E-Malt.com News article: US, TX: Bill to help Texas small brewers dies in senate

The latest effort by Texas' small craft brewers to bolster their business by letting people leave tours with a six-pack or two is dead, Houston Chronicle reported on May, 26.

The final, unresolvable conflict was a last-minute objection by AB InBev, the world's largest beer company. The Belgium-based conglomerate, which brews Budweiser, Bud Light, Michelob and other high-volume beers in breweries in Houston and elsewhere, opposed a provision in the bill that would have denied large manufacturers the ability to offer the take-home beers.

AB InBev does not host regular tours.

A spokesman for Lt. Gov. David Dewhurst said on May, 26 that time simply ran out on House Bill 602, which was never offered for a vote by the end of the day Wednesday, the deadline for the Senate to consider bills approved by the other chamber.

While saying he'd never heard Dewhurst announce he would not formally recognize such an offer, as required per Senate rules, spokesman Mike Walz said the lieutenant governor had made clear he wanted the bill to create a "level playing field" that did not favor "a select few" brewers.

The bill would have allowed companies that produce no more than 75,000 barrels annually to charge varying rates for tours. Visitors could then take home up to 144 ounces of packaged beer, depending on how much they'd paid. The wording of the bill was designed to satisfy distributors, who in Texas have nearly exclusive rights to move beer from breweries to retailers.

Even in its limited form, the bill would have had a big impact in terms of marketing, brewers said.

Brad Farbstein, owner of Real Ale Brewing Co. in Blanco, said letting people take home beers after a tour, and share them with friends, would create new customers for stores, bars and restaurants, while adding tax revenue and allowing small breweries to expand.

This session, both major distributors' groups voiced public support for the bill. But Keith Strama, attorney representing the politically powerful Wholesale Beer Distributors of Texas, said the group would not agree to it without the cap, since the bill should target small breweries seeking to build market share. Helping major manufacturers such as AB InBev that collectively command more than 90 percent of the market, he added, "was not the purpose of this bill."

State Sen. John Whitmire, D-Houston, who sat on the Senate committee that approved the bill with no amendments, said on May, 20 that he was prepared to offer one removing the cap should the bill come up for a vote. He also said he'd heard Dewhurst planned to hold up the bill unless such an amendment was added.

A spokesman for Senate sponsor Eddie Lucio, D-Brownsville, did not return a call for comment before deadline.

Campaign contribution records, compiled by Texas Tribune from Texas Ethics Commission filings, show that since 2000 Dewhurst and Whitmire have received $275,000 and $70,000, respectively, from distributors and their representatives, including John Nau, who owns Houston-based Silver Eagle Distributing, one of AB InBev's largest distributors.

Saint Arnold Brewing Co. founder Brock Wagner, one of the driving forces behind this and two previous legislative efforts, said he was "annoyed" at the continued failure to pass a bill that had no other organized opposition.

"We just got outgunned," he said.

"The laws in Texas need to be changed," he said. "Right now, the laws in Texas are biased against in-state craft breweries. It makes no sense."

Wagner and Farbstein said the brewers will try again in 2013.



27 May, 2011