Beer 'for here' or 'to-go'? A primer on Texas laws for what breweries can (and cannot) do

Navigating the world of craft beer laws in Texas can be tough. Brewpubs can fill growlers, but breweries cannot. Crowlers were OK, then not OK, then OK again.

Some ales aren't even considered "beer," according to Texas law.

We enlisted the help of two experts to help us sort out what is what when it comes to the Wild West of Texas beer legislation. Charles Vallhonrat is the executive director of the Texas Craft Brewers Guild. Angel Tomasino is a lawyer whose firm focuses on alcohol law, specifically working with beer brewers and retailers.

If we're talking about take-out beer, what's the latest for to-go beer in Texas? Why can I fill up a growler from some taprooms, but not others?

Charles Vallhonrat: Texas law recognizes brewpubs and manufacturing breweries as different licenses and different parts of the three-tiered system. A brewpub can sell beer to-go, like other retail establishments. So, you can get a growler filled at a brewpub, or buy packaged beer to take home.

Manufacturing breweries can grow their businesses significantly larger than a brewpub, but the small carve-out of retail-like capabilities they enjoy are limited to allowing visitors to buy beer for consumption in the brewery's taproom only. Legislatively, most manufacturing breweries in Texas have been fighting for the right to sell beer to-go over many of the recent legislative sessions. However, this change to the Texas alcoholic beverage code is directly opposed by the distributor tier. This legislative battle will continue into the next legislative session in 2019.

Angel Tomasino: Currently, brewers are not allowed to sell their beer for off-premise consumption. In Texas, we have two upper-tier brewer licenses -- because we license "beer" and "ale" separately, as far as manufacturing goes. A brewpub is considered a retailer, and they can sell beer to-go, like your growler fill. Under Texas law, a "manufacturer" makes "beer." A "brewer" makes "ale." Most folks probably don't know what kind of license their brewery holds; that's why it can be confusing when a brewpub sells beer to-go, but a neighboring brewery cannot.

What is that "beer" vs. "ale" difference?

AT: It's by ABV (alcohol by volume). "Beer" is less than 4 percent ABV, while "ale" is over 4 percent. That distinction has been in our beverage code for many years.

HB 3287, which forces brewers of a certain size to pay a distributor to serve beer in their own taprooms, recently reshaped the legal landscape. Why are brewers having to pay to pour their own beer?

AT: That bill changed how the cap on taproom sales is defined. It used to be that if a brewery brewed less than 225,000 barrels per year, it could sell from their taproom. With HB 3287, the 225,000 cap includes not just the brewery, but all other breweries owned by the permit holder. So, for Oskar Blues in Austin, the volume from their Colorado brewery gets included in the cap. There was a carve-out in the bill that allows taprooms for breweries that were open prior to Feb. 1, 2017, but the carve-out still mandates that the brewery purchase their taproom beer from a distributor.

CV: There are only a few breweries that will have to pay a distributor to sell their own beer in their taproom, but the fact that the situation exists for even a small number of players is disconcerting. A brewery that falls into this narrow category of state statute literally has to pay a distributor, even though the distributor never touches the beer. When they move a beer from the cellar cold room in the brewery to the taproom cold room and tap it, they have to pay a distributor.

Have these new regulations had a chilling impact on new breweries in Texas?

CV: Ultimately, HB 3287 directly impacts very few breweries immediately. However, all breweries have lost part of the overall valuation of their business due to the law. Now, outside investors, banks and other sources of capital will see the growth limit on brewery taprooms and take that into account when determining a brewery's valuation. Additionally, the uncertain nature of the Texas alcoholic beverage code, which has had policy dictated by the distributor tier for decades, will continue to scare off investors, and this legislative session made that more clear than ever.

Thirsty for more? Check out all our beer coverage here.

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