UPDATED: North Texas brewers head to Austin to talk industry legislation

The brewers met with the Texas Craft Brewers Guild to discuss the final details of the bills.

Alexa Clark

AUSTIN — Representatives from several North Texas craft breweries headed to Austin Monday to take part in discussions about legislation concerning the future of the industry. Staffers at Deep Ellum Brewing Co., Peticolas, Community Beer Co., and Rahr, among others, made the trip to meet with the Texas Craft Brewers Guild (TCBG), a statewide organization leading political talks.

“North Texas breweries have a lot of questions, a lot of people are upset,” said Kevin Carr, founder of Community Beer Co, referring to a recent fast-track bill filled in the Senate.

He said the breweries convened in Dallas-Fort Worth to “calibrate the general consensus” before driving south to meet TCBG.

“We came to meet with the board of our guild because we wanted to make sure our interests were aligned,” he said.

Alcohol codes have been a hot button issue in the 2012 legislative session. The TCBG has been working to loosen the codes to help smaller manufacturers gaining footing in the industry. However, Sen. John Carona, R-Dallas, recently filed SB 639, a counteracting bill that would change the relationship between breweries and distributors.

Carr said both groups will have to compromise, but the final bill is being discussed in the House Tuesday. The package deal includes the following bills:

SB 515 would increase the annual production limit of brewpubs from 5,000 barrels to 10,000. It also allows brewpubs to sell beer to the public as well as to distributors, who can then sell to other bars and restaurants;

SB 516 and SB 517 would create a new Brewer Distributor permit. For $250, a brewer that produces less than 125,000 barrels a year can self-distribute up 40,000 barrels a year;

SB 518 would allow brewers who produce less than 225,000 barrels a year to sell up to 5,000 barrels on-site. This means breweries can sell visitors beer that they can drink in a taproom;

SB 639 would prohibit “Reach-Back Pricing” — a practice where breweries adjust wholesale prices relative to retail prices. It would also outlaw breweries from accepting payment for its distribution rights, although it allows distributors to sell those rights once acquired.

Carr said brewers take issue with SB 639 because it devalues the brands. Breweries often enter into partnerships with distributors to expand their consumer reach. It’s an important relationship, he said, that offers a return on up-start investment. Sen. Carona’s bill, however, would undermine the costs and abilities of independent business to function, Carr believes.

~~Sen. Carona and others involved with the bill were unavailable for comment at the time of publication, as they were in a hearing for the Senate Committee of Business and Commerce.~~

UPDATE: Steven Polunsky, director of the Senate Committee of Business and Commerce and spokesman for Sen. Carona, said no one is entirely happy with the packages of bills. However, he said SB 639 is an important piece of the puzzle that is going to improve conditions for the industry.

"This is the first time we have had a chance to pass legislation like this and we are fairly sure it will pass," Polunsky said.