If you heard my testimony before the Licensing and Administrative Procedures Committee back on March 22, 2011 (or if you’ve been a regular reader of this blog), you might recall me talking about how the 3-Tier System is really the 5-Tier System. The beer industry in Texas isn’t just brewer, wholesaler, retailer and it is an affront to forget the 4th and 5th Tiers – consumers and the state itself, respectively – in a discussion on statutory reform.
I’m happy to see that the 4th Tier, the consumer, has organized to have a voice in the political arena. First of all, with due respect to members of the Wholesale Tier who seem to believe the world revolves around them, it needs to be acknowledged that the 4th Tier is the most important tier. Without beer drinkers, there is no beer for brewers to produce. There are no deliveries for wholesalers to make. There is nothing for retailers to sell. There is nothing for the state to regulate and tax.
The beer industry does not exist to be a piggy bank for bloated distribution companies who wish there was simply a commodity called “beer” in a non-descript white can – after all, that would make their jobs a whole lot easier. The beer industry exists because consumers want beer. And though it pains some industry members, it is becoming increasingly obvious that beer consumers want a diverse, well maintained selection of craft beer. Sorry lifelong Bud Light salesman, times have changed. Either board the train or get steamrolled by it.
Open The Taps is an organization founded by a group of Houston craft beer drinkers (that I’ve had the pleasure of meeting over the years: great folks, I can vouch) aimed at giving the 4th Tier an organized voice at the Capitol. I look forward to seeing how their fundraising efforts go and their impact on Texas lawmakers leading up to and during the next legislative session. Along with my organization, Texas Beer Freedom (which represents Texas Craft Breweries and Brewpubs), the increased awareness for the design for statutory reform will reach a point where it can no longer be ignored. You know I’ll be talking more on this topic here on my blog as the effort gets rolling again.
As one of the founding volunteers of Texas Beer Freedom, Andy Liddell, said before the Licensing and Administrative Procedures Committee:
“Alcohol regulation is supposed to protect the consumer. Well, unfortunately all our laws are doing is preventing me, the consumer, from getting the products I really want.”
Drink Beer, Save Texas.
Long time, no write. unfortunately, I have nothing to report on HB 660. I’ll let you figure out the rest there.
I do, however, have great news on HB 2436 and its companion bill, SB 1575. If you remember, this is a microbrewery direct sales bill that would allow you to buy pints at places like Real Ale, Live Oak, (512), St. Arnold, etc. Both bills will be heard in front of their respective committees tomorrow April 19, so get off your tails and get to the Capitol to show your support!
Viva Texas Beer Freedom!
On this day in 1933, the first brews were legally sold following prohibition – a movement that, at its end, saw even its original proponents lobbying to repeal it. As it turned out, Prohibition did more damage than good – creating the niche for highly organized crime and spawning some of the most notorious criminal masterminds in American history. We learned a valuable lesson from Prohibition: restricting people’s right to choose is a bad thing; and that typically the people pushing hardest for restrictions are those who stand to gain the most from it (in the case of Prohibition, the gangsters and racketeers).
Today, our state still struggles with the lingering effects of Prohibition – most notably in the form of laws that restrict our smallest and most innovative brewers from reaching the marketplace. Brewpubs are not allowed to sell to wholesalers. Production brewers are not allowed to sell you a six-pack at the brewery. Out-of-state brewers are treated preferentially by Texas alcoholic beverage code. And none of this in the name of consumer protection or the welfare of the state – but rather the protection and welfare of a handful of multi-million dollar businesses who seek to build the biggest and best walls in order to defend their castles.
A significant number of the wholesale-tier members, who have traditionally been against the reforms we seek, have had the same revelation as John D. Rockefeller Jr., Pauline Sabin and the Women’s Moderation Union had in the late 1920s: they would best be served having a part in the future of the alcohol industry, rather than protecting a system which serves to enrich the organized few.
We were proud to stand beside members of The Beer Alliance and the Licensed Beverage Distributors of Texas in support of HB 660 before the House Licensing Administrative Procedures Committee. Support from the wholesale-tier was echoed by endorsements from the Texas Restaurant Association (Retail-tier), in addition to countless consumers. Every tier of the beer industry is in favor of our bill (and recall, there are actually five tiers when you count consumers and the state itself) – even the state, which stands to gain much-needed tax revenue as its small breweries grow and the overwhelming majority of Texans agree it is good policy. Please, make another call to your State Representative and members of the LAP Committee and ask them to support HB 660 on this day, the celebration of American’s right to choose.
