Legislative Update: Craft Beer Bill Summaries

 

Craft Beer Bill Summaries (as passed by the Senate Committee on Business and Commerce):

Committee Substitute to Senate Bill (CSSB) 515 raises a brewpub’s annual production limit to 10,000 barrels and allows for a limited self-distribution permit.  The restrictions are in the amount that a brewpub may self-distribute to holders of retail licenses and permits to 2500 barrels per year per license or 1000 barrels per brewpub location.  A brewpub operator would have no limit on how much beer they are allowed to sell (of their 10,000 barrels) through a beer distributor.

 

CSSB 516 and CSSB 517 are substantially similar but 516 addresses ale (regulated by chapter 12 of the code) while 517 addresses beer (regulated by chapter 62 of the code).  Both bills raise the cap for craft brewers to 125,000 barrels per year and they both create a new self-distribution permit for craft brewers up to a total of 40,000 barrels (including both beer and ale).  Both bills also create a new permit of out-of-state craft brewers to self-distribute equal to in-state craft brewers.

 

CSSB 518 allows for craft brewers whose annual production does not exceed 225,000 barrel of beer and ale per year to sell beer and ale directly to consumers for on-premise responsible consumption up to 5000 barrels per year.  (NOTE: OTT has advocated for sales to consumer for off-premise consumption but this provision was vociferously opposed by both distributor groups as well as the retail association.)

 

CSSB 639 codifies a TABC regulation relating to “reach-back” pricing and restricts a brewer from selling their territorial brand rights, but clarifies that brewers are allowed to enter into contractual agreements that could be construed as governing ordinary business transactions, including agreements concerning allowances, rebates, refunds, services, capacity, advertising funds, promotional funds, or sports marketing funds.  CSSB 639 also includes language to mutually tie these five bills together (CSSBs 515-518 and 639).  (NOTE: OTT understands that at least a few craft brewers are not pleased with the limitation on selling their brand territorial distribution rights.)

 

5 thoughts on “Legislative Update: Craft Beer Bill Summaries

  1. I really hate the stranglehold the Distributors have on the craft breweries and ultimately on the consumers.

    So we can now purchase beer at the brewery but we must consume it on the premise. For a typical brewery tour, we currently get 3 large glasses of beer that we have to finish in 3-5 hours. So we will now be able to purchase more beer at the brewery but must drink it before the brewery closes?

    Does that mean the brewery can be setup like a pub with extended hours?

  2. You are correct when you say that you must drink before the brewery closes, as it stands right now. However, it will be up to the individual brewery to decide their operating hours and how they want to sell on-premise. This is still quite early in the process, with much that can change. Our lobbyists are working hard to get to-go sales included this session. 

  3. It seems to me a logical way to show support for off-site consumption would be would be to point out the #1 goal of consuming responsibly. I know it sounds silly, but if you want me to enjoy craft beers which may only be available to me at the brewery (instead of a local retailer) I shouldn’t be forced to try it all in one sitting. Kind of defeats the purpose of wanting to fully enjoy each brew. Legally bind me to drink on-premise and it’s like encouraging a brew-tour binge.

  4. On the one hand it seems like there was some good progress made. On the other hand it seems like microbreweries got hosed big time when it comes to distribution. Ouch, that one hurts! How did brewpubs get such a good deal out of it? How did the distributors get such a golden deal out of it? Why did breweries get stuck with such bad deals on distribution? Money, that’s how.

    Again, whatever small progress may have been made on some fronts, it seems we’re back to the same old politics of whoever has the deepest pockets to lobby gets to write their own rules and leaves the little guy out. For small start up breweries, this legislative session helped a small amount on one end but on another end brought a gigantic world of pain.

    I tell you what, I don’t know how these things work, but if these bills could be killed in the Senate or by the Governor, I would rather they all get killed rather than 639 go through.

    Leslie, John and the rest of the team, thanks for all your hard work, however it seems the good ole boy network of deep pockets has more of a say in politics than the people. Nothing new, but it still sucks.

  5. Yes, thank you Leslie, John and the OTT team! It’s never easy breaking down barriers and I really appreciate your dedication to the cause. Having lived in other states that do not have ridiculous blue laws, I find the posturing by the politicians in Austin frustrating; especially when you consider the pandering to special interests (Distributors, Big Breweries, etc.) by those politicians.

Leave a Reply

Your email address will not be published. Required fields are marked *