Texas No Longer Includes To-Go and Distributed Alcoholic Beverage Sales in On-Site Consumption Closure Calculation

Texas craft breweries are getting some relief from the state’s regulatory agency.

The Texas Alcoholic Beverage Commission (TABC) ruled on Friday that the 51% calculation of gross receipts should only include the sale of alcoholic beverages for on-premise consumption. As such, to-go sales of alcoholic beverages, as well as distributed volume to retailers and wholesalers should not be included in the calculation of gross receipts to determine which establishments should shutter for on-site consumption.

Texas Gov. Greg Abbott issued an executive order on June 26 rolling back the state’s reopening and closing bars and other establishments for on-site service that derive more than 51% of their gross receipts from the sale of alcoholic beverages.

State regulators’ initial read of that order included beer sales to wholesalers within that formula. That caused headaches for many Texas craft breweries.

As Brewbound reported on July 15, Houston-headquartered Saint Arnold Brewing Company said it was forced to cease on-site service at its restaurant and beer garden due to the formula that included distributed beer volume, and the company was being forced to consider laying off 75 workers.

Last week, a survey of the state’s brewers by the Texas Craft Brewers Guild last week found that a third of brewery owners said their businesses could shutter in three months “without some change to the current shutdown or new economic relief options.”

With the state’s craft breweries in peril, the TABC reexamined the calculation and offered the new interpretation on Friday.

So two weeks after being forced to close its restaurant and beer garden, Saint Arnold will be able to reopen.

“Today we can safely reopen our beer garden to dine-in customers, and our 75 team members, who have been either with massively reduced hours or idle for the past two weeks, are coming back to work,” Saint Arnold founder Brock Wagner said in a statement. “This is great news for everyone involved.”

Wagner credited an “outpouring of support” from community members, as well as media coverage for bringing the “negative consequences of the previous order” to the attention of Gov. Abbott.

Nevertheless, Wagner wrote that although the ruling helps Saint Archer, “it is narrow in scope and doesn’t benefit most Texas breweries with taprooms.”

Wagner called attention to the state guild’s petition that asks the governor to allow the state’s craft breweries to deliver and ship craft beer to provide relief to those companies whose taprooms remain closed.

As of press time, 20,793 people had signed the petition.

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