Around the Web
Not that they didn’t believe us, but the Austin American-Statesmen fact checked statements made by Rep. Villarreal (HB 660’s Author). The verdict: the Representative is rated as true!
Thanks to everyone who came out to Uncle Billy’s Lake Travis yesterday for the HB 660 benefit concert. We had a great time with Slow Train, Mike and the Moonpies and Two Tons of Steel. I didn’t catch who ended up winning, but someone ended up with a hoodie, shirt, cap and 2008, 2009 and 2010 Vertical of La Muerta that I donated to the silent auction. Congrats and enjoy! (Sadly, that only leaves me with two or three more bottles of 2008 La Muerta!)
Some great press today as the HB 660 effort makes the front page of the Austin-American Statesman with this story.
The Statesman also has a good photo gallery from yesterday’s event here.
And our good friends at BeerTownAustin have a recap our efforts to Drink Beer and Save Texas here.
The battle isn’t over, keep those calls going into the committee!
Today the House Licensing and Administrative Procedures Committee is busy hearing a litany of gambling bills. interestingly, this article came out today with Senate State Affairs Committee Chair Robert Duncan quoted saying gambling bills have no chance. Lt. Governor Dewherst has said he’ll funnel all gambling bills through Duncan’s committee, which pretty much assures they are all DOA. (Which raises the question – what’s the point of going through the motions?)
Hopefully, “going through the motions” with no point isn’t what we’ve been doing with HB 660. It is up to Chairman Hamilton to decide whether or not to bring the bill (and the same is true with HB 602) back up for a vote. Keep those calls, letters and emails up encouraging his support of HB 660. A little advice I got from someone who works in politics: one handwritten letter is worth 20 emails. Something to keep in mind.
Come Party with us this Sunday to Support HB 660
This Sunday we’re going to party at the new Uncle Billy’s on Lake Travis with Two Tons of Steel, Mike and the Moonpies and Slowtrain in support of HB 660. Buy your tickets now and save $5 at the door!
***First, a programming note: I’ll be in San Francisco for the Craft Brewers Conference until Sunday – so updates may be sporadic until then.***
By now, you all know that yesterday House Bills 602 and 660 were heard before the Licensing and Administrative Procedures Committee.
Briefly on HB 602: No one expressed opposition, not even the Wholesale Beer Distributors of Texas, who have opposed the bill in the past. There is some forthcoming compromise on that bill that apparently everyone is happy with and it looks like you’ll be able to take beer home after a brewery tour later this year.
HB 660 had a tremendous number of supporters, and the roll of names read into the record as supporters of the bill was long and impressive. Among those in support but not wishing to testify were a number of beer distributors and the Texas Restaurant Association.
As you may have read, we’ve gained the support of the other tiers through thoughtful discussion with interested stakeholders. Beer distributors were concerned about self-distribution for a business type that already sells directly to the consumer, and we understand their points. Self-distribution has been removed from the bill. We also lowered the annual limit for aggregate production to 15,000 barrels per brewpub. A number we are very comfortable with. I’m pleased that we were able to come up with a bill that all three tiers really like.
We did have one person oppose our bill, however. Keith Strama, representing the Wholesale Beer Distributors of Texas, stood up and presented a semi-coherent rambling about how we should not allow these kind of changes to the code because… well, just because. Seriously. Strama did present some other barely comprehensible argument, which was called onto the rug in short order by Committee Vice-chair Chente Quintanilla of El Paso. Video of the entire hearing, which you can find here, proves quite entertaining. Strama should have just stuck to “Uh… just because” – turns out that was a better argument than the one he was trying to make.
A real comedic gem came when Mr. Strama suggested that HB 602 already accomplishes what brewpubs are trying to achieve by allowing us to simply change our license to a brewery and charge for tours and give away beer. Yes, that is MUCH simpler than just allowing brewpubs to sell to distributors.
Most interesting, to me, was that not a single industry member of the WBDT (of which many were present in the room) submitted themselves in opposition. It’s not hard to oppose in these kinds of hearings, you just fill out a card with your name, occupation, and your position. Why wouldn’t WBDT members bother to oppose? Could it be… they aren’t opposed?!??!?!?! This begs the question, who does the WBDT really represent? Certainly not their members, a handful of which have approached me about carrying my brand should the bill pass.
The conclusion seems obvious: the WBDT’s attorneys and lobbyists represent only themselves. They have to ensure they have a job in two years when this bill inevitably comes back up if it is defeated this time. These guys don’t care about brewers, that much is obvious. But now it is becoming clear they don’t even care about the distributors they supposedly represent, or the state’s best interested.
