Texas Republicans, Democrats Support Beer-to-Go Sales from Craft Breweries in 2018 Party Platforms

At State Conventions, Parties Show Bipartisan Support For Granting Manufacturing Breweries the Same Rights as Breweries in 49 Other States


Screen Shot 2018-06-24 at 3.38.49 PMAs the 2018 Midterm Elections and 2019 Legislative Session approach, Texas Democrats and Republicans have included planks in their party platforms supporting expanded rights for Texas craft breweries. As the only state in the country to disallow beer-to-go sales from manufacturing craft breweries, Texas Republicans, holding their convention in San Antonio June 14-16, and Democrats, holding theirs in Fort Worth June 21-23, have agreed that this needs to change.

“The craft brewing industry has a $4.54 Billion impact on the Texas economy and represents a growing manufacturing industry for our state,” Texas Craft Brewers Guild Executive Director Charles Vallhonrat said. “This is a Bipartisan issue. While both parties may have different approaches, they share clear, unequivocal support for beer-to-go sales directly from manufacturing craft breweries. This is a right exercised by breweries in 49 other states, and one we strongly hope to see extended to Texans in the 2019 Legislative Session. That both parties are expressing support for this issue in their platforms demonstrates the bipartisan grassroots momentum around this issue leading into next session.”

Under current Texas law, wineries, distilleries, and brewpubs are allowed to sell some quantity of their products to-go from their tasting rooms, leaving manufacturing craft breweries as the only local makers in the Texas alcohol beverage industry who do not have the right to sell packaged products to a tasting room patron for take-home enjoyment. This discrepancy robs Texas craft breweries of a valuable revenue stream and an important brand building opportunity.

While Texas boasts over 250 breweries and brewpubs, the state still ranks 46th when it comes to breweries-per-capita. Texas craft brewers believe that modernizations to the Texas Three-Tier System, including allowing beer-to-go sales from craft breweries, will lead to more entrepreneurism, economic development, tourism, and quality manufacturing and small business jobs.

Texans who want to show support for beer-to-go sales can do so by signing our online petition.

Republican Platform Language:
34. Three-Tier Alcohol System: We urge the Texas Legislature to adopt legislation eliminating the mandatory three-tier system of alcohol production, distribution, and retail. Texans should have the freedom to purchase alcohol directly from manufacturers, just as any other retail product.

Democratic Platform Language: 

(Jobs Section) Democrats support modernizing the TABC’s 3 tier system because Texas’s craft breweries create jobs, encourage tourism, grow the economy, revitalize communities and add incremental tax revenues. Democrats support legislation allowing craft breweries to enjoy the same rights as their competitors in every state that allow them to sell and market their products directly from their breweries to consumers for take-home consumption, and ensure fairness in distribution across the state.

Why beer middlemen stand in the way of craft beer legislation that would help Texas thrive

Manhole.jpgCollectively, small Texas craft breweries make up only a 3% share of the total beer marketplace in Texas. While these businesses serve as incredibly outsized sources for economic impact, jobs, and industrial revitalization, there’s no denying that 3% is a sliver of the overall beer industry pie. Meanwhile, a disproportionate amount of the nation’s largest beer wholesalers call Texas home. Protected from competition and fueled by consolidation, these wholesalers hold duopolistic control of nearly every Texas market, and monopolistic control of individual brewery rights inside of those territories.

It’s illegal for a brewery to sell its territory rights to a distributor in Texas. Instead, all of the brand equity a brewery builds must be given away for free to a middleman that now holds exclusive distribution rights for the life of the business unless extraordinary cause for termination can be demonstrated. Meanwhile, distributors are free to profit from the sale and exchange of brewery rights with one another if they decide its in their own best interest to do so.

Top Distributors for Political Contributions. 2013-2016. Courtesy of the Texas Tribune.

You may ask yourself why Texas beer wholesalers spend so much time fervently opposing positive craft brewery legislation (not to mention pushing insidious anti-craft legislation and misinformation of their own), given Texas craft beer’s growing, but still disproportionally small, market share. The answer is clear. When beer wholesalers lobby against common sense, consumer-friendly legislation that will lead to more jobs, tourism, and economic impact for Texas and its craft beer industry, maintaining unparalleled economic protectionism is the chief motivation.

The Texas Alcoholic Beverage Code was largely crafted in a time when a few powerful breweries (now owned internationally) could exercise control over mom-and-pop retailers and bootstrap wholesalers with small territories and limited portfolios caught in the middle.

Today, these same laws have become a protection racket to preserve the multigenerational wealth of a small handful of politically connected families in this state. Meanwhile, hundreds of persevering craft breweries operate under some of the most restrictive laws in the country in a time where consolidation has led to two effective choices for wholesale partners in each market.

Craft breweries want the Three-Tier System to work for everyone—not just wealthy wholesalers. It’s in the Texas Legislature’s power to ensure that a more equitable, prosperous path forward begins in 2019. We need passionate craft beer enthusiasts across Texas to join the cause.