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CraftPAC

Time again for craft brewers to get their legislative hopes up

We’ve seen this movie before. I hope for a better ending, but I’m keeping those hopes modest.

Texas is the only state in the country that prohibits some breweries from selling six-packs, bottles and growlers of beer to-go, but a pair of bills filed for consideration during the 86th legislative session aim to change that.

Sen. Dawn Buckingham (R-Lakeway) and Rep. Eddie Rodriguez (D-Austin) introduced companion bills SB 312 and HB 672, respectively, which would allow manufacturing breweries to sell beer to drinkers for off-premise consumption.

[…]

In 2015, North Texas’ Deep Ellum Brewing Co. and the now-defunct Grapevine Craft Brewery sued the Texas Alcohol and Beverage Commission over the issue and lost. Earlier this year, the court ruled in favor of the TABC, citing the potential impact to Texas’ three-tier system, which aims to avoid conflicts of interest between alcohol manufacturers, distributors and retailers.

In the decision, however, the judge noted that off-premise sales were granted to distilleries and wineries by the legislature, not the courts. That and the support shown for to-go sales during both the Republican and Democratic conventions in 2018 is giving the Texas beer industry hope that the legislation will pass.

I noted the lawsuit back in 2015, but missed that it had been decided. The story here has always been that the beer distributors’ lobbyists are mightier than everyone else. Maybe this year it will be different – hope springs eternal – but it is always safer to bet on the house. Alas.

A switch to cider

Some craft brewing news of note.

The taps, they are a-changin’ at Town in City Brewery, where owner Justin Engle has decided to pause beer brewing and focus instead on creating hard cider.

The folks at Town in City began building their reputation in cider about a year ago, when they launched Houston Cider Co., in a shared space with the beer-brewing operation. But this month, Engle said he decided not to renew his brewer’s permit when it expires.

“We were given legal advice that if we were to renew our brewer’s permit prior to the TABC Sunset hearings, that we may be stuck for two years in old TABC rules,” Engle said of the current fight between brewers and legislators to modernize state laws for alcohol sales. “If the new rules are passed, it would still take us two years to get to the next rules. So we decided not to take that gamble, and so we’re not going to renew right now.”

But that doesn’t mean things at the brewery on Cavalcade near the Heights are going quiet.

On Dec. 18, Houston Cider Co. took a leap that Town in City never attempted: It began canning. Now, three of the cidery’s mainstays — Dry, Cherry and Rosé — are available at Whole Foods and a few other shops across the city.

Cider production began outpacing beer production at the Heights brewery back in August, Engle said.

Still, cider isn’t exactly a sure thing — especially not when compared with the ever-growing popularity of craft beer. According to Drizly, an eCommerce marketplace for alcoholic beverages, only 7.1 percent of sales in the beer market went to cider in October, the most recent month for which data are available. At that same time, 26.7 percent of sales were for craft beer.

But there’s another way to read that: Cider isn’t as crowded a space.

See here for some background on the ongoing legislative battle, which begins again in earnest as the Lege reconvenes. I note that one of the two incumbents that CraftPAC had been supporting as of that January publication date was defeated in November (Tony Dale of HD136). Sure hope they backed some other winners, or the slog will be harder than it needs to be. As for cider, the story notes that there are only eight such breweries in the state, with Houston Cider Company being the only one in our fair city (there is another one based in Dickinson that is the nearest neighbor). Here’s a Leader News story from January about their debut.

I blogged about Lerprechaun Cider Company, the first local cider company, back in 2011; they had a product relaunch in 2015 and according to a footnote at the end of this 2017 Houstonia story were never brewing here and had stopped distributing here. Their domain has expired, which I think tells you all you need to know. That Houstonia story was about Permann’s Cider Company, which as of last July was on track to have a taproom downtown. Not sure where that stands – they have a Facebook page that’s had five posts since February and a Twitter account that hasn’t tweeted since last August. I guess this is a longwinded way of saying that I wish the Houston Cider Company good luck, and that hopefully some day they’ll be able to brew beer again, too.

Microbreweries organize again

About time.

Craft brewers are asking beer fans to put their money where their thirst is.

