Jester King wins prestigious small-brew industry activism award

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Congratulations to Texas’ own Jester King Brewery, which this week received the F. X. Matt Defense of the Small Brewing Industry award at the huge Brewers Association’s Craft Brewers Conference happening right now in Denver.

Just about 9,000 people are attending this conference, and the award to Jester King is the burgeoning industry’s nod to the brewery’s “efforts to overturn antiquated beer laws and create a level playing field for small brewers in Texas,” according to a release posted on the brewery’s website.

The award is named for the late F. X. Matt, president of the F.X. Matt Brewing Co. in Utica, N.Y., from 1980-1989, “a tireless and outspoken champion for the small brewing industry,” reads the BA website.

“Nominations are open to individuals who have given aid and support to the causes of small, independent brewers, and by doing so have supported the Brewers Association’s goal of vigorously defending the craft beer industry.”

Below is the transcript of the acceptance speech given by Ron Extract of Jester King:

“Thank you very much to everyone at the Brewers Association. The award came as a complete surprise, and we’re extremely humbled and honored to accept it. We’d like to thank our attorneys who represented us in our lawsuit against the Texas Alcoholic Beverage Commission — Jim Houchins of The Law Office of James O. Houchins and Pete Kennedy of Graves, Dougherty, Hearon & Moody, P.C., as well as our co-plaintiffs Authentic Beverages Co. and Zax Restaurant and Bar. It was Jim Houchin’s idea to challenge some of the unjust, antiquated laws under which we were being forced to operate. He and Pete Kennedy not only helped to change these laws, they also paved the way for further legislative change that would follow, as a result of the continued efforts of the Texas Craft Brewers Guild and its leaders, to whom we owe a tremendous debt of gratitude.

“As hard as many of us are working to modernize our legal and regulatory structures, there are also those, often with a good deal more resources at their disposal, who are working equally hard to hold us back.

“Last year, Texas breweries gained the right to sell beer directly to consumers and Texas brewpubs gained the right to distribute off site. But, thanks to the efforts of a powerful distributors lobby, we also lost the legal right to receive compensation for one of our most valuable business assets, our territorial distribution rights — an asset that distributors routinely and legally sell to one another for millions of dollars. Distributors often speak about investing in our brands, yet the distributors who were behind this effort seem to feel that the investments that brewers make in their own brands are literally worthless. What’s perhaps even more astounding, though, is that even as these distributors lobby against our interests, other craft brewers continue to sign on with them.

“For those of you who have distributors that you like, and whom you feel genuinely support your interests — and there are definitely some very good ones out there — please encourage them to work together with us to bring about the change we need, and to speak out against those that would hold us back. If you have distributors who do not support our collective interests, or even actively lobby against them, call them out, and hold them accountable. Remind them that the money from selling your brand is helping to pay their bills. And when seeking new distribution, please consider where your prospective distributors stand, what sort of lobbying efforts the money from your brand would support, and what recourse you would have, should that relationship ever go awry.”

Congratulations to Jester King!

Here are the winners at past conferences:

2014 – Jester King Brewery, Austin, Texas
2013 – David Katleski, New York State Craft Brewers Guild/Empire Brewing Co
2012 – Tom McCormick, California Craft Brewers Association
2011 – Dan Kopman, St. Louis Brewery/Schlafly Beer
2010 – Steve Hindy, The Brooklyn Brewery
2009 – Eric Wallace, Left Hand Brewing Company
2008 – John Carlson, Colorado Brewers Guild
2007 – George Hancock, Pyramid Brewing Co.
2006 – Daniel Bradford, past BAA President
2005 – Marc Sorini, McDermott Will & Emery
2004 – Marc Sorini, BAA Counsel
2003 – Jim Parker, Oregon Brewers Guild
2002 – Mike McKinney, Texas Wholesalers Association
2001 – David Edgar, Past Institute for Brewing Studies Director
2000 – Fred Bowman, Portland Brewing Co.

Flip-flop by Texas craft brewers ignores one thing: They’re fighting the laws that help them

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Texas has one of the strongest craft brew environments in the country, made even stronger by a package of laws that crafts and distributors hammered out and agreed to during the last legislative session.

Less than a year after those laws took effect, however, the legislative director of the state’s craft brewers group is backpedaling on one of the laws his group originally supported in order to get their wish list passed – and the law’s House sponsor, Rep. Charlie Geren, R-Fort Worth, is not AT ALL pleased about the switch.

