(512) Brew News

Support Texas HB2436 – Legislation to allow sales on site for On/Off Premise Consumption by Kevin - Owner/Brewer
April 4, 2011, 11:27 pm
Filed under: Uncategorized

HB 2436/SB 1575 would allow small Texas breweries (under 75,000 bbl of production) to sell the beer/ale that they brew to the ultimate consumer for off-premises or on-premises consumption.  It would extend to small breweries the privilege of operating a pub with the same rights and responsibilities as a holder of a wine and beer retailer’s permit but with regard to their own products only.  Packaged beer and ale, produced at the brewery, could also be sold for off-premises consumption.

With this allowance microbreweries would NOT be able to purchase other alcoholic beverages for resale, as may actual holders of the wine and beer retailer’s permit.  They would also not be able to ship beer by common carrier to the ultimate consumer.  All sales would be over the counter, face to face.

SB 1575 committee sub draft


House Licensing and Administrative Procedures
Representative Mike Hamilton (chairman)
phone number (512) 463-0412
fax number (512) 463-1915
Website http://bit.ly/h6ObWp
Representative Chente Quintanilla (vice chairman)
phone number (512) 463-0613
fax number (512) 463-1237
Website http://bit.ly/eFSJYX
Representative Joe Driver
phone number (512) 463-0574
fax number (512) 463-1481
Website http://bit.ly/hzRnKP
Representative Charlie Geren
phone number (512) 463-0610
fax number (512) 463-8310
Website http://bit.ly/hHLk1w
Representative Roland Gutierrez
phone number (512) 463-0452
fax number (512) 463-1447
Website http://bit.ly/hgBqoG
Representative Patricia Harless
phone number (512) 463-0496
fax number (512) 463-1507
Website http://bit.ly/fAzz2b
Representative John Kuempel
phone number (512) 463-0602
fax number (512) 480-0391
Website http://bit.ly/fcEqJX
Representative Jose Menendez
phone number (512) 463-0634
fax number (512) 463-7668
Website http://bit.ly/h3qiMp
Representative Senfronia Thompson
phone number (512) 463-0720
fax number (512) 463-6306
Website http://bit.ly/gaMwf1


Parity with Texas Wine Producers

This information is more thoroughly examined in ECONOMIC IMPACT AND POTENTIAL OF THE TEXAS CRAFT BREWING INDUSTRY, by Scott Metzger, Adjunct Professor, Dept. of Economics, UT – San Antonio.  In it, he references that the Texas wine industry grew from $132 million of annual output and 1,800 jobs in 2001 to $1.35 billion and over 9,000 jobs in 2009 following similar changes in the laws for wineries.  If beer follows the same trajectory as wine, the next eight years could see (direct economic impact only):

$678.8 million per year of additional output

6,829 new jobs created

$171.8 million of new payroll

$56.8 million of annual state and local tax revenue generated.

Job Growth in Texas

This bill would provide immediate job growth in order to staff the businesses for direct sales to consumers.  It would also provide additional jobs over the long term to fulfill increased production demand.  Small brewers, like most small businesses, employ many more people per unit of production than their larger counterparts.

Increased Local and State Revenue

These direct-to-consumer sales would be taxed on retail dollar amount.  At $4 per pint this would be $41.25 local and state revenue/keg of beer sold to the ultimate consumer in addition to the state excise tax of $3/keg.

Increased Use of other Texas Products

The largest ingredient of Texas beer is Texas water.  Additionally, Texas Craft Brewers use many Texas agricultural products such as honey, peaches, berries, pecans, flaked oats and un-malted wheat.


This is a potent marketing opportunity for a small brewery that conducts marketing in a way very different from the large domestic breweries.  It would also allow small batches of potential new products to be test marketed to consumers at the brewery pub.

More Robust Business

This bill provides another option for these small businesses to achieve additional income.  Currently, Texas breweries compete at a disadvantage compared to breweries in other states that have more favorable laws.  Those businesses are allowed to retail their products in their states and use that income to expand their business into Texas.  This bill would allow Texas breweries to become equally robust and competitive.

Other Effects

For Wholesalers

Limits the size of the brewery that can participate to 75,000 barrels annual production (same limit as existing self-distribution allowances  – TABC Code Sec. 12.05 and Sec. 62.12)

Limits the volume sold to ultimate consumers in one year to 5,000 barrels (same as existing brewpub limit – TABC Code Chapter 74)

For Texas

Protects State from constitutional challenge by prohibiting shipping by these small breweries to ultimate consumers in Texas


4 Comments so far
Leave a comment

Thanks for the contact info and making it easy to voice our opinions.

Comment by Matt McGinnis

This is the bill that will get the craft beers going in Texas.

Comment by Billy

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