Saint Arnold Goes To Austin

I mentioned this previously on Kuff's World, but now I can present to you the official unveiling of the effort by Saint Arnold and other Texas microbrewers to change the law in Texas to give them the same rights as wineries. Here's the press release.

A coalition of Texas craft breweries and beer lovers, Friends of Texas Microbreweries, today launched a campaign to allow small Texas breweries to sell directly to patrons. Currently, the Texas Alcohol and Beverage Code requires microbreweries to sell only to distributors and retailers, which puts Texas craft breweries at a disadvantage to those in other states where sales direct to customers are allowed.

"We can no longer ignore the fact that 14 out of 19 microbreweries have failed in Texas in part because current regulations disadvantage microbrewing small businesses," said Saint Arnold founder Brock Wagner. "This common-sense proposal will allow Texas microbrewers to compete with out-of-state microbrewers on a level playing field."

In 2003, Texas voters overwhelmingly approved Proposition 11, which changed the Texas Alcohol and Beverage Code to allow Texas wineries to sell limited quantities of their beverages directly to patrons. Friends of Texas Microbreweries is proposing a similar change for microbreweries, which would allow on-premise sales of no more than 5,000 barrels of ale and malt liquor annually.

"It has been three years since Texas voters clearly signaled they support common sense beverage laws," said Fritz Rahr, founder of Rahr & Sons Brewing Company in Fort Worth. "It's time Texas craft brewers offered the same customer-friendly advantages that Texas wineries already have."

For those who (like me) can't recall Prop 11 offhand, here's a little background. First, from the Austin Chronicle endorsement of the measure.

Proposition 11: Allow wineries in dry counties to market their wares. About half the wineries in Texas (a couple of dozen) operate in "dry" counties that don't allow direct sale (or even free samples) of liquor, hampering economic development. We're being asked to fix that from above, in the constitution. Were they breweries or distilleries, which can locate anywhere, we wouldn't care, but since wineries are more geographically limited, we're willing to give 'em a pass. YES

Their only quibble was with it being a Constitutional amendment. As far as I know, the microbrewers are seeking a legislative solution, so there's no issue there.

And from the Texas Farm Bureau.

PROPOSITION 11: Allowing wineries to sell wine for consumption on or off premises.

Explanation: Under present provisions of the Constitution, the Texas wine industry is controlled by a combination of state and local laws. The legislature is authorized to regulate the manufacture, sale, possession, and transportation of intoxicating liquors. It is also required to provide local options to qualified voters in various governmental entities concerning the sale of alcohol.

This proposed amendment would enable the legislature to enact laws and direct the Alcoholic Beverage Commission, or its successor, to set policies for all wineries in the state, regardless of whether the winery is located in an area in which the sale of wine has or has not been authorized by local option.

The proposed amendment would authorize properly permitted wineries to manufacture and sell wine for consumption on or off the winery premises.

Wineries could also offer free wine for tasting on the premises. The enabling legislation requires that the wine must be manufactured in Texas and contain at least 75 percent by volume of fermented juice of grapes or other fruit grown in Texas.

The crux of the issue is being able to sell directly to customers. Here are the relevant laws from the Alcoholic Beverages Code. For wineries:

Sec. 16.01. AUTHORIZED ACTIVITIES. (a) Except as provided by Section 16.011, the holder of a winery permit may:

(1) manufacture, bottle, label, and package wine containing not more than 24 percent alcohol by volume;

(2) manufacture and import grape brandy for fortifying purposes only and to be used only on his licensed premises;

(3) sell wine in this state to or buy wine from permit holders authorized to purchase and sell wine, including holders of wholesaler's permits, winery permits, and wine bottler's permits;

(4) sell wine to ultimate consumers:
(A) for consumption on the winery premises; or
(B) in unbroken packages for off-premises consumption in an amount not to exceed 35,000 gallons annually;

(5) sell the wine outside this state to qualified persons;

(6) blend wines; and

(7) dispense free wine for consumption on the winery premises.

And for breweries:

Sec. 12.01. AUTHORIZED ACTIVITIES. The holder of a brewer's per­mit may:

(1) manufacture, bottle, package, and label malt liquor;

(2) import ale and malt liquor acquired from a holder of a nonresident brewer's permit;

(3) sell the ale and malt liquor only to wholesale permit holders in this state or to qualified persons outside the state; and

(4) dispense ale and malt liquor for consumption on the premises.

Naturally, this effort comes with its own blog. You'll be seeing some activity from various Texas bloggers on this as well, since beer is an issue that's close to all of our hearts. Evan of the PerryVsWorld blog is the force behind that site and the one who drew me into this. Like him, I'm excited about the possibility of making something good happen. Stay tuned for more on this as we navigate our way through the legislative session.

UPDATE: More details from the Saint Arnold Goes To Austin blog.

Posted by Charles Kuffner on December 08, 2006 to That's our Lege | TrackBack