***First, a programming note: I’ll be in San Francisco for the Craft Brewers Conference until Sunday – so updates may be sporadic until then.***
By now, you all know that yesterday House Bills 602 and 660 were heard before the Licensing and Administrative Procedures Committee.
Briefly on HB 602: No one expressed opposition, not even the Wholesale Beer Distributors of Texas, who have opposed the bill in the past. There is some forthcoming compromise on that bill that apparently everyone is happy with and it looks like you’ll be able to take beer home after a brewery tour later this year.
HB 660 had a tremendous number of supporters, and the roll of names read into the record as supporters of the bill was long and impressive. Among those in support but not wishing to testify were a number of beer distributors and the Texas Restaurant Association.
As you may have read, we’ve gained the support of the other tiers through thoughtful discussion with interested stakeholders. Beer distributors were concerned about self-distribution for a business type that already sells directly to the consumer, and we understand their points. Self-distribution has been removed from the bill. We also lowered the annual limit for aggregate production to 15,000 barrels per brewpub. A number we are very comfortable with. I’m pleased that we were able to come up with a bill that all three tiers really like.
We did have one person oppose our bill, however. Keith Strama, representing the Wholesale Beer Distributors of Texas, stood up and presented a semi-coherent rambling about how we should not allow these kind of changes to the code because… well, just because. Seriously. Strama did present some other barely comprehensible argument, which was called onto the rug in short order by Committee Vice-chair Chente Quintanilla of El Paso. Video of the entire hearing, which you can find here, proves quite entertaining. Strama should have just stuck to “Uh… just because” – turns out that was a better argument than the one he was trying to make.
A real comedic gem came when Mr. Strama suggested that HB 602 already accomplishes what brewpubs are trying to achieve by allowing us to simply change our license to a brewery and charge for tours and give away beer. Yes, that is MUCH simpler than just allowing brewpubs to sell to distributors.
Most interesting, to me, was that not a single industry member of the WBDT (of which many were present in the room) submitted themselves in opposition. It’s not hard to oppose in these kinds of hearings, you just fill out a card with your name, occupation, and your position. Why wouldn’t WBDT members bother to oppose? Could it be… they aren’t opposed?!??!?!?! This begs the question, who does the WBDT really represent? Certainly not their members, a handful of which have approached me about carrying my brand should the bill pass.
The conclusion seems obvious: the WBDT’s attorneys and lobbyists represent only themselves. They have to ensure they have a job in two years when this bill inevitably comes back up if it is defeated this time. These guys don’t care about brewers, that much is obvious. But now it is becoming clear they don’t even care about the distributors they supposedly represent, or the state’s best interested.
The writing is on the wall. The WBDT’s era of rule is coming crashing down around them as they have failed to keep up with changing times. They continue to lose members, fed up with the stuck-in-the-mud thinking of Keith Strama and his bosses, and they continue to lose influence.
With the WBDT exposed, the ball is back in our court. We have one or two weeks at the most to earn the votes of the committee, after that it will be too late to advance this session. Right now I think we have 4 votes. We need 5. Time to turn up the pressure and continue to urge members of the committee that this the right thing to do. Continue those calls and emails (I’ll post a sample follow up letter tomorrow).
Around the Web
Lee Nichols has a great story on the hearing for the Austin Chronicle. His article is also one of the last chances you’ll have to see my beard, which I said goodbye to this morning.
The blog, I Love Beer, has a great post on yesterday’s hearing.
And of course the Texas Tribune was covering the story as well.
And lastly, here is a written version of my testimony from yesterday in the event you were curious.
Members of the committee, thank you for allowing me the opportunity to speak on the matter of House Bill 660. My name is Scott Metzger, Founder and Chief Executive Officer of Freetail Brewing Company in San Antonio; Adjunct Professor of Economics at the University of Texas – San Antonio; and Executive Director of the non-profit organization, Texas Beer Freedom.
This bill is specifically about Texas brewpubs, establishments that brew artisanal, hand-crafted beer for sale to consumers on the premises of the brewery. Currently, the state’s alcoholic beverage code restricts brewpubs from participating in the well-established three-tier system and does not allow them to provide their products to the state’s wholesale tier for resale to the retail tier. This statutory restriction has significantly stunted the growth of the brewpub industry in Texas: while the number of brewpubs in the United States has gone from 5 in 1986 to over 1,000 today – we actually have fewer brewpubs in Texas today than we had in the 1990s.
