Little Bitty City Pretty

It’s definitely no surprise to anyone who knows me, that I love beer. Especially craft brews. My wife doesn’t like to send me to get beer because I will sit in the beer aisle for twenty to thirty minutes looking for something new or interesting to drink, and fortunately there are a lot of craft breweries in Texas and all over the country, and that’s good for a self proclaimed beer nerd like me. I had even floated the idea of brewing and selling my own beer, which got me looking at the laws and regulations required to own a brewery in Texas. Like many industries in Texas, the rhetoric of freedom doesn’t pan out in reality. Brewing is a highly regulated industry, especially the selling and distribution of beer.

Texas, like most states, relies on a post prohibition 3 tier system. Basically you have producers, distributors, and retailers, and legally you can only be one. There are some recent exceptions to this rule, but by and large, if you brew beer, you are not allowed to sell directly to retailers. I have to contract with a distributor who has exclusive rights to sell my beer to retailers in their distribution network. For example, if I had a brewery, and there was a convenience store next door to my brewery, it would be illegal for me to sell them beer to sell at their store. I have to contract with a distributor, who would buy my beer and then sell it to the retailers it contracts with, and if the convenience store next door doesn’t contract with that distributor, my beer isn’t sold there.

Notable exceptions to this rule exist. Breweries are allowed to sell beer for consumption on premises, and sell up to a case a day per person directly to consumers, that went into effect in 2020, and the Distributors lobby fought tooth and nail to keep this from happening. The Beer distributors rationale for these outdated and anti competitive laws is pretty nakedly self interested, in that direct sales cuts into their profits. These companies feel entitled to a piece of the profits of a business they don’t own, and they’ve used the Texas legislature to enforce it. This is about as anti competitive, and anti freedom as it gets, but most people don’t notice because they don’t see the direct effects of these laws themselves. That is until they want to start a business and find out that they have to pay for the privilege to work.

This isn’t to say that distributors shouldn’t exist at all, distributors allow breweries to expand their products reach and sell to a wider audience, but for the government to say that a business must sell their product exclusively to a third party is about as anti competitive as it gets. Defenders of these rules say that it limits the publics access or consumption of alcohol, but I have never once seen a study that backs this claim. Even if this were true, it is not the place of the government to limit its citizens access to anything. People should be offended that the state of Texas has colluded with corporations to protect their interests over the interests of consumers and the market.

These rules regarding the sale and distribution of alcohol only scratch the surface of the ludicrous rules and regulations regarding alcohol sales in Texas. To say they are outdated is an understatement. Texans should be as offended by the governments regulations of the beer market as they are by any other hamfisted government mandates. Freeing breweries, makes Texas more free. Historians say that without beer, modern society might never have existed. We owe it to our beer to do better.