North Texans can walk into Deep Ellum Distillery in Dallas and leave with a bottle of house-made vodka. But visit its sister business, Deep Ellum Brewing Co., and you're not allowed to take a souvenir six-pack with you.
That's because of a stipulation in Texas' laws governing beer brewing -- one that two local breweries have been fighting in court since 2015.
That year, Deep Ellum Brewing Co. and Grapevine Craft Brewery sued the Texas Alcoholic Beverage Commission in hopes of gaining the ability to sell packaged beer for off-premise consumption, or in other words, to-go. But this week, a court ruled in favor of TABC, citing the potential impact to Texas' three-tier system, which aims to avoid conflicts of interest between alcohol manufacturers, distributors and retailers.
The plaintiffs argued that production breweries are treated unfairly compared to other alcohol manufacturers, such as wineries and distilleries, both of which can sell libations for drinkers to enjoy onsite, as well as bottles to-go. However, as judge Robert Pitman notes in the court order, the Texas Legislature granted the wine and spirits industries permission to so -- not the courts.
"Whether it was good governance for the legislature to grant that exemption to wineries and distilleries but not beer producers is not the question before the court," Pitman wrote. "Preventing approximately 190 retail outlets -- the purported number of alcohol producers that cannot sell for off-premise consumption -- does reduce the number of outlets selling alcohol directly to consumers and therefore is rationally related to promoting temperance."
John Reardon, founder of DEBC, was not immediately available to discuss the case, and Gary Humble, former owner of Grapevine Craft Brewery, offered no comment. It is unknown if the plaintiffs will appeal the court's decision.
If the nuances of this case seem complicated, it's because they are. Texas' alcohol laws are notoriously confusing and many in the industry have called them archaic. According to CraftPAC, a newly formed political action committee that lobbies on behalf of craft brewing interests, Texas is the only state in America that does not allow off-premise sales. CraftPAC was started in January to "champion common sense, 21st century legislative reforms," according to its website.
The issue of off-premises sales is just one brewers are battling about with TABC. In 2014, three Texas brewers sued the state's alcohol regulator over a law governing who can profit from the sale of a brewery's distribution rights. That case is headed to the Texas Supreme Court.
Plaintiffs in both cases argue the laws in question uniquely benefit alcohol distributors or wholesalers. The former even went as far as presenting testimony that alleged regulators were influenced by their relationships with distributors.
An analysis of campaign contributions by the Texas Tribune and Texans for Public Justice earlier in 2017 found that the beer distributors and executives spent upwards of $6 million supporting political candidates and action committees. The top recipients: Gov. Greg Abbott ($1,478,821), Lt. Gov. Dan Patrick ($688,840) and the Associated Republicans of Texas Campaign Fund ($518,176).
Leaders of TABC came under fire last year for using taxpayer money to attend lavish conferences, many sponsored by the alcohol industry. Executive director Sherry Cook resigned during an ethic investigation into the incidents.
In the March 20 court order, judge Pitman dismissed Reardon's and Humble's allegations as "lay opinion, at best, and, more likely, pure speculation from non-legislators ... as to the inner-workings of the legislative process."
TABC offered no comment, as is standard for pending litigation, according to public information officer Chris Porter.