The writing is on the wall. The WBDT’s era of rule is coming crashing down around them as they have failed to keep up with changing times. They continue to lose members, fed up with the stuck-in-the-mud thinking of Keith Strama and his bosses, and they continue to lose influence.
With the WBDT exposed, the ball is back in our court. We have one or two weeks at the most to earn the votes of the committee, after that it will be too late to advance this session. Right now I think we have 4 votes. We need 5. Time to turn up the pressure and continue to urge members of the committee that this the right thing to do. Continue those calls and emails (I’ll post a sample follow up letter tomorrow).
Around the Web
Lee Nichols has a great story on the hearing for the Austin Chronicle. His article is also one of the last chances you’ll have to see my beard, which I said goodbye to this morning.
The blog, I Love Beer, has a great post on yesterday’s hearing.
And of course the Texas Tribune was covering the story as well.
And lastly, here is a written version of my testimony from yesterday in the event you were curious.
Members of the committee, thank you for allowing me the opportunity to speak on the matter of House Bill 660. My name is Scott Metzger, Founder and Chief Executive Officer of Freetail Brewing Company in San Antonio; Adjunct Professor of Economics at the University of Texas – San Antonio; and Executive Director of the non-profit organization, Texas Beer Freedom.
This bill is specifically about Texas brewpubs, establishments that brew artisanal, hand-crafted beer for sale to consumers on the premises of the brewery. Currently, the state’s alcoholic beverage code restricts brewpubs from participating in the well-established three-tier system and does not allow them to provide their products to the state’s wholesale tier for resale to the retail tier. This statutory restriction has significantly stunted the growth of the brewpub industry in Texas: while the number of brewpubs in the United States has gone from 5 in 1986 to over 1,000 today – we actually have fewer brewpubs in Texas today than we had in the 1990s.
The code as it is currently written not only restricts our state’s small businesses from growing but also provides a wide-open market for out-of-state producers of craft beer to come in and sell their products without the worry of competition from local brewpubs. I have a wealth of economic data to support the need for legislation like HB 660, but the argument is best demonstrated by this simple fact: brewpubs from California, Colorado, Delaware and Oregon are selling tremendous quantities of beer within our state’s borders while Texas brewpubs are shut out from competing in their own backyard. Put simply: currently, the best option for my brewery to expand the reach of our products in Texas is to move our brewery out of Texas. As a proud native Texan, that is a painful statement to make about any of our businesses.
In our great state, it is important to remember that we really have a five-tier system. In addition to the producers, wholesalers and retailers – we must not forget the consumers and the state itself. In the case of HB 660, all five tiers stand to benefit from this bill’s passage.
The benefits to brewpubs, the producers of the beer, are self-evident: the bill would enable them to grow beyond their existing walls. I was commissioned to perform an Economic Impact Study on behalf of the Texas Craft Brewers Guild to estimate the economic contribution of our industry today and in the event of statutory reforms such as HB 660. The study found the potential for more than $680 million of new economic activity, 6,800 new jobs and $192 million of new annual payrolls created.
The benefits extend to the wholesale tier. Today, the beer industry is declining in the aggregate with the exception of one sector: craft beer. Wholesalers are continuously expanding their portfolios to include artisan, hand-crafted beers like the ones Texas brewpubs make. HB 660’s passage would provide wholesalers with a wider-range of Texan products to offer. Speaking only for my brewery, since HB 660 has been introduced I’ve been approached by wholesalers from the Wholesale Beer Distributors of Texas and The Beer Alliance to discuss the possibility of carrying my brand. Quite simply, wholesalers want my beer.
Retailers stand to benefit by focusing their product offerings on high-quality local products. Every year, the National Restaurant Association releases its Top Trends. And for the last few years, “Local Food and Beer” has been at or near the top of that list. Thinking local is no longer a progressive ideal; it has become the standard way of life for Texans.
Consumers benefit by gaining a wider access to the products they desire. At my brewery, I am constantly flooded with calls and emails from folks around the state who want to know where to buy my beer. For Texans in Beaumont, El Paso or Garland, my answer of “only in San Antonio at my brewery” is disheartening.
Perhaps most timely is the benefit to the fifth tier, by which I mean Texas itself. The Texas Craft Brewers Guild Economic Impact Study concluded that statutory reforms like HB 660 can create upwards of $57 million of annual tax revenues for the state, without raising or creating any new taxes. That is enough for 1,300 teachers and firefighters or policemen. And $57 million is just a start. That number is based on the beer industry replicating the Texas Wine Industry’s growth following statutory reform in 2003. When we consider that Texans consume 19 times more beer than wine, we can see that we are only beginning to scratch the surface.
In closing, I ask you to support HB 660 not only for the brewpubs it will help grow; but for the wholesalers who will have an expanded range of supply, retailers who will be able to feature Texas-made products, consumers who will have access to the products they desire, and the tax revenue that you will be able to use in funding our state’s future.
Thank you, and I look forward to answering any questions you may have.
It is extremely rare to find me setting my alarm for 5:30am. It is even more rare to find me waking before a 5:30am alarm in anticipation of the day ahead. It just isn’t the lifestyle I lead. But today I opened my eyes and glanced at the alarm clock to find 5:15. Normally my reaction would be to go back to sleep, but not today. Today there was only one thought on the front of my brain:
Why hello there, Today. Hope you’re ready for an ass kicking.
Seventy days have passed since my first entry to this blog on the topic of HB 660. Exactly one half of the legislative session. A lot has happened. As you will see later today, a substitute bill has been drafted for HB 660 – a compromise we have reached with other parties in exchange for their support. The bill isn’t as big of a win as it previously was, but it is still a huge victory for Texas craft brewers, wholesalers, retailers, and consumers. It still generates tremendous benefits for the state of Texas and it’s ailing coffers. This is still a bill we cannot afford to not pass.
You know our position is sound. Today we show our legislators that position. Today we hold our line against those who would attempt to derail us in their own selfish interest. Today, we win the first battle.
HB 602 will also be heard by the House Licensing and Administrative Procedures Committee today. I don’t know which bill will go first, or even when. It will likely be between 8-10am, but it is possible we could be adjourned until the afternoon. It all depends on how other hearings go and which order they call them in. You can listen (and maybe watch) the hearings live today here.
Day 70 of the Legislative session. In other words, the end of the first half. Tomorrow, on Day 71, I will join some of my colleagues in testifying before the House Licensing and Administrative Procedures committee on behalf of HB 660 (I’ll post a copy of my testimony either tomorrow or Wednesday).
Those of you who have read this blog know my position, and you know it is strong. Today I make another plea for you to all members of the Committee to demand they support HB 660. It’s good for everyone in the 3-tier system, it’s good for consumers, and it’s good for Texas. We can simply not afford to not pass this bill.
Thank you all for the support so far and for the well wishes. Tomorrow is the first step in the new world of Texas Craft Beer.
Bus Trip to Austin
For those of you in San Antonio, I hope you Blue Star and Freetail on the bus to Austin for lobby day. Joey, owner of Blue Star, will be on board to answer questions to and from. Here is the itinerary:
7:30 Breakfast at Blue Star
8:00 Bus leaves for Austin
9:30: Arrival in Austin, Lobby Day Debrief (you’ll get a packet that has talking points and the Reps to go talk to)
10:00-12:30: Visits with State Reps
1:00: Group photo, Lunch at Uncle Billy’s
2:00: Bus departs for San Antonio (with a keg of Blue Star and Freetail beer on board)
There is no cost to help us in this fight. Please email firstname.lastname@example.org to RSVP.
Texas Craft Beer lovers, now is the time to make your voice heard.
House Bill’s 660 and 602 have been schedule for Public Hearing in the Licensing and Administrative Procedures committee at 8:05 Tuesday March 22. (Note, neither bill may be heard at 8:05, that is when the hearing starts of which we are on the agenda).
The future of both bills are now in the hands of the committee. If you haven’t make your voice heard yet, now is the time. If you have made your voice heard, now is the time to remind them of their need to support these bills.
Tuesday is also Texas Beer Freedom lobby day. I don’t have the info buttoned up yet, I hope to have it tomorrow. If you can, please come to the Capitol on Tuesday to help show your support.
Here we go.
Happy St. Patrick’s day everyone! I hope you are all are enjoying craft beer on this festive day, and please remember to do so responsibly.
We had a great event at the Capitol last night that one staffer told me was the best attended reception at the Capitol in her memory in the 8 years she’s worked there. Wow!
We spoke with a handful of fantastic and curious Legislators, including Reps. Aliseda, Allen, Berman, Chisum, Geren, Gonzales, Isaacs, Phillips, Price, Shelton, Torres, and of course our bills’ author, Mike Villarreal. A couple of them even said they’d be speaking directly with Rep. Villarreal very soon about signing up as sponsors. Awesome!
Tomorrow I’m going to have news for San Antonians on how to help us next Tuesday for the official HB 660 lobby day (and also what those of you in other cities can do too).
Around the Web
W. Scott Bailey, who I can attest drinks great beer, has a good story in the SA Business Journal that ran prior to yesterday’s event.
Eric Braun, who also drinks great beer, has a similar story on MYSA.com.