New “Anti-Competitive” Beer Bill Brought Before the Texas Senate

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.


1 Comment on New “Anti-Competitive” Beer Bill Brought Before the Texas Senate

  1. Hi, Senator Carona’s committee director here. Senator Carona asked me to let you know that he appreciates your thoughtful blog post and offers the following statement:

    “The outlook is bright for legislation to create new opportunities for craft brewers and brewpubs in Texas. For months we have worked to get to this point — several important pieces of legislation have been filed and placed before the public for discussion and debate. I applaud Senator Eltife, Senator Van de Putte, and the others who have brought these ideas forward.
    “My support of craft beer is well known. Pro-craft beer legislation has passed out of my committee before and will again. I have insisted on bringing stakeholders to the table, created the framework for it, and was one of the first few legislators to respond to the Open the Taps survey. The bill I filed is a step along the path to passage of comprehensive legislation. We are remiss if we do not take the long and wide view on these important provisions. Provisions such as reach back pricing, the alteration of a price by a manufacturer based on the price a distributor charges a retailer. This practice borders on price-fixing and must be addressed. But comprehensive legislation also includes a “tap room” provision, which will allow brewers to serve customers beer at their brewery, as well as legislation that will allow brewpubs to use a distributor to get their product into stores and in front of more customers.
    “As with any issue, there are many stakeholders with varying interests — this is the very reason I created working groups during the interim to begin to address these important issues. We will continue to work together, and in the end I am confident that this Session we can pass legislation beneficial to craft brewers and brewpubs.”

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