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From the “Capitalism is scary!” files

If you’ve been following the brewpubs’ efforts to get a bill passed that would allow them to sell their wares elsewhere in Texas then this Statesman story doesn’t bring much new to you. What it does do is cleanly capture the absurdity of the arguments against giving brewpubs and microbreweries greater access to the market in Texas.

The [Wholesale Beer Distributors of Texas] is very protective of the state’s post-Prohibition alcoholic beverage laws, which divide the industry among breweries, distributors and retailers and bar anyone from owning businesses in more than one category.

That means anyone wanting to sell outside of his own premises to consumers has to go through the distributors.

There are minor exceptions, including the legalization of brewpubs in Texas in 1993. Texas regulators consider brewpubs to be retailers, even though they also brew beer.

It’s a tiny industry. In 2009, Texas brewpubs produced 12,755 barrels of beer and grossed $31.9 million in sales, according to a report commissioned by Texas Beer Freedom.

But Mike McKinney, a lobbyist with the Wholesale Beer Distributors, says too many exceptions might invite industry giants to lobby the Legislature to change the system.

“We don’t want Anheuser-Busch to own a chain of grocery stores or nightclubs,” McKinney said.

[…]

Both sides cite the Texas wine market, which allows wineries to sell both to consumers at the vineyards and to wholesalers for distribution in stores, in their arguments about HB 660.

McKinney says the wine market is “chaotic.”

Scott Metzger, an economist who also owns Freetail Brewing Co. in San Antonio, says the number of Texas wineries jumped from 46 to 181 after the Legislature loosened the regulatory restraints.

[…]

The key to passing HB 660 is the House Committee for Licensing and Administrative Procedures, where the bill was pending while both sides lobby behind the scenes.

The chairman, state Rep. Mike “Tuffy” Hamilton, R-Mauriceville , echoes McKinney’s concerns that the bill could “open the door” to unintended consequences.

You mean like something resembling a free market? Oh noes! Whatever will we do? Very simply, the distributors have a nice little setup for themselves that guarantees them eternal profits, and they don’t want that to change in any way. It’s all about them trying to maintain a status quo that serves their interests a lot better than anyone else’s. Brewed and Never Battered has more.

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One Comment

  1. Ross says:

    One of the main goals of many capitalists is to convince the government to enact laws and regulations that raise the barriers to entry and make competition less stiff, thus increasing profits for the early entrants.

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