination of redundant licensing, and the ability to get product to market faster,” he said, via a statement. “Distributors and retailers will see a stronger market with even greater brand choice. And most importantly, consumers will enjoy the fruit of these improvements, including the ability to buy beer to-go from their favorite brewery.”

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