Six weeks before state primary elections, the Texas Craft Brewers Guild on Monday launched a political action committee to raise money and awareness to challenge “archaic, anti-competitive beer laws” it says are holding back an industry poised for dramatic growth.

The PAC already has raised more than $40,000 from among its approximately 250 brewery members, with the largest individual donations coming from the owners of Austin Beerworks and Saint Arnold, Live Oak and Deep Ellum Brewing Cos. Much of the money raised by the new CraftPAC will go to support state legislative candidates who support the brewers’ agenda, guild executive director Charles Vallhonrat said

CraftPAC so far has donated $1,000 each to two incumbent legislators – one Democrat and one Republican – in the Austin area.

“We intend to influence where we can,” Vallhonrat said.

Here’s the CraftPAC finance report for January. The legislators in question are Reps. Eddie Rodriguez and Tony Dale, though I’m sure there will be more. It’s one thing to give money to a friendly incumbent in a friendly district, but it’s something else altogether to contribute to someone who’s looking to take out an enemy. We’ll see how seriously they decide to play.

Brewbound has more details:

Initially, CraftPAC will focus on legalizing of to-go sales from production brewery taprooms, which Texas law currently outlaws. Although the state’s manufacturing breweries are not allowed to sell beer for off-premise consumption, the state’s brewpubs, wineries and distilleries are allowed to sell their products to-go.

Speaking to Brewbound, Texas Craft Brewers Guild Executive Director Charles Vallhonrat said Texas distributors have had a financial edge over brewers after giving more than $18 million in political contributions to lawmakers. CraftPAC, he added, is a way to level the playing field.

“We want to be on the same field,” he said. “We know that they have big bats, but we need to be on the same field to say we’re in the game.”

CraftPAC board chairman and Austin Beerworks co-founder Adam DeBower added that Texas’ brewers haven’t had a voice in the legislature since 2013, when several lawmakers who supported brewers retired or moved on.

“We don’t have any champions left,” he said.

[…]

Vallhonrat said last year’s passage of House Bill 3287 — which put tighter restrictions on how beer that is sold for on-premise consumption at brewery taprooms — was the catalyst to the formation of CraftPAC.

“The blow we received from 3287 showed the overwhelming power that the distributors wield,” he said. “That they could influence a bill that absolutely no brewery supported, and they could go around saying this was for the protection of breweries and convince the Legislature and get it passed, that really demonstrated what we’re fighting against.”

In 3287, Texas lawmakers changed the way the state’s barrel cap is calculated, adding production across multiple brewing operations rather than from individual facilities. Now, breweries making more than 225,000 combined barrels annually will be required to repurchase their own product from a wholesaler in order to continue selling beer for on-premise consumption in their taprooms.

In the announcement of CraftPAC, the Guild also cited the 2013 passage of Senate Bill 639, which prohibits breweries from selling their distribution rights to wholesalers, and led to a lawsuit that will be decided by the Texas Supreme Court.

Vallhonrat told Brewbound that CraftPAC will also work to make other “common sense updates” to Texas’ alcohol code such as eliminating the distinction between “ale” and “beer.” According to the Texas code, an ale is a beer above five percent ABV while a beer is under five percent ABV. Such distinctions are costly, and add market confusion and work for brewery owners, he argued.

DeBower added that CraftPAC would work to equalize licensing differences between breweries and brewpubs. Currently, brewers are required to have a manufacturer’s license while brewpubs receive retail license and are afforded different privileges, such as off-premise sales.

If you’ve read this blog for any length of time, you know what I think of this state’s ridiculous, anachronistic, and extremely consumer-unfriendly beer laws. (If you’re new here, you can now probably guess.) I support all of this, of course, but I’m shaking my head a little because this is at least the third separate effort to organize and whip up public opinion in favor of modernizing the beer codes. There was a bipartisan blog-based effort in 2007, of which I was a part, and the now-dormant Open The Taps group that helped spearhead the 2013 laws that represented the one step forward we have taken. The experience since then shows that a movement can never take anything for granted – what has been done can be undone, or at least undermined. I wish CraftPAC all the success – their Facebook page is here; give it a Like – and I especially wish that they stay around and keep at it well after they do have success.