School House Rock (Part One of a Series of Five)

"I'm just a bill.
Yes, I'm only a bill.
And I'm sitting here on Capitol Hill.
Well, it's a long, long journey
To the capital city.
It's a long, long wait
While I'm sitting in committee,
But I know I'll be a law someday
At least I hope and pray that I will,
But today I am still just a bill."

The State of Texas has more counties, more than any other state in the US. (Georgia ranks second with 159) Louisiana has 64 (called parishes). When I was in the eighth grade at Midway Junior High School, I was required to learn how to spell each one of them as well as the names of the Parish seats of each.

Ok, do not worry. This blog is not a geography rant.

By definition, the State of Texas is "dry". Out of 264 total counties only 44 allow all sales of alcoholic beverage anywhere "in the county". Harris County (Houston); Dallas County (Dallas); Tarrant County (Fort Worth) and Travis County (Austin) are not among the 44.

There are 26 counties that prohibit the sale of any alcoholic beverages anywhere "in the county".

The Texas Alcoholic Beverage Commission (TABC) has full and complete control over all aspects of the sale and handling of all forms of alcoholic beverages in the State of Texas.

I am a firm advocate of responsible actions regarding alcohol however The Czar like Machiavellian control of the TABC boggles the mind.

........more on that later

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I have had a dream the last few years of starting up a micro brewery. The more I look into the idea, the more I realize that I simply do not have the financial backing or "mojo". But I still dream. My dream continues for 2 Brewing Company. I, like a lot of other people have uttered the words "I think I will open a bar". I am pretty confident that opening and keeping open a bar is a lot more difficult that meets the eye.

In Texas if one has a bar, he has to have a license issued by the TABC to sell and serve beer and wine and also an additional license to sell and serve "liquor". Obtaining such licenses is difficult and expensive. As an owner of a bar, one can purchase liquor and wine at local liquor stores. Theoretically the owner can probably purchase such spirits less than someone could who simply walked in from the street. But.....the bar owner must pay a tax on each bottle thus raising the his costs. For each bottle purchased a special sticker or tag in affixed to it. This is strictly enforced by the TABC. Violations are severe and expensive. With regards to beer, all beer sold and distributed at a "bar" must be purchased through a wholesaler. Wholesalers are assigned by the TABC for various regions. Wholesalers essentially have an exclusive on all of the beers sold and consumed in their specific region. It is the closest thing to a legalized monopoly. The bar owner can only sell to the public what beer the local wholesaler has available.

Large "beer" companies such as AB InBev SAB-Miller and Molson-Coors have local beer distributors who all provide beer but they do so "through" the local selected wholesaler. Craft Breweries must sell and provide their beer and ales to the wholesaler directly and hope and pray that such beers are marketed with the same vigor as the big three are. If I were to open a brewery, I could sell my products to wholesalers and liquor stores. In Texas it is illegal for a brewer to sell directly to the consumer unless such brewer operates a Brew Pub. Here lies a technicality. You either own a micro brewery or a brew pub, not both. If a person owns a brew pub, he can produce beer "on site". He can sell his beer directly to the consumer (by draft). He can even sell limited quantities of his produced beer in "approved" containers (sometimes called growlers) and the customer can actually take the beer "home" for consumption. He can not sell any beer he produces in his brew pub to wholesalers or anyone else. Brewers of "Micro Breweries" can have "tasting" or tap rooms but they are prohibited to sell any of their beer to the consumer. They can charge a nominal charge for a brewery tour etc. So with all of this said, if a person was to opens a brew pub in Texas he or she can began making beer to sell in his or her bar only. He is prohibited by law to sell it anywhere else. If a person opens a Brew Pub in any other state, he or she can sell their beer directly to Texas liquor stores or wholesalers. Out of state beer producers have a clear advantage over those in Texas.

House Bill 660 was proposed to change things. The law, if passed, would have allowed Texas Brew Pub owners to have the same opportunity to sell their product as out of state Brew Pub Owners. In addition the bill would have provided a easy path for additional legislation that would allow Craft Brewers to have Brew Pubs to sale their product to the general public. Supporters of the bill showed where passage of the bill would cause the creation of hundreds of additional jobs for Texans. In addition they showed where a substantial amount of tax money would be generated on the production of more craft beer in Texas. Passage of the bill would have allowed Texas to enter a market that states such as California, Colorado, Oregon, and Washington have dominated. Passage of this bill was truly a "no brainier". But this is Texas. The poor wholesalers argued that if the bill passed, backyard bootlegger beer pirates would start selling untaxed and unregulated beer to bars and liquor stores. Yes, bars owners would still pay a bottle tax in fear of fines yet they may be tempted to buy a couple of kegs from some home brewer and try to pass it off as Budweiser or something. (that was sarcasm) I may not be real smart but TABC could easily require that all kegs have the necessary tags reflecting that all applicable taxes were paid. This should quell the wholesalers fears.

In summary the greedy wholesalers sold out their fellow Texans. House Bill 660 never got out of committee. Personally I am insulted. You should be as well.

I'm Thirsty



The Third