The code as it is currently written not only restricts our state’s small businesses from growing but also provides a wide-open market for out-of-state producers of craft beer to come in and sell their products without the worry of competition from local brewpubs. I have a wealth of economic data to support the need for legislation like HB 660, but the argument is best demonstrated by this simple fact: brewpubs from California, Colorado, Delaware and Oregon are selling tremendous quantities of beer within our state’s borders while Texas brewpubs are shut out from competing in their own backyard. Put simply: currently, the best option for my brewery to expand the reach of our products in Texas is to move our brewery out of Texas. As a proud native Texan, that is a painful statement to make about any of our businesses.
In our great state, it is important to remember that we really have a five-tier system. In addition to the producers, wholesalers and retailers – we must not forget the consumers and the state itself. In the case of HB 660, all five tiers stand to benefit from this bill’s passage.
The benefits to brewpubs, the producers of the beer, are self-evident: the bill would enable them to grow beyond their existing walls. I was commissioned to perform an Economic Impact Study on behalf of the Texas Craft Brewers Guild to estimate the economic contribution of our industry today and in the event of statutory reforms such as HB 660. The study found the potential for more than $680 million of new economic activity, 6,800 new jobs and $192 million of new annual payrolls created.
The benefits extend to the wholesale tier. Today, the beer industry is declining in the aggregate with the exception of one sector: craft beer. Wholesalers are continuously expanding their portfolios to include artisan, hand-crafted beers like the ones Texas brewpubs make. HB 660’s passage would provide wholesalers with a wider-range of Texan products to offer. Speaking only for my brewery, since HB 660 has been introduced I’ve been approached by wholesalers from the Wholesale Beer Distributors of Texas and The Beer Alliance to discuss the possibility of carrying my brand. Quite simply, wholesalers want my beer.
Retailers stand to benefit by focusing their product offerings on high-quality local products. Every year, the National Restaurant Association releases its Top Trends. And for the last few years, “Local Food and Beer” has been at or near the top of that list. Thinking local is no longer a progressive ideal; it has become the standard way of life for Texans.
Consumers benefit by gaining a wider access to the products they desire. At my brewery, I am constantly flooded with calls and emails from folks around the state who want to know where to buy my beer. For Texans in Beaumont, El Paso or Garland, my answer of “only in San Antonio at my brewery” is disheartening.
Perhaps most timely is the benefit to the fifth tier, by which I mean Texas itself. The Texas Craft Brewers Guild Economic Impact Study concluded that statutory reforms like HB 660 can create upwards of $57 million of annual tax revenues for the state, without raising or creating any new taxes. That is enough for 1,300 teachers and firefighters or policemen. And $57 million is just a start. That number is based on the beer industry replicating the Texas Wine Industry’s growth following statutory reform in 2003. When we consider that Texans consume 19 times more beer than wine, we can see that we are only beginning to scratch the surface.
In closing, I ask you to support HB 660 not only for the brewpubs it will help grow; but for the wholesalers who will have an expanded range of supply, retailers who will be able to feature Texas-made products, consumers who will have access to the products they desire, and the tax revenue that you will be able to use in funding our state’s future.
Thank you, and I look forward to answering any questions you may have.
It is extremely rare to find me setting my alarm for 5:30am. It is even more rare to find me waking before a 5:30am alarm in anticipation of the day ahead. It just isn’t the lifestyle I lead. But today I opened my eyes and glanced at the alarm clock to find 5:15. Normally my reaction would be to go back to sleep, but not today. Today there was only one thought on the front of my brain:
Why hello there, Today. Hope you’re ready for an ass kicking.
Seventy days have passed since my first entry to this blog on the topic of HB 660. Exactly one half of the legislative session. A lot has happened. As you will see later today, a substitute bill has been drafted for HB 660 - a compromise we have reached with other parties in exchange for their support. The bill isn’t as big of a win as it previously was, but it is still a huge victory for Texas craft brewers, wholesalers, retailers, and consumers. It still generates tremendous benefits for the state of Texas and it’s ailing coffers. This is still a bill we cannot afford to not pass.
You know our position is sound. Today we show our legislators that position. Today we hold our line against those who would attempt to derail us in their own selfish interest. Today, we win the first battle.
HB 602 will also be heard by the House Licensing and Administrative Procedures Committee today. I don’t know which bill will go first, or even when. It will likely be between 8-10am, but it is possible we could be adjourned until the afternoon. It all depends on how other hearings go and which order they call them in. You can listen (and maybe watch) the hearings live today here.
Day 70 of the Legislative session. In other words, the end of the first half. Tomorrow, on Day 71, I will join some of my colleagues in testifying before the House Licensing and Administrative Procedures committee on behalf of HB 660 (I’ll post a copy of my testimony either tomorrow or Wednesday).
Those of you who have read this blog know my position, and you know it is strong. Today I make another plea for you to all members of the Committee to demand they support HB 660. It’s good for everyone in the 3-tier system, it’s good for consumers, and it’s good for Texas. We can simply not afford to not pass this bill.
