A legislative victory may be brewing for an emerging industry in Texas.
Four bills designed to reduce restrictions on Texas
micro-brewery beers and allow them a bigger slice of a $20 billion beer market
were approved unanimously this week by the Senate Committee on Business and Commerce.
Proponents and legislators believe the legislation will be a boon for a
small but growing industry.
Sen. Kevin Eltife, R-Tyler, the bills' author, said passage of the bills
would be a win-win for the state and entrepreneurs poised to build businesses
around the craft of making beer.
If micro-brews' place in the market follows the same trajectory as Texas
wineries, which gained similar provisions in 2001, Eltife said economic impact
studies show Texas breweries could create more than 55,000 jobs and $5.6
billion in commerce.
Similar legislation languished in House and Senate committees last
session. They were kept at bay by lobby groups working to keep Texas'
three-tier alcohol system cornered for established breweries, distributors and
retailers.
The bills, Senate Bills 515, 516, 517 and 518, would effectively give
micro-brews more access to distributors, allow them to self-distribute
quantities of beer and sell their product for consumption on site.
Eltife said all stakeholders, even those who previously opposed the
legislation, have agreed to support the bills all the way to the governor's
desk.
Scott Metzger, founder of Freetail Brewing Co. and an adjunct economics
professor at The University of Texas at San Antonio, said the economic impact
could be much higher because 20 times as much beer than wine is consumed in
Texas each year.
Metzger, 33, brews about 1,000 barrels of between 90 and 100 crafted
beers at his brew-pub restaurant and said the legislation represents better
access to the market and more room for success. He said the bills would allow
established breweries opportunity to invest in capacity and grow and give
other entrepreneurs the incentive to start.
"There are a lot of people who have contemplated getting into the
industry," he said. "If the legislation passes, I expect a flurry of
activity."
Texas has room to grow, according to a study drafted by Metzger and
presented by the Texas Craft Brewers Guild. With about 60 breweries, Texas
ranks among the bottom 10 states for microbreweries per capita, but the market
has grown. Microbreweries produced 46 percent more beer from 2010 to 2011.
Eltife said potential jobs, capital investment and growth to state and
local tax bases are pushing the reform.
"These are small businesses and entrepreneurs in an industry with
enormous potential," he said.
While microbreweries produce less than 1 percent of the beer consumed in
Texas, they employ more than 50 percent of the state's brewery jobs.
Respondents to a survey within the study said they plan to invest $29 million
to expand their businesses during the next five years to add more than 185,000
barrels of capacity.
Sen. Leticia Van de Putte, D-San Antonio, who brought the various
stakeholders to the table to hammer out differences between proponents and
opposition during the past year, said getting the legislation to this point
was a "Texas effort."
She applauded Eltife, Sen. John Corona, R-Dallas, the chairman of the
Business and Commerce Committee and all the stakeholders, from microbreweries,
major brewers to wholesalers and distributors, who spent hundreds of hours to
find agreement within convoluted alcohol laws, some of which date back to
Prohibition.
The legislation represents more local choices for consumers and positive
commercial growth for the state's economy, she said. Some Texas brewers may
only want the capacity to produce beers for their restaurants or as a hobby,
she said, but others want to take award winning brews global.
"We wanted to provide the framework for that," she said. "Consumers like
buying local products and participating in the craft, and we're so excited
about where the legislation is in the process."
