Eltife's micro-brew bills gaining steam heading to Texas House - KYTX CBS 19 Tyler Longview News Weather Sports

Eltife's micro-brew bills gaining steam heading to Texas House

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FROM THE TYLER MORNING TELEGRAPH:

Eltife's micro-brew bills gaining steam heading to Texas House
By ADAM RUSSELL
arussell@tylerpaper.com

Bills designed to open Texas' $20 billion beer market to craft brewers cleared the Senate and now are headed to the House.

Sen. Kevin Eltife, R-Tyler, successfully navigated legislation that would give micro breweries and beer brewing entrepreneurs more access to the marketplace. He believes, as do many other legislators, that market access will translate into increased commerce and employment.


SB 516 and SB 517 would expand current law to allow for enhanced distribution opportunities for micro breweries engaged in producing beer and ale by raising production limits from 75,000 to 125,000 barrels per year.

"This legislation expands consumer choice, grows small business and creates economic development in this state," Eltife said.

Two other bills passed out of the Senate earlier this week.

SB 515 would allow consumers to purchase brewpub-manufactured products at retail locations, such as bars and restaurants and convenience and grocery stores. SB 518 will allow small breweries to open "tap rooms" for a limited amount of on-site consumption.

The bills passed out of the Senate on Monday and Wednesday.

If micro-brews' place in the market follows the same trajectory as Texas wineries, which gained similar provisions in 2001, Eltife said economic impact studies show Texas breweries could create more than 55,000 jobs and $5.6 billion in commerce.

Master brewer and owner of McKinney-based Franconia Brewing Co. Dennis Wehrmann said the bills would open the market for micro-brews and brew-pubs statewide. But Wehrmann offered criticism of Texas' laws controlling the beer and alcohol market.

While he considers the legislation a "win for breweries and brew pubs" and an opportunity for a bigger slice of a multi-billion dollar pie, the bills fall short of leveling the playing field within the three-tier alcohol system dominated by big breweries, distributors and retailers.

Wehrmann said his home country of Germany and other U.S. states, such as Colorado and Massachusetts, which are home to regional beers that now enjoy global success, allow supply and demand to dictate the market, not laws or lobby groups.

For instance, microbreweries and brew pubs' would still have limited direct market access without distributors (40,000 barrels).

However, some in the industry said the current small-business model makes using distributors more cost-effective to small brewers beyond 10,000 barrels.

"Overall it's a good step forward for the industry," he said. "Competition makes for a good, healthy market."

East Texas Brewers Guild President Tommy Balboa said the legislation is a win for entrepreneurs and "levels the playing field somewhat" within the statewide beer market.

The three major brewers will still dominate the market, he said, but it does give small operations the ability to make a name for themselves among a growing pool of brew aficionados and beer drinkers who want to expand their tastes.

Balboa said there is interest among East Texas home-brewers to take a chance on their recipes. He said there already are entrepreneurs waiting to invest and turn a hobby into a business.

"It opens up a whole new world for (micro-breweries and home-brewers)," he said.

Eltife said small breweries had struggled to move any legislation the past three sessions and that it took concessions by the established beer lobby and craft brewers to get the bills moving toward the governor's desk. It's difficult to move legislation that "messes with the three-tier system" and took a concerted, bi-partisan effort to get to this point, he said.

Determining craft beers' future in the Texas market will depend on their success.

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