E-Malt.com News article: USA, TX: Brewers in Texas caught up in a contradictory situation because of the state laws

Owners of the popular Eatsie Boys food truck will cut the ribbon on their 8th Wonder Brewery, Chron.com reported on June, 20.

They recently took possession of a brand-new brewhouse and three shiny tanks that will produce craft beers like Alternate Universe, Hopston and Intellectuale.

But any of those brews can’t be on tap at their restaurant. Texas law forbids it.

"What a joke is that?" asked Ryan Soroka, a founding partner of both operations. " ... It makes no sense that we're doing things the way we have to do them."

As they have the past three legislative sessions, lawmakers will likely debate changes in the Texas alcoholic beverage code when they meet in 2013. Previous efforts have stalled, but a state senator from San Antonio has already formed a study group to look into the issues and has begun meeting with stakeholders.

And an advocacy group formed last year has pledged to add the voices of beer consumers to the discussion and to push for some changes that could benefit the 8th Wonder/Eatsie Boys team.

Ideally, Soroka said this week, he and his partners would have opened in a single location as a brewpub, a restaurant where it is legal to make and sell beer in addition to food. That was the original business plan.

But because they also want to package beer for sale off-site - which the partners see as a more viable business venture - state law forced a drastic change to that plan.

In Texas, brewers must decide whether they want to be a shipping brewery, á la Saint Arnold or Anheuser-Busch, which are prohibited from selling their own products directly to consumers, or a retail brewpub, which cannot distribute to bars, stores and other restaurants.

The catch for 8th Wonder as a shipping brewery is that holders of a Texas brewer's license are barred from selling alcohol on-site or at any other establishment they own. Licensees are forbidden even from giving away samples at any retail site they own.

So for now, at least, Soroka and his business partners will make beer in an old warehouse east of downtown and run a separate cafe.

That means two leases, two renovation projects, two places to staff and keep up.

"We don't want to put up a stink," Soroka said. "But at the same time, we want people to know the environment we're in."

The two-pronged plan might not even be feasible, he said, if not for the fact that Eatsie Boys has developed a growing and increasingly loyal customer base with its food truck over the past 18 months. Starting a restaurant from scratch might not be worth the risk.

Ted Duchesne, president of Open The Taps, a consumer group with more than 400 members, said one of Open The Taps' priorities will be to see the brewpub law amended so that Texas companies will have the option, available in some other states, to make and distribute beer and operate a brewpub simultaneously.

"In an ideal world, they'd open as a brewpub and be able to distribute their beer," Duchesne said. " ... I think it's crazy that you can't let them do their business plan like they'd wanted."

Keith Strama, an Austin attorney and lobbyist for the Wholesale Beer Distributors of Texas, said that group would support some law changes, but nothing that would undermine the state's three-tier system in which, with few exceptions, manufacturers sell only to distributors who in turn have exclusive rights to sell to retailers.

Strama said the system gives smaller breweries access to the marketplace and has helped many of them open successfully in recent years.

"If they're brewing good beer," he said, "the opportunities are incredible in this state."

Soroka said, should the brewpub law be amended, he could see 8th Wonder and Eatsie Boys consolidating under one roof. For the time being, the partners are working within the confines of the law.


22 June, 2012