Brewing up trouble

Brewing up trouble

March 04
22:56 2013

If you braved the crowds at the Oak St. Drafthouse and Cocktail Parlor on Friday evening, you probably got a fresh taste of Denton courtesy of Armadillo Ale Works.

The local craft brewery debuted their first commercial batch of Quakertown Stout at the event, a beer named for a historical park in Denton.

We’re excited about the prospect of new local brews that reflect the spirit of our town. After all, other Texas beers like Shiner Bock are just as much of a symbol of this state as Longhorn steers and the Alamo.

But you probably didn’t know the legal obstacles this state presents to small brewers who want to put their own spin on your favorite suds.

Long story short, Texas has tough beer laws, but four bills about to hit the state Senate this morning might change that. Why should you care? Let’s pour some cold ones and lay this whole thing out.

When you look at Texas’ beer regulations, it’s important to understand the difference between craft breweries and brewpubs. A craft brewery is a simply a business that brews beer, while a brewpub is a restaurant or pub that brews beer and often serves it with food.

Craft breweries can’t legally sell their beer on-site or directly to the public, and instead must rely on sales to distributors who then bring the brews to the retail market.

Brewpubs, on the other hand, have the opposite problem. They can only sell their beer on-site, and not to distributors or on the retail market.

This means that brewpubs are extremely limited, both by the law and for practical reasons, in the amount of beer they can produce, since it’s only consumed at one location.

Bottom line is that it doesn’t matter how delicious their brew is, because you’ve got to go to the building to drink it.

These Texas laws seem a bit old-fashioned, and that’s because they are. They were enacted at the end of Prohibition, and intentionally kept breweries, distributors and retailers separated to avoid the emergence of monopolies in the beer market.

Trying to create a fair playing field for emerging businesses like Armadillo Ale Works is certainly noble, but that’s unfortunately not what’s happening.

For example, a brewpub in one of the states where the laws are different could sell its product in Texas at retail stores and corner the market, possibly hurting local business.

The four bills hitting the senate today would change the game completely by letting breweries sell a portion of their product on-site and directly to the public.

Brewpubs would also be allowed to produce larger amounts of beer than before, distribute some of it themselves, and sell a portion of their products in retail stores.

The importance of this issue goes way beyond good taste—there’s a real financial incentive to relax these laws.

Scott Metzger, an economics professor at the University of Texas at San Antonio, analyzed the local beer market and found that Texas’ craft brewing industry had an economic impact of $608 million in 2011.

Considering the rise in popularity of local breweries like Armadillo Ale Works, the number has probably risen since then.

In fact, the same study predicted that if Texas relaxed its beer laws, the economic impact of craft breweries and brewpubs would increase to $5.6 billion in less than eight years. That’s a lot of beer money for our state.

We’re crossing our fingers that these initiatives see the light of day, but even if they don’t, Texas beer advocates should keep on fighting. We could certainly use the business—and good beer should never be illegal.

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