“I’m very disappointed that he’s bringing this up, and I’m not going to go into the next session with a very good taste in my mouth with him starting this crap this early,” Geren, a restaurant owner and House chairman, told the Texas Beverage Industry Journal on Friday. “It is the law, and I’m going to fight to keep it the law.”

The law in question codified a ban on brewers being able to sell their distribution rights – a practice that forces distributors to pay the brewers to distribute their brands, something that was already illegal anyway.

The law was part of a historic overhaul of the craft brew laws, a package touted as some of the best pro-craft legislation in the country, allowing them to self distribute and serve their own beer on site and a host of other things that craft brewers have been wanting for years but were stymied on by Big Beer, which didn’t want the competition it would create. In short, it was a huge win.

The problem now is that the craft brewers are apparently, as Geren says, “changing spouses” and backing off on their support – now that the distributors helped get them the hookup during the session (convenient!).

On Thursday, Scott Metzger, who sits on the board of the Texas Craft Brewers Guild, told members of the House Economic Development committee that while some of the laws passed during the session were good, the franchise law that was part of the package is bad for them – even though they signed off on it last year.

His complaints are that craft beers want to charge distributors for the privilege of promoting their beers, and they want to be able to fire distributors at will and sell their brands’ distributing rights to another distributor for no reason.  The franchise law prevents both of these things, which are already prohibited anyway.

Not only is he wrong that the law is bad for craft beers – it’s actually very good for craft beers because it empowers distributors to invest in the success of their brand – but he’s also doing an about-face on his position during negotiations that everyone thought were being done in good faith.

This type of thing does not sit well with anyone who has ever lost blood, sweat and tears during political negotiations, particularly when they’ve gone out on a limb, like the distributors have, in order to pass a package everyone was happy with.

“Their group and their lobbyist all agreed to this,” Geren said. “It was a package deal and everybody signed off on it. It’s awfully fast to be changing spouses here, I think.”

Besides being bad politics, it’s just a bad position to take, period. The franchise law helps the craft brewers by protecting the investment a distributor makes in their brands when they spend their money and infrastructure promoting and selling the brewers’ beer for them, Geren said.

For example, Geren says, Metzger, who owns Freetail Brewing Co. in San Antonio, chooses to avail himself of that system even though he is free to avoid the issue altogether s and distribute his products himself, which even Budweiser and Miller and the other Big Beer guys can’t do. Craft brewers choose the system because it works for them, the way it is.

“He can distribute the beer himself, legally, today, but instead he chooses to use the system,” Geren said. “If he chooses to use the system through the bigger guys (distributors), they have an infrastructure already in place. They spend a lot of money on advertising, on the trucks, on labor, and he’s taking advantage of that when he uses the system. And if he wants to be paid for that, he’s nuts.”

After all, Budweiser doesn’t charge La Mantia distributors every time it rolls out a new beer – what would be the incentive for La Mantia at that point?

Metzger also complained about part of the law that makes it difficult to break contracts with distributors or fire them at will, saying it restricts the craft brewers’ ability to make money off a valuable brand. Big beers can’t just dump a distributor for no good reason, but craft beers want to.

But ask yourself this: Why on EARTH would a distributor even bother to pour its infrastructure into building up a brand, getting it into bars and stores (they’re the ones who send the beer girls to the sports bars, for example, to introduce patrons to their beers), only to have it taken away for no reason and sold to another distributor to enjoy the fruits of the first company’s hard work and valuable resources?

No thanks.

“You don’t want to build up this guy’s market and then have him jerk it out from under you and give it to the competition,” Geren said.

Distributors invest millions of dollars in craft brands and undertake long term commitments in warehouse build-outs, marketing, refrigeration systems, rolling  stock, and employment commitments. Simply put, franchise laws prohibit a brewer from unfairly taking that investment.

The law allows a distributor to invest heavily in new and emerging  brands without risk that the investment will be unfairly taken from them without compensation.

This only HELPS the craft brewers and also shuts down opportunities to game the system unethically – but Metzger and the others don’t seem to realize that.

Geren warned that the guild did very well last session and should be careful about opening up the can of worms again so soon.

“They’ve got a good thing going, and I hope they don’t try to screw it up,” Geren said. “The one thing I’ve learned in my 13 years down there is that you can pass laws that cut either way.”

Pretty clear warning shot across the bow, isn’t it?