Thank you all for the support so far and for the well wishes. Tomorrow is the first step in the new world of Texas Craft Beer.
Bus Trip to Austin
For those of you in San Antonio, I hope you Blue Star and Freetail on the bus to Austin for lobby day. Joey, owner of Blue Star, will be on board to answer questions to and from. Here is the itinerary:
7:30 Breakfast at Blue Star
8:00 Bus leaves for Austin
9:30: Arrival in Austin, Lobby Day Debrief (you’ll get a packet that has talking points and the Reps to go talk to)
10:00-12:30: Visits with State Reps
1:00: Group photo, Lunch at Uncle Billy’s
2:00: Bus departs for San Antonio (with a keg of Blue Star and Freetail beer on board)
There is no cost to help us in this fight. Please email firstname.lastname@example.org to RSVP.
Texas Craft Beer lovers, now is the time to make your voice heard.
House Bill’s 660 and 602 have been schedule for Public Hearing in the Licensing and Administrative Procedures committee at 8:05 Tuesday March 22. (Note, neither bill may be heard at 8:05, that is when the hearing starts of which we are on the agenda).
The future of both bills are now in the hands of the committee. If you haven’t make your voice heard yet, now is the time. If you have made your voice heard, now is the time to remind them of their need to support these bills.
Tuesday is also Texas Beer Freedom lobby day. I don’t have the info buttoned up yet, I hope to have it tomorrow. If you can, please come to the Capitol on Tuesday to help show your support.
Here we go.
Happy St. Patrick’s day everyone! I hope you are all are enjoying craft beer on this festive day, and please remember to do so responsibly.
We had a great event at the Capitol last night that one staffer told me was the best attended reception at the Capitol in her memory in the 8 years she’s worked there. Wow!
We spoke with a handful of fantastic and curious Legislators, including Reps. Aliseda, Allen, Berman, Chisum, Geren, Gonzales, Isaacs, Phillips, Price, Shelton, Torres, and of course our bills’ author, Mike Villarreal. A couple of them even said they’d be speaking directly with Rep. Villarreal very soon about signing up as sponsors. Awesome!
Tomorrow I’m going to have news for San Antonians on how to help us next Tuesday for the official HB 660 lobby day (and also what those of you in other cities can do too).
Around the Web
W. Scott Bailey, who I can attest drinks great beer, has a good story in the SA Business Journal that ran prior to yesterday’s event.
Eric Braun, who also drinks great beer, has a similar story on MYSA.com.
Almost to the halfway point of the legislative session, and today Texas Beer Freedom is hosting a reception for Members and their staffs at the Capitol. These kind of events are always fun for me, because they put to test my ability to guess how much beer people will drink. I almost always underestimate folks interest in taking the time to come try some beer – to the point where I should know better by now. Luckily, my friends from brewpubs around the state will also be there with beer to help me out. I should have some news tomorrow on where folks are on the bill, based on feedback I get tonight.
The Loop Scoop has posted a wonderful letter to Representative Mike Hamilton, who is the Chair of the House Licensing and Administrative Procedures committee, where HB 660 has been assigned. If you haven’t done so already, I recommend penning similar letters and following up with phone calls to your elected officials and members of the committee.
Lastly, tomorrow is St. Patrick’s Day, as we all know. I’ve long suspected that St. Patrick is the patron saint of brewers as his day sure sells a lot of our beer. Hopefully he’ll also bring us some of that luck of the Irish when it comes to HB 660.
In coordination with Texas Beer Freedom, you’ll soon be able to find these beauties at Freetail, Blue Star, NXNW, Uncle Billy’s, Black Star and Draught House (and maybe more places, I’ll update you as the list grows).
At all locations, you buy the glass for $10 and it includes your first beer. Details on what happens after that vary by location, but at Freetail you also get your glass refilled for $3 for the rest of the night with your glass (you’ll have to buy a new glass the next day).
Today I spent the afternoon at the Capitol will colleagues, delivering invitations to every single office for a legislative event hosted by Texas Beer Freedom.
On no occasion was I dismissed as a dismantler of a perfect system. No one accused me of trying to sell beer in dry counties or to children. No one even told me they didn’t have time to talk. The reaction at every single office was one of excitement to be hearing from Texas brewers.
Granted, these were staffers I was talking to and their excitement doesn’t directly translate to votes – but they are the front line for their respective members.
Today, I’m more encouraged than ever.
Right off the bat, happy Texas Independence Day! 175 years ago, while the brave men and women of our state fought for independence at the Alamo for 13 days, our state declared itself sovereign. Not to put our efforts on par with what those Texans did back then, but today, we fight for the independence of Texas brewpubs.
