Thursday, May 23, 2019

Beer-to-go passes Texas Senate as part of TABC Sunset Bill

Image: Texas Craft Brewers Guild.

Bringing years of legislative posturing to a successful end, substantial modernizations to Texas beer laws, including the ability for manufacturing craft breweries to sell beer-to-go, passed the Texas Senate Wednesday evening with a unanimous vote. Contingent upon the House concurring and the Governor’s signature on the bill, beer-to-go sales are expected to begin September 1, 2019.

“This legislation represents the most comprehensive and positive reform of the Texas Alcoholic Beverage Code (TABC) in a generation, while serving the entire industry from the manufacturer down to the consumer,” says Charles Vallhonrat, executive director of the Texas Craft Brewers Guild. “Brewers will see reduced regulation, the elimination of redundant licensing, and the ability to get product to market faster. Distributors and retailers will see a stronger market with even greater brand choice. And most importantly, consumers will enjoy the fruit of these improvements, including the ability to buy beer-to-go from their favorite brewery.”

Texas is currently the only state in the entire country to prohibit manufacturing breweries from selling beer-to-go. State Representative Eddie Rodriguez (D-Austin) and State Senator Dawn Buckingham (R-Lakeway) set out to change that this session by authoring companion bills HB 672 and SB 312, respectively. After both bills stalled in committee without being granted a hearing, the authors successfully attached beer-to-go amendments to the broader reforms of the TABC Sunset Bill, narrowly passing the House on April 25 before yesterday’s passage in the Senate.

Unanimous passage of both the beer-to-go amendment and the overall Sunset Bill in the Senate came after a stakeholder agreement was reached between the Texas Craft Brewers Guild, the Beer Alliance of Texas (BAT), and the Wholesale Beer Distributors of Texas (WBDT) compromising to reduce the per person beer-to-go limit from two cases to one case per day. Texas craft brewers owe a debt of gratitude to Sen. Brian Birdwell, Sen. Dawn Buckingham, Rep. Eddie Rodriguez, and Rep. Chris Paddie for their work bringing the industry, and in turn, the legislature, to consensus behind beer-to-go and other key aspects of the larger Sunset bill.

“For the first time in Texas, you will be able to take a little bit of your favorite craft beer home from a brewery to share with friends,” says Sen. Buckingham. “This is a huge win for craft beer enthusiasts and also for the tourism it brings. This legislation will help Texans celebrate our great products and share them with the world!”

While not codified in the bill itself, the three trade groups also agreed in writing to a 12-year moratorium on lobbying to raise or lower the allowable malt beverage barrelage caps currently in code to ensure stability in the market and security in business models.

“This enshrines some of our most important rights and lets brewers plan their businesses without the fear of capricious policy change at the hands of other industry stakeholders,” says Adam DeBower, legislative committee chair for the Texas Craft Brewers Guild and co-founder of Austin Beerworks.

Some of the modernizations to Texas beer laws in the TABC Sunset Bill include:

  • Harmonization of “Beer” (currently specified in the code as a malt beverage under 5% ABV) and “Ale” (over 5% ABV) into the single category of Malt Beverage. Eliminating this old-fashioned distinction allows for permit consolidation for manufacturers and one set of rules for marketing practices, storage, taxation, reporting, etc. rather than today’s disparate rules for the two categories.
  • Adoption of the lower, “Beer” excise tax for all malt beverages. This harmonization will result in an excise tax reduction for craft brewers currently paying the “Ale” excise tax on beers in their portfolios over 5%.
  • Self-distributing breweries gain the right to have out-of-county warehouses for malt beverages which will allow them to serve greater areas of the state. Prior to this change, out-of-county warehousing of Ale (over 5%) has been prohibited.
  • Comprehensive label approval reform so the federal COLA (Certificate of Label Approval) is accepted on the state level (as is currently allowed for wine and spirits in Texas, but not malt beverages). This streamlining will allow brewers to get fresh beer to market faster by reducing long wait times.

These reforms are poised to go into effect between 2019 and 2021. Texas craft brewers have been advocating for beer-to-go and other reforms contained in the Sunset Bill for over a decade. The movement to #FixTexasBeerLaws gained steam in the run up to the 86th Legislature with the formation of the Texas Craft Brewers Guild’s political action committee, CraftPAC. Overwhelming grassroots advocacy led to over 15,000 petition signatures in favor of beer-to-go and thousands of Texans reaching out to their legislators directly via calls, emails, and social media to demand progress on this critical issue. This victory belongs to the thousands of Texans who have fought so hard for this moment.

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