March 4, 2012

Why Support HB660?

In Texas, a brewery can package its beer for sale in stores and bars, but can’t sell its beer on site. A brewpub is the opposite of a brewery: a brewpub can sell its beer only on site, and can’t sell its beer at bars or retailers. A beermaker in Texas can be either a brewery or a brewpub, but not both.

Currently, Texas law discriminates against Texas businesses because it favors out of state brewpubs over Texas brewpubs. A brewpub in California isn’t subject to Texas restrictions, so it can sell beer on site as well as package it for distribution to other states, including Texas. A Texas brewpub can’t do this. So we have a situation where you can buy beer from a California brewpub at your local HEB, but you can’t buy beer from the brewpub right down the street. The only place to get Texas brewpub beer is from the source.

The way Texas law is now, a Texas brewpub owner could sell more beer in Texas if he moved his business to California or Colorado. That way, he could still sell his beer on site, while also packaging it for sale in stores. By remaining in Texas, Texas beermakers miss out on an important revenue stream: brewpubs can’t make money by selling their beer in stores or in other bars; breweries can’t make money by selling their beer on site.

Texans drink more beer than every other state but California, but Texas ranks in the bottom five states in terms of breweries per capita. It’s not that Texans don’t love beer— it’s that Texas law makes it hard to make beer in Texas.

Craft beer is one of the fastest growing segments of the U.S. economy, but Texas is missing out on the boom. There were five brewpubs in the U.S. in 1986. Today, there are over a thousand. The number of brewpubs in Texas peaked in the late 90s, and there are fewer brewpubs in Texas now than there were 10 years ago.

Texans like drinking craft beer. Craft beer consumption is growing rapidly, while total beer consumption has stayed flat. But 92% of the craft beer consumed in Texas is brewed somewhere else.

Reforming Texas beer laws will help the Texas economy. The Texas wine industry offers a great case study. Texas wine laws were reformed in 2001. Before 2001, the Texas wine industry employed 1,800 people and had a total economic impact of $132 million. Just eight years later, the Texas wine industry employs over 9,000 people and has a total economic impact of $1.35 billion. There’s every reason to think that reforming Texas beer laws will unleash a similar wave of growth.