Texas Craft Brewers Succeed Because of — Not in Spite of — Alcohol Regulations

There has been a lot of discussion about the proposed beer-to-go bills in the Texas Legislature, yet only 10 independent brewers, out of the 315 in Texas, are currently unable to sell beer-to-go with the proper license. That is because they exceed the volume cap of 10,000 barrels (equivalent to 137,770 cases of 12-ounce containers or 2.5 million pints of beer) allowing such sales.Let's add perspective to that amount of volume. My company distributes beer, including leading craft brands, to more than 3,000 licensed retail accounts in 17 Texas counties. Our largest single retail account, which is a Walmart, does not sell near the amount of volume stated above. Further, the average volume of a beer retailer in our territory is less than 4% of what state law currently allows brewers to sell before they exceed the cap.The argument that craft beer is stifled by Texas regulations is simply not supported by fact. Therefore, a valid question is, would Texans benefit by altering regulations that only affect 10 large breweries? How would this improve public policy on alcohol regulation? And, what impact would such a change have on the thousands of small retailers who might become further disadvantaged by the continuous carve-outs that craft brewers request, during each legislative session, to broaden what their license allows?My family has been distributing beer since the repeal of Prohibition. We understand the important need for a credible regulatory environment for alcohol that works for all concerned parties. We are also sensitive to the harm that can result from the lack of a sound regulatory framework. The regulatory system for beer in Texas has been challenged for decades by those who do not like the rules required of their license. The structure of the three-tier system in Texas, however, has long been respected, if not envied, by many other states. As part of that system, my company's distributor license only allows us to sell our beer to licensed retailers. Therefore, we cannot even sell to our employees.It is because of the three-tier system, state-based regulation and the model alcohol regulations in this country that the United States is the best country in the world for brewers, distributors, retailers and consumers. Many, including me, would argue that Texas is the best state in terms of alcohol regulation. Credit for that goes to generations of lawmakers who have taken the time to understand the reasons behind our regulatory system and the justification for maintaining it with sound decisions for the long-term health of that system.As previously stated, beer-to-go sales are currently available to 97% of the craft breweries in Texas. The thousands of independently owned grocery, convenience and mom-and-pop stores, which have built their businesses over time and within the alcohol laws of the state, will be hurt by allowing these large breweries to directly compete with them.The regulatory system for beer in Texas is not broken nor antiquated. It is highly successful for all participants — brewers, distributors, retailers and consumers. There is no need to amend state law. Doing so will only enhance the advantage of a very few breweries that already enjoy great success as a result of current regulations. I urge Texas lawmakers to remain cautious about routinely making adjustments to state alcohol regulations every two years, which could eventually lead to licenses being meaningless.Larry Del Papa is president of the Wholesale Beer Distributors of Texas. He wrote this column for The Dallas Morning News.  Continue reading...