One step forward—two steps back, as they say.
Senator John Carona (R-Dallas) brought before the Texas Senate a bill that many are calling “anti-competitive.” The bill would not only prohibit brewery owners from selling distribution rights for their beer but would also make it difficult for breweries to sell their beer at different prices in different locations.
Many have come out in protest of this bill, arguing that it is even more limiting to breweries than the laws that are in place now. The Texas Craft Brewers Guild has said they are not in favor of any part of this bill. President of the Beer Alliance of Texas, Rick Donley, said the bill was “probably one of the most anti-competitive pieces of legislation” that he had ever seen.
Support for the bill comes from the Wholesale Beer Distributors of Texas who also have exclusive rights to sell beer to retailers. Attorney Keith Strama described the bill as “housekeeping,” explaining that it would help to clarify existing laws. He went on to say that Texas’ alcoholic beverage code does not really authorize the selling of distribution rights.
Presently, breweries are not allowed to sell directly to consumers or retailers but must go through wholesalers to get their beer to retailers. These distributors can pay the breweries for the rights to sell their beer which can be a large source of capital for smaller breweries looking to grow.
My thoughts on the issue are summed up in the first sentence of this post. I think it is incredibly unfair to the breweries who are already working under extremely limiting laws. As I said in my last article on the bill that the Texas Craft Brewers Guild drew up, the Texas beer industry has an economic impact of $608 million and could have an impact in the billions. This bill is just squashing all of that potential for growth, income and jobs that Texas needs. Also, the fact that this is coming from a Senator whose party claims to support small business is downright abominable.