Texas craft brewers honored Sen. Kevin Eltife, R-Tyler, Thursday in Austin for crafting legislation designed to open access to the state’s multi-billion dollar beer market.
Eltife wrote and successfully guided four Senate bills during the last legislative session to give microbreweries and beer brewing entrepreneurs more opportunity for profit and ability to access customers.
Eltife said he believes, as do many other legislators, that market access will translate into increased commerce and employment.
Senate Bill 515 allowed consumers to purchase products produced at brew-pub locations, including bars and restaurants, as well as grocery and convenience stores. Senate bills 516 and 517 raised the production limit for microbreweries to 125,000 barrels from 75,000 barrels per year.
Senate Bill 518 allowed small breweries to open “tap rooms,” where craft brews can be consumed directly.
For his efforts, Eltife was awarded the “Friend of Texas Craft Beer Award” from the Texas Craft Brewers Guild.
Stephen Lee, a founder of True Vine Brewing Co., Tyler’s first micro-brewery, said the legislation has had a positive impact on brewers around the state. Allowing direct sales at the brewery created a revenue stream he and his business partners didn’t expect.
“That was a pleasant surprise,” he said. “We’re small so the gains were modest but more than we ever expected already.”
Unexpected revenue meant earlier-than-expected investment in the brewery’s equipment and capabilities, Lee said. Selling directly to customers also allowed the entrepreneurs to spread their trio of core values, “integrity, community and love” on a communal level, which Lee said was important for any small business.
“It’s always nice when you pass legislation and see positive results,” Eltife said. “The craft brewers are excited and motivated to expand their businesses, and that is good for the industry, the market and the state.”
The new laws’ economic impact could be huge if microbrews’ place in the market follows the same trajectory as Texas wineries, which gained similar provisions in 2001, Eltife said. Economic impact studies show craft brewers could create more than 55,000 jobs and $5.6 billion in commerce.
Microbrewers called the new laws a “step in the right direction” but said the changes fell short of leveling the playing field for microbrewers’ place in a market dominated by major beer producers, distributors and retailers. Lee said the lack of options among distributors could affect True Vine Brewing as it grows.
Lee said the inability to sell distribution rights or set different prices with distributors could affect their bottom line. But for now, the new laws are a welcome change.
Eltife said the industry was booming and expected the market would continue to grow. He said negotiating passage of the legislation during the last session opened the door for small brewers. He said he expected “tweaks” could occur during the next session and that further changes would be guided by brewers’ successes.
“This is a cottage industry that will grow,” he said. “Breweries already have an appeal and their growth is good for the businesses, local economies, consumers and the state.”