Open Letter to Senator Carona

Have someone proofread next time

Agree all in all though. I feel like vomiting any time I see one of his campaign ads on my commute.

 

I love the idea Eric, i would reach out to Open the Taps and see hwo they can help make this a push. I support all changes you are suggesting.

 

If I can chime in, you have some factual inaccuracies in your letter that I think are important.

On #2. There is nothing stopping a Texas Brewery from opening a restaurant at their brewery. Saint Arnold, for example, has a restaurant at theirs.

On #3. Federal label approval is not required for any brewery who doesn't ship their beer out of state (which is most Texas breweries). So, for many Texas brewers, TABC Label Approval is the only label approval they get. I don't see how TABC label approval gives out-of-state breweries a competitive advantage, they are required to go through the same TABC label approval process as an in-state brewery.

In regards to #1, even as a craft brewer I support some form of a three-tier system. What I don't support is a strict, rigid three-tier system. There are many more changes I'd like to see made with the Alcoholic Beverage Code, but completely dismantling the three-tier system is not one of them.

Scott

 

I still think without Carona authoring SB639 and placating the 2nd tier of Distributors, we'd still be where we were last year. Without compromise the bills would have not passed.... and while gray area of direct payment of distributor to brewery may have been closed by this bill, it also left the door open for non-direct monetary incentives (promotion, equipment, etc...)

So leave the dude alone. More pavement will be moved in 2014 partially thanks to his efforts.... unpopular as they may be.

The biggest areas that now need improvement are local zoning for brewpubs and tiered/festival licensing for out of state breweries. As the industry expands... you can add production limits to that list.

Just my opinion.

 

Since the new laws passed... production breweries under 225,000 barrels (so, all of them besides BMC) can serve up to 5,000 barrels of beer for on-site consumption to the ultimate consumer. Before only free "samples" were allowed to be served. St. Arnold has a restaurant. Other breweries choose to just chose to have taprooms.

Zoning is a big issue with this right now, however... so Austin production breweries still have to follow the "free sample with glass" routine until that is resolved.

 

Breweries can actually self-distribute to a certain amount.

Austin Beerworks is the largest self-distributed brewery in the state, iirc. They're between 5k - 10k barrels/year. (512) also self distributes and Jester King did so locally until recently.... just for a few examples.

There are limits to how much you can self-distribute, but I'm too lazy to look them up right now.

 

News to me that they distribute here (hint: they don't).

Use Oskar Blues, Breckenridge, and Abita instead.

 

My guess is he meant LAZY magnolia brewery(which i think their southern pecan is god awful)

 

Hogshead also doesn't have food (I've been there) AND doesn't distro in Texas, lol.

 

Avery does if you want another example of food + distro's to Texas. I think Stone does as well

 

This is a little over my head, but where does shipping beer to Texas fit into this, if at all... Like ordering online, or shipping beer through FedEx or what not. I know you can, but I would like to be able to order online...

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Im guessing it doesnt really fit in at all, since this is mainly focused on helping Texas breweries flourish, which I support!

 

Well, only in regards to the Manufacturer-Distributor relationship, what if A-B & MillerCoors decided they wanted to own their own distribution system? A lot of craft beer gets moved around on the back of trucks that are filled with A-B & MillerCoors products. A saying I've been hearing a lot more of recently is "It's A-B/MillerCoors beer that pays for the truck to distribute craft beer" and it many senses it is true. If the mega-brewers owned their own distribution systems, then craft beer would take a hit (note: in some states, A-B DOES in fact own their own distribution system, and some competitors have emerged. Megabrewers owning their own distro networks isn't an Armageddon scenario, but it would put a big dent in Texas Craft beer overnight that would take quite a while to recover from).

As Lutter pointed out, small breweries (those under 125,000 barrels, so every TX brewery but A-B, MillerCoors, and Shiner) aren't required to sign-up with a distributor. They can self-distribute up to 40,000 barrels. I've yet to be presented with a scenario in which someone thinks they can self-distribute more than that (but that isn't to say it can't be done). I support some form of a three-tier system, but these are the kind of exceptions to it that make it work. A rigid three-tier system doesn't work with the modern beer world with literally thousands of suppliers with multiple product lines. These exceptions need to exist and be continually updated to keep up with the changing market.

A bigger deal with three-tier, which I also support, is preventing large players from owning the retail market. Three-tier not only deals witht he Manufacturer-Distributor relationship, but also the relationship between Manufacturers, Distributors and Retailers. These are important as they allow retailers to remain independent and offer whatever beers they want (and ultimately, the market tells them). The alternative would be tied-house arrangements where you'd go to a "Bud Bar" where all they served was Bud. At the Miller Bar, you only got Miller. There would still be craft-centric multi-tap bars, but they would much more scarce.

This is all just a brief nutshell of the case, and this could easily be a multi-page discussion (or multi-hour, if we were sitting next to each other at a pub). I'll try to chime in where I can.

 

Eric, if you don't mind me asking, what are you trying to accomplish with this letter? I'd recommend talking to the folks at Open The Taps, who are one of the best organized consumer groups I've encountered in terms of mobilization and lobbying at the Capitol. My personal opinion is that a letter writing campaign isn't going to have much effect and that you are better off working with a group like OTT to get your message across.

Full disclosure: while myself and my brewery cohorts may have overlapping interests as consumers, sometimes they are different. Make no mistake: I represent the interests of my industry, which may not always perfectly align with the interests of consumers. Historically they have, but they might not always (not saying I know of some issue where we are going to be divided, just pointing out the dividing line between a group like OTT and the Texas Craft Brewers Guild).

 

Yep, if you're wanting to make an impact, Dallas doesn't have much of an OTT presence compared to Houston/Austin. Beefing that up locally would be a huge boost. Eric - you should totally step up to the plate and take charge.

 

Eric, to directly answer your questions:

1. What steps can be taken to make it easier for new breweries to get started and thrive in Texas?

We just took a bunch of steps by passing laws to allow breweries to sell directly to consumers at their tap room and to allow brewpubs to distribute. These took effect in June of this year.

2. Why is it that breweries in Texas do not have onsite brewpubs like Russian River or Three Floyd's?

Until this past June, it didn't make sense for them to do so, because they couldn't sell beer at them. Now they can. Saint Arnold has a restaurant, Karbach is including one in their expansion plans, Community in Dallas is building a cool new tap room just to name a few things. The law has been in effect 2 days short of 6 months. Give it some time.

3. What are the differences between TABC's label approval system and other better working systems?

In my opinion there isn't a problem with TABC's label approval system. The only problem right now is that they are understaffed and have a massive influx of new labels with all the breweries coming to Texas and new Texas breweries opening. It will get sorted out. Patience.

4. What is the next step for breweries and consumers in Texas?

What do you want the next step to be? Another good reason to talk to a group like Open The Taps.

Scott