Lone Star State Wants Lone-Owned Taprooms

Austin Ray

THE GIST
Texas lawmakers are debating a bill that, if passed, would force a number of breweries in the state to shut down their taprooms. The bill in question, HB 3287, would impact breweries that have financial ties to other brewing concerns. The proposed legislation was introduced as a means of clarifying the current rules in place, which were originally written to give independent craft brewers more latitude outside the traditional three-tier system. However, the law was made complicated when companies like Anheuser-Busch InBev and MillerCoors began investing in said independent companies.

WHY IT MATTERS
Ostensibly, this is a simple change to the law. Under the status quo, brewers that produce no more than 225,000 barrels annually at a single location are permitted to sell beer directly to consumers at taprooms. As proposed, however, that 225,000-BBLs cap would instead apply to “all premises owned directly or indirectly” by the license holder, as well as any affiliate or subsidiary businesses. Which means: if a hypothetical brewery in Texas produces less than 225,000 BBLs of beer per year, but is hypothetically owned by AB InBev, this business would be operating past the cap per its parent company’s output, and would thus not be able to run a taproom.
 
Of course, we don’t need to play the hypothetical game here. There are at least three companies in Texas that would be affected by this bill. The obvious two are Revolver Brewing, of Granbury, which was bought out by MillerCoors in August of last year, and Karbach, of Houston, which was acquired by AB InBev a few months later. There is at least one other company, though, outside the umbrella of AB InBev and MillerCoors that would be impacted. Oskar Blues, too, which is headquartered in Colorado, but opened a brewery and taproom in Austin last summer, would have to shut down its taproom component, given its own financial entanglements with other companies.
 
This would have two obvious ramifications. Locally, there would likely be job loss at these breweries as taproom staff gets downsized. Perhaps more importantly, though, from a global perspective, it might prevent out-of-state breweries from expanding into Texas, as Oskar Blues did, and preventing the job creation that comes with that. Oskar Blues founder Dale Katechis said as much, telling Austin 360 the company likely wouldn’t have even considered moving to the state had this bill been in the works at the time.
 
There have been rumblings, though, as reported by Beer Business Daily, that some small, independent breweries are actually in favor of the bill, as it’s meant to rein in multinational corporate leviathans like AB InBev and MillerCoors. Such a situation would make strange bedfellows of brewers and distributors. The latter group’s typical support of these types of initiatives is usually at odds with the brewing industry’s opposition. If we're to ascribe an industry representative voice to a single organization though, the Texas Craft Brewers Guild seems to be on the side one would expect.
 
“This approach is like using a sledgehammer to kill a fly,” Josh Hare, owner of Hops & Grain and board chairman of the guild, said during a committee hearing, according to Austin 360. “We believe there is a better path for protecting small businesses in Texas without immediately placing a ceiling on their growth potential.”

—Dave Eisenberg

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Oskar Blues, other Texas breweries at risk of losing current taprooms with proposed law [Austin 360]