Beer Law Bitter for Craft Brewers

New legislation that governs beer sales in Texas is now law, over the strong objections of the state's craft beer industry.  House Bill 3287 took effect last week when Gov. Greg Abbott declined to veto it by the deadline.  The law requires breweries that produce more than 225,000 barrels of beer per year to pay distributors, even to deliver beer served in-house on their own premises.  "If you reach that level, you're now forced to pay a tax on a product that never leaves your facility," says Ryan Soroka, president and co-founder of Houston's 8th Wonder Brewery.

Other Houston craft breweries, like St. Arnold's, also opposed HB 3287 when it was before the legislature, but the bill passed with strong support in the House and Senate.  Proponents of the law say it's designed to keep breweries from merging to increase their sales without paying distributors.  But Soroka claims it will only hurt the state's beer business by discouraging growth among smaller breweries.  “Existing brewers who had plans for expansion, they’re already backing off,” he says.  “And I promise you that out of state brewers who had plans to come to Texas, we’re not going to see that investment coming in here anymore.”

Proponents of HB 3287 also note that all current Texas-based craft breweries are well below the law’s 225,000-barrel threshold, meaning it will have no practical effect on them.  But Soroka believes it’s just another way Texas is over-regulating brewers.  “We’re the only state in the nation that if you come to a brewery, you can’t take beer with you to go,” he says.  “That just limits growth on the grocery store shelves, on the bar and restaurant tabs, and on the distributors’ trucks and warehouses.”

HB 3287 took effect immediately after the governor’s veto deadline passed, but the fight against it still may not be over.  “I think you’re going to see some more respectful activity from the brewers,” says Soroka.  “And hopefully the industry backs us, and we can get these laws changed in our favor.”

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