Texas House Bill 3389 Could Hurt Texas Brewers
This is a post from Flood Distribution, posted with permission:
Among a handful of significant bills advancing the cause of Texas craft brewing this legislative session, a distributor-backed piece of legislation has been submitted which would severely limit the continued growth (and in some cases, continued existence) of small, independently-distributing breweries.
House Bill 3389, submitted by Rep. Senfronia Thompson of Harris County, would reduce the volume of beer a brewery is allowed to distribute on their own from 40,000 barrels a year to a mere 5,000. It’s worth noting that the limit was lowered less than two years ago, down from 75,000 barrels.
A number of successful Texas craft breweries are self-distributed – Live Oak, Austin Beerworks, (512), Buffalo Bayou, 8th Wonder and Peticolas, to name a few – and many of these are already producing far more beer than the new barrel cap would allow. They have all invested in the considerable infrastructure and manpower needed for self-distribution, and have grown and flourished using this model.
Were this legislation to pass, it would effectively strong-arm these breweries into greatly reducing the size of their operation, or into working with a distributor. Given that distribution contracts in Texas are binding for the lifetime of the brewery, and that territorial rights must be given away for free by the brewery, but then may be bought and sold for profit at the discretion of their distributor, this all seems like a pretty shit deal.
In an ideal world, such transparently greedy power-grabs would never stand a chance of becoming law. We strongly encourage that anyone as concerned as we are about this hugely damaging, small-business crippling insult of a bill express their concern to their state representative, or perhaps inquire with its sponsor what she hopes to accomplish with such legislation.
The full text of House Bill 3389:
Rep. Thompson’s contact info: