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Beer Distributors, Craft Brewers Reach Deal

Beer distributors and craft breweries reached a tentative deal Monday to amend the Texas Alcoholic Beverage code, but the parties declined to provide specific details until legislative language was completed later this week.

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Updated March 13, 5:46 p.m.:

After a week of negotiations between craft brewers and wholesale beer distributors resulted in a compromise, legislation to amend the Alcoholic Beverage code passed through the Senate Business Commerce Committee on Tuesday. The bills were sent to the Senate Calendars Committee, the next step before a debate on the floor. 

The package of bills, filed by Sen. Kevin Eltife, R-Tyler, and Sen. John Carona, R-Dallas, allows for the on-site retail sale of beer at breweries, limited off-site retail sales for brewpubs and some self-distribution rights for breweries producing up to 125,000 barrels per year. Senate Bill 639, which its opponents called price-fixing, was significantly softened during the negotiation. 

Original story: 

Following a week of tense negotiations, a divided beer industry reached a compromise Monday on legislation to amend the state's alcoholic beverage code, beating a deadline set by state Sen. John Carona, R-Dallas, the Senate Business and Commerce Committee chairman. But the parties aren't disclosing any details until the official language is hammered out this week. 

“When I started working on this four years ago, no one would listen to me,” Scott Metzger, the legislative chairman of the Craft Brewers Guild, which is pushing to loosen restrictions on small brewpubs in the state. “Today, we have a deal.”

The Business and Commerce Committee tasked beer interest groups to come to a compromise on legislation last Tuesday to adjust the alcoholic beverage code, the state’s three-tiered system that regulates the production, distribution and retail sales of beer separately. 

Sen. Kevin Eltife, R-Tyler, filed a package of bills in February that would allow brewpubs to self-distribute to retailers and to sell directly to customers on their premises. The Beer Alliance of Texas, a lobbying group that represents beer distributors and some craft brews, supported the legislation, but the Wholesale Beer Distributors, another lobbying group, disagreed with the expansion. 

Carona filed Senate Bill 639, which would make several complex changes to the code, including severability and reach-back pricing, to “make sure all the interests are at the table to discuss this,” he said at a hearing last Tuesday. The measure has the support of the Wholesale Beer Distributors.

Emails to Carona's office weren't immediately returned.

Metzger, who owns Freetail Brewing, a San Antonio craft brewery, said it was a “very stressful” week in Austin, but Carona and Sen. Leticia Van de Putte, D-San Antonio, were “very effective in bringing a lot of people with disparate views to the table.”

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State government Texas Alcoholic Beverage Commission Texas Legislature