Floyd: Plan for tap room limits will protect small Texas brewers
It’s not uncommon for a person’s first taste of beer to be a sip of their dad’s favorite brand. Growing up in Houston in the 1990s, the choices for my first taste of beer were pretty limited because Texas wasn’t known for its wide selection. I, however, was very lucky that my dad had spent the late 1970s and early ’80s in California as a sailor and had developed a taste for brands like Sierra Nevada and Anchor Steam. As such, he tended to stay away from the watered-down, mass-produced lagers that still dominate the market today. While I can’t remember exactly what my first taste of beer was, I do know that it wasn’t until college that I came across those watered-down lagers. You could say that in a roundabout way, my dad laid the ground work for me to become a craft beer lover.
I have turned my love for craft beer into a career.
I have spent the past 10 years living in Texas, drinking craft beer and running bars. For the past five years, I have owned and operated Hay Merchant, an 80-tap craft beer bar located in Montrose. After traveling for much of my 20s, I chose to open my bars in Houston because of the streak of independence and loyalty that defines Texans and Houstonians. You can’t get more Texan then drinking independently owned Texas beer. It is from this background that I offer my support of Texas Senate Bill 2083 and Texas House Bill 3287 introduced at the 85th Legislature.
In a nutshell, these bills would serve to protect small Texas brewers by keeping large, foreign-owned mega brewers from entering into a market segment that was created to help the small, independent, Texas-owned brewers grow.
In 2013, bills were passed allowing Texas breweries that were producing fewer than 225,000 barrels of beer a year to open tap rooms and sell beer they brewed to consumers on-site. To put that in prospective, 225,000 barrels of beer is 75.6 million 12-ounce cans of beer a year - enough beer for 1,000 people to have five beers a day for 41 years. The largest independently owned breweries in Texas are currently producing around 50,000-60,000 barrels a year, and those breweries have been in the game for more than 20 years. Needless to say, that is a lot of beer and an amount that won’t soon be reached by any of our independent brewers.
The only problem with the 2013 bills was that they unintentionally left a Trojan Horse-like loophole in how that 225,000 barrel cap is calculated. The authors of the original bill didn’t realize that large, foreign-owned mega brewers could buy a Texas craft brewery producing under 225,000 barrels and use it as a vehicle to undermine true Texas craft brewers. With the recent sell-outs of independent craft breweries such as Houston’s own Karbach Brewing, this loophole could be used to attack Texas-owned independents.
Huge brewing interests like Anheuser-Busch InBev have signaled their desire to do exactly that. AB InBev used a formally independent small brewery it bought in 2014 to open up a wolf-in-sheep’s-clothing tap room in San Diego and have just announced plans to do something similar in Florida. SB 2083 and HB 3287 would close the loophole that AB InBev plans to use in Texas by making the 225,000 production cap include all beer a brewery’s ownership produces in a single year, not just the beer produced at a single location.
With lines already being drawn in the sand, the stage is set for what could be a once-in-a-lifetime convergence of interests. A trade group representing Texas craft brewers opposes these changes, and I believe that shows a remarkable level of short-sightedness. Mega-brewers, through their proxies, have also opposed it, leaving observers to scratch their heads over this unlikely union while Texas beer wholesalers are pushing to close this loop hole.
I’m sure that there will be much debate, smoke and mirrors over this issue. I urge everyone to look past the rhetoric and see the facts.
SB 2083 and HB 3287 are key if I want my seven-month-old daughter’s first taste of a product her father spent a life time championing to be as Texan as she is.
Floyd is the managing partner of craft beer bar Hay Merchant and a partner in Underbelly, One Fifth, Blacksmith and Julep.