• Who Can Sell Craft Beer under Current Law in Texas?
  • April 26, 2018 | Author: Jake Posey
  • Law Firm: The Posey Law Firm, P.C. - Austin Office
  • The law was in response to legislation passed during the 2013 session that allowed craft breweries to sell 5,000 barrels of beer directly from tap rooms and beer gardens with a brewpub license obtained from the Texas Alcoholic Beverage Commission. Additionally, small craft breweries were allowed to sell directly to retail stores.

    HB 3287 was passed to close what its proponents call a loophole in which large beer companies could buy small brewers that would allow them to sell their product directly, hence cutting out the distributor middle man and saving money. So far, according to the Hays Free Press, few if any of these craft brewery subsidiaries that have been bought by big alcohol firms are exceeding the 225,000 cap and thus are not being affected by the law.

    However, some in the Texas beer industry fear that HB 3287 represents the beginning of a slippery slope that may result in more regulation. The Texas Legislature could lower the 225,000-barrel limit in order to force more craft breweries to use distributors to sell beer. The law applies even if the beer is being "distributed" within a craft brewery facility and not to outside retailers.

    Texas law that governs the way beer is sold dates back from the end of Prohibition. The law divides the beer industry into three sectors, breweries, distributors, and retailers. However, the old system has proven to be an impediment to Texas' growing craft brewery sector in which small companies brew product and sell it in the same facility. Just to add to the confusion, the 2017 law grandfathered three craft breweries that have been recently purchased by larger firms, according to the Texas Tribune, exempting them from the 225,000 barrel limit. These breweries are Karbach, located in Houston and owned by Anheuser Bush, Revolver in Granbury, owned by Miller-Coors, and Independence in Austin, owned by a Heineken subsidiary, according to the Texas Tribune.