Texas Lawmakers Pave Way for Stronger Craft Beer Industry

Posted by on May 21, 2013 in News | Comments Off on Texas Lawmakers Pave Way for Stronger Craft Beer Industry

Contributing Writer—Austin Business Journal

It’s bottoms up for craft beer brewers in Texas after the House passed a package of bills Monday to help create a more robust craft beer marketplace.

Four bills filed by State Sen. Kevin Eltife, R-Tyler, were passed: Senate Bill 515, SB 516, SB 517 and SB 518. SB 639, filed by State Sen. John Carona, R-Dallas, also passed. The bills collectively provide a new approach to help grow the expanding craft beer industry and update several business practices and regulatory issues in the Alcoholic Beverage Code, according to the Beer Alliance of Texas.

“The passage of this important legislation will benefit the economy as well as bring regulatory certainty and market access to various sectors of the malt beverage industry,” said BAT President Rick Donley. “Craft beer makers and brewpub owners will now be able to produce, market and sell greater quantities of product to Texas consumers, and, importantly, add to greater employment in the craft brew sector.”

The five bills now wait for the governor’s signature before becoming law.

Texas beer, distilled spirits and wine have been sold through a three-tier system that’s been in place since the repeal of Prohibition in the early 1930s. Powerful industry stakeholders have preserved the status quo until this session provided an opportunity for change thanks to agreement among the majority of stakeholders and a concerted effort by lawmakers such as Eltife, Carona and State Sen. Leticia Van de Putte, D-San Antonio, to update the industry.

Craft beer has managed annual double-digit growth for the last decade throughout the U.S. in spite of a stagnant economic environment. Texas’ craft beer brewers have benefited from this rising tide, and Texas cities boast of renowned breweries doing good business,such as Live Oak Brewing Co. in Austin, Deep Ellum Brewing Co. in Dallas, Blue Star Brewing Co. in San Antonio and Saint Arnold Brewing Co. in Houston.

But Texas’ 59 licensed breweries and brewpubs and an estimated $608 million of economic impact in 2011, according to an economic study commissioned by the Texas Craft Brewers Guild in 2012, pales in comparison to California’s 268 breweries and brewpubs and an estimated $3 billion economic impact, said Scott Metzger, owner of San Antonio-based Freetail Brewing Co. and an economics professor at the University of Texas at San Antonio, who authored the study.

Texas’ independent craft brewery industry could generate an economic impact of $5.6 billion annually within a decade — while adding 52,000 jobs — if its development could resemble that of Texas’ wine industry after it underwent reform several years ago, the study estimates.

“We believe these new laws adhere to the state’s longstanding ‘three tier’ regulatory model, while exploring new marketing practices and allowing new technologies to better serve the interests of Texas retailers and consumers of malt beverages,” Donley said.