June 16, 2017
Legislation craft breweries worry will limit their ability to grow — at a time when business is booming — became law on Thursday.
House Bill 3287, which Gov. Greg Abbott didn’t veto, will force breweries that produce more than 225,000 barrels of beer a year to pay a distributor to deliver that beer — even if they’re delivering it to on-site taprooms just yards away from where it’s produced. The law went into effect immediately.
Craft breweries, which called the bill an “extortion fee” after it passed the Legislature, mounted a late, long-shot campaign to get Abbott to veto the bill. Abbott’s office did not respond to requests for comment Friday.
“It is absurd over-regulation that will slow the growth of the craft beer industry in Texas and drive capital investment in breweries to other states,” the Texas Craft Brewers Guild said in a statement after the law’s passage.
Proponents note that every Texas-based craft brewery in the state produces less than the amount stated in the law. In Texas, “the highest independent production brewery is around 60,000 barrels,” Rick Donley, president of the Beer Alliance of Texas, which represents beer distributors, said in a Friday statement.
In a separate statement on Friday, the bill’s author, Rep. Craig Goldman, R-Fort Worth, said, “House Bill 3287, now current law, makes no change to the requirements or processes of any current independent craft brewer operating in Texas.”
In addition to its own beer, any brewery owned by an outside company will have the sum of that company’s beer also count toward its yearly threshold. The company must own at least 25 percent of the brewery for this provision to take affect.
Distributor interests, which pushed for the law’s passage, say this provision is needed to stop big beer companies that gobble up independent craft brewers from avoiding paying distributors.
But three Texas breweries recently purchased by mega-breweries will be exempt from the law. Karbach in Houston, bought by Anheuser-Busch InBev; Revolver in Granbury, purchased by Miller-Coors; and Independence in Austin, bought by a Heineken-owned subsidiary — will not need to pay distributors the tax at their existing facilities.
Under the law, the three mega-breweries will also be able to expand to two new facilities each but will be required to use wholesale distributors at those facilities.
This “carve-out” provision was not extended to Colorado-based Oskar Blues, which has been producing beer in Austin since June of last year. In total, the brewery produces more than 225,000 barrels of beer at all of their facilities. They will be required to pay distributors to deliver their own kegs to their own taproom.
Disclosure: Rick Donley, the Beer Alliance of Texas and Independence Brewing Company have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.
This article originally appeared in The Texas Tribune at https://www.texastribune.org/2017/06/16/new-law-could-hinder-growth-texas-breweries-warn/.
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