Legislative History

The Texas Liquor Control Board is renamed the Texas Alcoholic Beverage Commission.

In 1979, SB 419 extended three-tier restrictions to the beer segment of the Texas alcoholic beverage industry. Contrary to popular mythology that the Three-Tier System has been in place since the dawn of man–or at least the repeal of prohibition–prior to the passage of SB 419, Texas breweries could sell beer directly to retailers and distributors could conduct “dockside sales” directly to consumers. Spoetzel Brewery in Shiner successfully lobbied for an amendment authorizing self-distribution for breweries producing no more than 75,000 barrels of beer annually. This remaining self distribution allowance became known as the “Shiner Exception.”

SB 720, also known as “The Beer Industry Fair Dealing Law,” gave way to the birth of beer franchise law in Texas. The law prohibited termination or non-renewal of distribution agreements by manufacturers without “good cause,” and limited the ability of a manufacturer to deny assignment of distribution rights to another distributor. To this day, terms of the BIFDL cannot be overridden by contract.

By 1993, 41 states allowed for the operation of brewpubs–small, restaurant/taproom focused breweries selling all or a majority of their beer onsite directly to consumers. Pioneering brewers had been working for a few legislative sessions to pass a bill legalizing brewpubs in Texas and they succeeded in 1993 with the passage of HB 1425. The new license allowed brewpubs to brew up to 5,000 bbls of beer annually and sell that beer directly to their customers for enjoyment onsite or to-go. Around 18 brewpubs opened in the wake of HB 1425’s passage, but nearly all closed in the years to follow. It would be another 20 years before brewpubs would be granted the right to distribute their beer beyond the four walls of their pubs. 

In 1995, beer franchise laws became more entrenched in Texas when SB 1236 was passed requiring brewers to grant exclusive distribution rights to their product to a single distributor per given territory.

A package of 2013 bills supported by the Texas Craft Brewers Guild brought sweeping reform, creating a modern framework for craft beer in Texas. For the first time, brewpubs gained the right to sell their beer outside of their own premises–doubling their production cap to 10,000 bbls per year, which could be sold to retailers like grocery, c-stores, bars and restaurants–including up to 1,000 bbls of self-distribution. At the same time, craft breweries producing less than 225,000 bbls of beer annually gained the right to operate an onsite taproom, selling up to 5,000 bbls of beer per year for on-premise consumption. These changes shepherded the Texas craft beer scene into the modern age and spurred massive growth in the industry in the years immediately to follow. However, the legislature also made a concession to the beer distributor lobby in 2013, passing a bill limiting a brewery’s ability to receive payment when signing away their territorial distribution rights to a wholesaler. Finally, manufacturing breweries’ self-distribution allowance was changed. Prior to the change, any brewery that sold fewer than 75,000 bbls of beer per year could self-distribute all of their beer. The new legislation allowed breweries that sold as much as 125,000 bbls of beer per year to self-distribute 40,000 bbls of those sales.

Prior to 2017, all the various caps, rights, and privileges in the Texas Alcoholic Beverage Code were based on how much beer a brewery brewed at an individual licensed location. However, that changed in 2017 when the beer distributor lobby prevailed on the Legislature to pass HB 3287, which suddenly factored in a brewery’s beer production across all if its licensed facilities for the purposes of determining if it produced less than 225,000 bbls and could legally operate a taproom. While only a subset of breweries were immediately impacted by the legislation, it created a new dimension of absurdity inside of the Alcoholic Beverage Code and had the real effect of devaluing ALL of Texas’ independent craft breweries the day it became law. Under the most ludicrous provision of the law, certain breweries became obligated to pay a distributor for the right to sell their *own* beer in their *own* taproom. The distributor lobby foisted this upon the Legislature proclaiming it would protect craft brewers from internationally owned multi-billion dollar corporate mega-brewers, yet the final version of the bill actually carved out Bud and Miller’s faux craft portfolios so the law doesn’t apply to them.

On September 1st 2019, Texas became the final state in the country to legalize Beer-To-Go sales from manufacturing breweries after well over a decade of advocacy efforts from Texas craft brewers and the Texas craft beer community, and the hard work of Representative Eddie Rodriguez (D-Austin) and Senator Dawn Buckingham (R-Lakeway) during a rollercoaster legislative session. Over the next two years, the TABC Sunset bill, which the Beer-To-Go amendment passed along with, calls for consolidating permits, repealing the arbitrary difference between “Beer” and “Ale” in the Texas Alcoholic Beverage Code, allowing for out-of-county warehousing for self-distributing breweries so they can better serve new markets, and reducing bloated wait times for label approvals so new beers can hit the market fresher and faster. “This legislation represents the most comprehensive and positive reform of the Texas Alcoholic Beverage Code in a generation, while serving the entire industry from the manufacturer down to the consumer,” Texas Craft Brewers Guild Executive Director Charles Vallhonrat said.