Tuesday, March 19, 2024 Mar 19, 2024
42° F Dallas, TX
Advertisement
Law

Beer Distribution for Dummies

You thought craft brewing was all hops and giggles. Until you tried to leave the city limits.
By |
Image

Let’s say you make a craft brew in your garage. You name it something like, She’s Not Stout She’s My Sister. You serve it for free to friends who come over for barbecue, and they keep telling you it is amazing and you should sell it. So you talk to your lawyer buddy who agrees to trade you legal advice for two kegs, and you figure out how the heck to get licensed and all that. You sell your vintage Jeep Wrangler that you can’t fit in the garage anymore because of the brewing equipment and buy a second-hand refrigerated van. You start small, distributing to a guy that you play tennis with who has a hipster bar in Oak Cliff. The hipsters, who try to out-hipster each other, start spreading the word that they alone have discovered an amazing craft brew with a very clever name. Other Dallas bars start placing orders. You quit your day job. Life is grand.

Then you get a call from a bar in Houston: “Hey dude, we heard you’re brewing an amazing stout with a great name, and there’s nothing we’d like more than to be the first vendor of Dallas’ best new beer.” And you’re like, “Awesome.” But then your lawyer buddy says, “Even if your second-hand refrigerated truck could make it to Houston, a 2013 law says that you have to hire a separate distributor there.” Since you didn’t really want to drive to Houston anyway because the humidity destroys your hair, you’re like, “OK, that’s cool. I’ll just sell the rights to distribute my amazing beer to the distributor who offers to pay the most.”

But then your lawyer friend says, “Well…the law states that you have to give the distribution rights away for free.” And you’re like, “For free? How am I going to fund my increased production? There’s a value to the rights.” And he says, “Yes, of course. But under the law, you don’t get the value.”

So you figure, OK. You have to give the rights away for free, but if you have any problems, you can switch distributors any time you want, right?

And your lawyer friend, who doesn’t seem like much of a friend anymore, says, “Actually, the Houston distributor you pick can sell the rights to another distributor. Forever. And if you ever want to work with a new distributor because the one you picked tends to leave your beer in hot trucks and miss delivery deadlines, you’re going to have to buy back the rights that you had to give away for free in the first place.”

Say what?

Up until yesterday, that was the way things worked for craft brewers in Texas. Local brewers Peticolas and Revolver, along with Austin’s Live Oak Brewing, figured the law was a bunch of backwash. They filed suit against the Texas Alcoholic Beverage Commission in 2014, arguing that the law violates the Due Course of Law guarantees of the Texas Constitution. Yesterday, a Travis County judge agreed.

So, brew on my friend. And next time you’re stuck in Houston, order a Blood and Honey.

Related Articles

Image
Business

At Parkland Health, the End of Subjective Surgery

Artificial intelligence is helping trauma surgery teams make data-based decisions about when to operate at Dallas County's safety net hospital.
Advertisement