texas beer

SDBG Aims To Educate While Big Beer Wins In Texas

The San Diego Brewers Guild is rolling out an education program to help consumers easily differentiate between independent beer and big beer masquerading as craft beer. With all the recent talk of 10 Barrel (owned by AB InBev) coming into San Diego, it’s understandable why some people might be a bit fatigued when it comes to the discussion of big beer vs. indie beer. Being that we are here in California, with what many other states would consider pretty lax laws when it comes to alcohol distribution and regulations, many people don’t see the immediate impact of money flowing into politics from Big Beer.

Messing with Texas

Independent breweries in Texas, however, are fighting mad and have very good reason to be. House Bill 3287 became law this last week and was a big win for Big Beer, even though it might not be immediately apparent how. The law states that any brewery that produces over 225,000 barrels a year has to now give a cut of their profits to distributors by paying them to “distribute” their beer, even if that beer is moving from their brewhouse to their on-site tasting room a few yards away.

How did this law pass with so much pushback from the Texas breweries and the Texas Craft Brewers Guild? According to the Texas Tribune, the guild spoke out against this bill to no avail, stating:

“It is absurd over-regulation that will slow the growth of the craft beer industry in Texas and drive capital investment in breweries to other states,”

If you talk to the Beer Alliance of Texas, who represents the distributors, they say that the bill is needed to keep Big Beer from coming into Texas and taking advantage of loose regulations that would ultimately hurt independent brewers. From their website:

“These new laws amended the highly regarded Texas Three-Tier regulatory structure that has ensured an orderly beer marketplace for consumers for years. As the malt beverage marketplace expands today, craft brewers are growing and expanding as envisioned by policymakers. However, mergers and acquisitions by international brewers of Texas craft brewers, are challenging the intent of limited exemptions for self-distribution and on-site sales granted to small startup craft brewers.

CSHB 3287, stipulates that if a small production brewer is purchased or acquired by another brewer and their combined production exceeds 175,000 barrels per year, they are no longer afforded the rights and privileges the legislature put in place for small startup craft brewers.

This change only addresses a small percentage of “larger” craft brewers when aquired by a large manufacturer. 97 percent of craft brewers in the US produce less than 15,000 barrels a year.”

So why would a law that the distributors say is for the good of indie brewers be loudly and passionately opposed by the very indie brewers that the Beer Alliance says are helped by this law?

First of all, they are gas-lighting with this “97 percent of craft brewers…” comment because the law is only for Texas so what does a national percentage have to do with anything? Their concern is laughable, positioning themselves as champions of the “little guy.” There are numerous comments from the Beer Alliance basically saying that the people complaining are not and are never going to be affected by this bill. That view is short-sighted and just plain patronizing. No matter how many barrels are produced at a brewery, that brewery can still recognize a needlessly restrictive law that benefits one side.

If you follow the money, it’s apparent whose interests they have at heart. Here’s a breakdown from the Texas Tribune of the money that has been poured into Texas politics in the last few years.

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Looking at how the money was spread out, it’s no wonder that this bill passed and then was not vetoed by Gov. Abbott. These distribution companies are only going to put money into politicians that align with their views, just like craft beer guilds all over the country give money to politicians that they think will help their cause. This is nothing new. But if you follow the money, you will see where it ends. Silver Eagle Distributors, for example, not only donated more than $2 million to Texas politicians but they are also the largest distributor of AB InBev products in the whole United States.

Following that trail even further, take a look at the breweries who were granted exemption from this new law…

“But three Texas breweries recently purchased by mega-breweries will be exempt from the law. Karbach in Houston, bought by Anheuser-Busch InBev; Revolver in Granbury, purchased by Miller-Coors; and Independence in Austin, bought by a Heineken-owned subsidiary — will not need to pay distributors the tax at their existing facilities.”

So the big breweries who the Beer Alliance of Texas says they are trying to protect indie brewers from were granted the only exemptions? The Texas Tribune also noted that one regional brewery not included in this “carve-out” provision was Oskar Blues, which according to the new law will now have to pay distributors to deliver their kegs to their own taprooms, even if they are on-premise.

This Is Why

When people say indie brewers should let this conversation go and just worry about making good beer, this is why it’s important to keep shining a light on the topic. With Big Beer comes big money. Many of these distributors on this list of donors are directly or indirectly affiliated with Big Beer, which is the crux of the issue. Not only did Ab InBev, MillerCoors and Heineken manage to get their craft brewery acquisitions exempted from this law, they also get to profit from their affiliated distributors who now will get a cut from regional breweries who serve beer in their onsite taprooms. If legislation that goes against the best interests of independent brewers can pass in Texas, what’s to stop the same thing from happening here or anywhere else in the U.S. for that matter?

This is also why it’s such a positive step forward that the San Diego Brewers Guild is taking the lead in helping educate consumers. San Diego Magazine just published an article on the roll-out of this education campaign and it’s a great read, so make sure to check it out. In the piece, they talk about the #indie beer campaign:

“The Guild will introduce a number of items that are designed to help craft breweries identify themselves—not only as independent, but also as members of the SDBG. The planned items include window clings and flags for hanging in tasting rooms and for use at events. There are also tap danglers in the works, which will identify local, independent craft beer tap handles at bars and pubs all over the county.”

Education is important. While some consumers don’t and won’t care, others do and will make different choices based on knowing who will benefit from their money. So people are free to drink what they want and shouldn’t feel bad about it, but for those San Diegans who are interested, it will now be easier to differentiate between true craft, independent breweries vs. those breweries who fill the coffers of Big Beer.

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