Texas and Utah Breweries Take Steps to Expand Lobbying Efforts

Austin Ray
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THE GIST
Brewers in Texas and Utah are discovering that it takes more than a cogent argument to bring about legislative change. In fact, the two state guilds have concluded that to enact truly equitable policy in the face of well-financed opposition, it’s going to take a whole lot more hard cash than what they’ve been able to offer lawmakers to date.

On Monday, The Texas Monitor reported that the Texas Craft Brewers Guild is looking to launch a political action committee to increase its lobbying efforts and campaign contributions going forward. And that report comes on the heels of similar news in Utah, where, in late October, the Utah Brewers Guild unveiled its own plans to hire an executive director to spearhead its growing need for a dedicated lobbyist in its corner. The Texas effort coincides with a recent legislative loss suffered by brewers, while Utah brewers are currently in the midst of their own legal battle.

WHY IT MATTERS
The twin mobilization efforts mirror a broader trend in the industry whereby individual guilds, fed up with losing out to competing special interest groups with way more money, are now trying to work within the system. Or, to quote Peter Erickson, communications director for the Utah Brewers Guild, brewers are tired of the most “powerful voices” belonging to “the lobbyists for the mega brewers and chain retailers.” Ostensibly, then, brewers in Texas and Utah are trying to compete with those same “powerful voices.” As the old adage goes, if you can’t beat ‘em, join ‘em.

But there’s a problem. Even playing the same game, small brewers know they aren’t going to be able to match their opposition, at least financially. As Charles Vallhonrat, executive director of the Texas Craft Brewers Guild, told the Monitor, “Obviously, they are throwing tremendous amounts of money at this. Can we ever match that? No.” To that end, the Monitor reports that in the most recent session, distributors spent $1.1 million on lobbying next to the $125,000 spent by brewers, a nearly 9-to-1 spending ratio. As such, not all brewers are confident that dumping cash on their problems is enough to bury them. Says Chip McElroy, president of Live Oak in Austin:

“I think our best place to stay is in the reasonable argument arena…I think we win there. I don’t know how we can beat them in spending money.”

And it’s here where things get awfully uncomfortable. Operating in the “reasonable argument arena” yielded a brewer loss in the most recent legislative session in Texas, a loss that forces brewers of a certain size to buy their beer back from a wholesaler before re-selling it. For that matter, one need not look far to learn that that method has been yielding brewery losses all over the country for years. Meanwhile, any move toward buying politicians is likely to be snared by a competitor who already owns a much larger chunk of real estate within said politician’s war chest. This puts guilds in an obviously precarious position in which they’re unable to ignore the problem at hand, but the utility of their limited cash alone is questionable.

That’s not to say these efforts have been unsuccessful or aren’t worth pursuing. In 2014, the Georgia Craft Brewers Guild enlisted the help of a lobbyist to loosen in-state restrictions on brewery sales. A year later, brewers were able to pass the so-called “Beer Jobs Bill” (an admittedly watered down version of what was to come two years later). But the political environment is still a contentious one for brewers. Luckily for them, however, they’re used to taking their wins gradually and incrementally, rather than all at once. And so, brewers in Texas and Utah are ready to fight fire with fire, hoping their small flame might catch brush and explode.

—Dave Eisenberg