Yesterday, the Licensing and Administrative Procedures Committee held their first round of hearings. Judging by the past, HB 660 should have its hearing in the next couple of weeks. Now, more than ever, it is important for you all to write the members of the committee and express your support for HB 660. You can find the committee list here: http://www.capitol.state.tx.us/Committees/Membership.aspx. Even if you are not in their district, please write, call and email your support over the next few weeks.
Also, keep March 23 marked on your calendar as we are planning a rally at the Capitol and on April 3 we are planning a huge event at the new Uncle Billy’s on Lake Travis.
Thank you all for the continued support. We will win this fight.
And the photos (Credit to all to Allison Smith, professional photographer and Freetail staffer):
If you live in San Antonio or within the immediate vicinity – I expect to see you at Main Plaza tonight. I’m not super political and I’m not really up-to-date what the Tea Party is all about… but either way a Beer Party sounds like a lot more fun! Let’s show the rest of Texas how much HB 660 means to us and lets also show off the spirit of San Antonio in the process. Cheers!
Lots of buzz following yesterday’s meetings at the Capitol (which I still contend is made of Milk Chocolate. Get within 10 feet of it and you’ll be tempted to take a bite like I was) and last nights social gathering for the Texas Beer Institute, a consortium of production breweries.
Lee Nichols caught up with me and a handful of others last night (and even had a chance to take a fun picture of Live Oak’s Chip McElroy) and wrote a couple of stories on the matter. He has an Austin Chronicle piece up in addition to another story at his LegeLand area of the Chronicle. Both are recommended reading.
The Burnt Orange Report weighs in on HB 660 and HB 602 and suggests Texas could drink its way to fiscal solvency.
There will be tons more news tomorrow and over the weekend. I just did a couple of interviews for WOAI 1200 AM Radio (San Antonio) and Texas Public Radio who will have stories in advance of the rally, and will be covering the rally itself.
Things are looking up in Texas! Looks like I won’t have to make a last stand at the Alamo after all.
I met a gentleman named Michael Schultz yesterday at the HB 660 rally in Houston – and he put together this 30 second video. Enjoy.
Another late post, this one 11 hours late… I promise to catch up today.
We had an absolutely fabulous turnout at the Flying Saucer Houston last night and it was a blast meeting and talking to so many of the folks who read this blog. Thank you again for your amazing support.
People talk about how sometimes the will of the people isn’t enough, but the truth is that every movement has a tipping point. That point where our voices are so loud they can no longer be ignored. I don’t know exactly where that point is, and I know we aren’t there yet – but we are moving in that direction. This is the best chance Texas has ever had to true beer reform.
Day 34 will be up later tonight – I promise!
Right off the bat, I realize this post is 9 hours 18 minutes (and counting) late. Yesterday was a crazy day for me; as soon as I woke up I hit the road to Houston, where my day was filled with meetings and then an epic (and yes, I mean epic) beer tasting that didn’t allow me to post. But I’ll make up for it today with a double dose, (insert Robert DeNiro “Double Dose.”).
I’ve mentioned this before, but we’ve founded a non-profit organization called Texas Beer Freedom that can be used as the political vehicle for Texas craft brewers, now and in the future. Immediately, Texas Beer Freedom is raising money to help with expenses related to ensuring HB 660s passage. Along with expenses on items like shirts, pint glasses, coasters, growlers, etc. – we also are incurring significant expenses for a lobbyist we have retained to help our bill navigate its way through The Capitol and a Consulting firm to help us with our events coordination and PR. The grass-roots movement is an extremely important piece to this process, but we felt the lack of a daily presence in the Capitol could hamper our bill as it moves forward – especially considering that our opposition has a team of several lobbyists working around the clock to defeat the beer’s progress in Texas.
www.TexasBeerFreedom.org will be a central source of information (along with this blog) for info on beer-related legislative issues, and also where you can find info on where our money is coming from and how it is being spent. Unlike other groups, who derive strength from the secretive nature of their dealings, we have nothing to hide and pride ourselves on complete transparency.
The website is a work in progress, but the message is still there. If you can find it okay to donate whatever you can, we would be highly appreciative of your support. If donating isn’t something you can do right now, we are still highly appreciative of your support, and your voice is still needed. While walking through the Capitol the other day, many staffers mentioned that they had heard of HB 660 because of your emails, letters and phone calls.
HB 660 Rally at the Flying Saucer Houston!
Reminder: I’ll be at the Houston Saucer at 3pm today to hang out, drink great craft beer and talk HB 660. I have a bunch of T-shirts with me available in exchange for a donation as well. Hope to see you there.