Craft Brewers call Texas Legislature's passage of bill 'disheartening'. Ronnie Crocker, HoustonChronicle.com ($$$)
A bill that would force Texas breweries, once they've grown beyond a state-limited size, to sell and buy back their own beer before offering it in their own taprooms has now passed both houses of the state Legislature.
Before we go any further I want you to think about the logistics of this for a minute.
1. Texas Brewery brews beer, wants to sell some from their taproom.
2. If they are above a certain size (175,000 barrels of annual production) they cannot unless....
3. The 'sell' the beer to distributors and then buy it back at a mark-up (sometimes as high as 30%).
4. It is likely the beer in question will never leave the premises.
In other words the Texas Legislature, supposedly one of the most conservative in the country, has just mandated that Texas brewers of a certain size must pay up to a 30% tax on their wares to a private industry for which the industry does not have to offer any services upon return.
Of all the bad liquor laws in the State of Texas, including those that Wal-Mart is challenging in Federal Court and almost anything related to the TABC this undoubtedly takes the gold medal as the worst.
Imagine if you made sandwiches and wanted to sell them at a restaurant, but the Texas Legislature ruled that you could not sell those sandwiches until you paid 30% of their value to Sysco. This would be true even if you purchased your meat from a local butcher, and brought it to your restaurant without their services.
I would imagine you would feel a little bit put out by all of this.
Yet, our august officials in the Texas Legislature (with mostly Republicans voting in the affirmative) have determined that this is a very good thing and an area where government should get involved. I would say that I can't wait to hear Dan (the Man who would be King) Patrick offer up a 'conservative' argument for this but I'd be lying. Lying because I doubt any politician is going to be asked to explain their vote, or offer justification for it. It's unlikely that they'll suffer for it at the ballot box either because, on the whole, Texas citizens don't care.
What they do care about is being able to buy beer, wine and liquor at commodity prices, whether or not the product in question is, in fact, a commodity. While buying liquor in Houston I've, first-hand, heard customers arguing for massive discounts on luxury liquors such as Louis III, Pappy and some high-end Champagnes. They want Dom or Veuve (more of a mid-range product but that's another post) but they want to pay low-end Moet prices. $9.99 per bottle please.
Of course, that $3.00 tap beer will now cost $4.00 despite never having left the facility. A dollar of that cost is going to a company that is doing nothing at all except collect a private tax imposed on the producer by Texas' increasingly un-conservative legislature.
I, for one, hope the breweries sue. Because I think they'll win if they frame this as an unconstitutional taking. The argument for seems pretty strong.
I hate to say it for the small liquor stores but I hope Wal-Mart wins as well. Texas liquor laws need to be blown up, rewritten and the ground needs to be salted where the three-tiered system once stood.
Then what is left of the GOP needs to do some soul-searching and decide whether or not they want to keep their elected officials. Increasingly, it's getting harder and harder to find ones that deserve an affirmative answer to that question. Certainly no-one in leadership.