Texas Brewers Battle Over How Beer is Distributed

Two years ago, the state’s craft beer industry underwent a massive reform with the passage of five bills during the 2013 legislative session. The changes included allowing breweries to make and sell their own beer and market their products to off-site retailers. The changes culminated in the largest overhaul of the beer industry since the Texas Legislature legalized brewpubs in 1993.

Among the legislation that passed was Senate Bill 639. It was part of a series of bills aimed at forging a compromise between microbrewers and distributors. At the center of the measure was Texas’ three-tiered beer distribution system, made up of producers, suppliers and sellers. If you sell beer on-site, you’re becoming all three tiers together: a producer, supplier and seller.

While there’s various legislation currently pending in Austin to make further changes to the state’s craft beer industry, distribution rights remain an ongoing battle.

Brewers say they want lawmakers to reduce limits on distribution and marketing. On the other hand, distributors see craft brewers as trying to break a carefully constructed deal on distribution rights that hurts their retail customers.

We discuss the issue with Rick Donley, president of the Beer Alliance of Texas, and Charles Vallhonrat, executive director of the Texas Craft Brewers Guild.