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Texas craft breweries in for a fight

May 8, 2017

Texas: House tightens reins on Texas breweries

Source: Houston Chronicle

By Ronnie Crocker

May 6, 2017

The Texas House on Saturday voted overwhelming to place new constraints on craft breweries that grow beyond a set size or become acquired by a larger beer company.

Supporters of House Bill 3287 also fought back efforts to amend the legislation to give craft brewers the right to sell some beer on site for consumers to take home – something the smaller brewers have tried to secure for years.

HB 3287, blasted as anti-competitive by critics, is opposed by the Texas Craft Brewers Guild and Anheuser-Busch InBev as well as pro-business groups and a conservative Texas think tank.

“Now we prepare for the Senate battle,” guild executive director Charles Vallhonrat said after the vote.

A 2013 package of laws gave breweries that produce less than 225,000 barrels of beer annually to sell up to 5,000 barrels directly to customers, who must drink the beer in the taproom before they leave.

On-site sales

As originally written, House Bill 3287 would have extended the prohibition against on-site sales to any brewery that is acquired by another company that collectively exceeds that limit.

That group includes Houston’s Karbach Brewing Co., acquired last fall by A-B InBev, which makes many of millions of barrels of Budweiser and other products across the globe.

A revision to the bill allows Karbach and the other larger breweries to continue to operate taprooms, but it would force them to sell their beer to a distributor and then buy it back for sale to the public.

The brewers say the bill would discourage investors and will hurt their ability to grow.

The only beneficiary, they say, are the distributors who already exert near-total control over how beer gets from producers to retailers.

Two other amendments that failed to pass targeted the wholesalers directly. One would have forced distributors, once they bought the beer, to take it to a warehouse before delivering it back to the brewery.

The other amendment would have forbidden distributors who merely collect their payment without touching the beer from charging more than an administrative fee.

‘Hurts no one’

The sponsor of the bill, state Rep. Craig Goldman, R-Fort Worth, opened the discussion on the House floor by asserting that his proposal actually would save craft breweries by offering protection from large multinational companies that might buy Texas breweries in the future.

“This bill hurts no one,” he said, neither craft brewers nor consumers.

Goldman also accused the Texas Craft Brewers Guild of spreading misleading information – a charge that Vallhonrat, the head of the guild, vigorously denied.

Vallhonrat called the accusations “misplaced and inaccurate.”

Rep. Jason Isaac, R-Dripping Springs, introduced the amendment that would have allowed brewers to sell some beer for off-premise consumption. He said his amendment would put brewers on par with Texas wineries and distilleries.

Goldman objected, and that amendment also was soundly defeated.

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