I understand that craft brews want to keep growing, and the thing is, the package of laws that was passed in 2013 help them enormously because it bolsters them AND it protects the distribution network that makes the Texas industry one of the strongest in the country.

Putting the screws to that network will only hurt the craft brews, and the sooner they realize that, the better off they’ll be.

Your Turn: Join the TABC biennial strategy session on Tuesday

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It’s your turn to tell the Texas Alcoholic Beverage Commission what their priorities should be – and as a vital part of Texas’ celebrated alcoholic beverage industry, the TABC needs to hear from you.

Clear the decks next Tuesday, March 25, and plan to join the TABC to discuss the agency’s strategic plan for 2013-17  - how the TABC has progressed on those goals so far, and what new strategic and operational goals they should prioritize for the future.

Below I’ve pasted the letter to TABC stakeholders about the meeting. Click here to see the operational goals developed – with your help – in 2012.

Please mark your calendars – hope to see you there! If you can’t make it, we strongly encourage you to send your thoughts to Beck, whose info is posted below.

 

Dear TABC Stakeholders,

As you may know, as part of TABC’s biennial strategic planning process, we invite feedback from agency stakeholders in order to develop long-term priorities as well as operational goals and strategies related to how the agency serves its customers.

Following the agency’s Commission Meeting next week, starting at 1:30 pm, we invite you to join us to discuss the progress made in achieving the operational goals identified two years ago (as listed below). We are asking for your participation and feedback to help identify which goals have been accomplished, which should be continued, and what new goals we should consider.

DATE: Tuesday, March 25, 2014

TIME: 1:30 PM

LOCATION: Commission Meeting Room, 1st Floor, 5806 Mesa Drive, Austin TX 78731

If you are unable to attend the meeting, we would appreciate any input you can provide via e-mail or telephone. My contact information is listed at the bottom of this e-mail.

To view a copy of the agency’s FY 2013-2017 Strategic Plan, please visit our website:

http://www.tabc.state.tx.us/publications/agency_report_archives/strategicPlan13.pdf

Please let me know if you have any questions or would like additional information. I look forward to hearing from each of you with your comments and suggestions, and I hope to see you soon.

Carolyn Beck
Director of Communications and Governmental Relations
Texas Alcoholic Beverage Commission
512-206-3347
Carolyn.Beck@tabc.state.tx.us

 

First round: Time to update the TABC’s operational plan

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On March 25, 2014, stakeholders in Texas’ alcoholic beverage industry will meet to discuss how much progress the Texas Alcoholic Beverage Commission has made on the following goals, set out in March 2012, and what needs updating for the future. Details of the meeting here.

After your input, here’s what they came up with in March 2012. This will be the subject of Tuesday’s meeting. See you there!

(Click Read More to see the March 2012 goals, or scroll below)

Historic milestone for craft brews in Texas – first TX brewpub to distribute keg under new laws

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AUSTIN _ We have ourselves some history in the making tomorrow, when Uncle Billy’s Brewery & Smokehouse in Austin becomes the first Texas brewpub in the history of Texas to have its beer distributed through a third party to bars and restaurants across Texas.

The Friday afternoon event is open to the public and is made possible by a slate of legislation passed in the Texas Legislature last year that expands the reach of craft brews, allowing shipping breweries to serve on site and brewpubs to serve, well, everywhere else, for the most part.

“Never before has a brewpub in Texas been allowed to distribute craft beer outside its own four walls through a third party distributor – the new laws and the collaboration with distributors have made this a reality,” said Uncle Billy’s co-owner Rick Engel. “It’s an amazing time to be a brewpub in Texas, and Uncle Billy’s is proud to take the first step in this exciting new era.”

Engel said, “Now, the great craft beer Uncle Billy’s has always been known for can be enjoyed not just at our pub, but also at other restaurants and bars they may choose to frequent.”

When Uncle Billy’s Green Room beer is tapped at Li’l Woodrow’s on Friday afternoon, it’ll mark the end of a historic journey from hops to taps – a trip made by so many brewpubs from OUT OF STATE, and so many crafters in state, but never by a Texas brewpub.

“This event celebrates the future and vision of an industry expected to contribute $5.6 billion to the state economy annually within the next decade,” said Texas state Sen. Kevin Eltife, who sponsored the new laws. “We congratulate Uncle Billy’s on this day of recognition.”

We at TBIJ could not be happier that this milestone is being reached – not just in Austin, but by Uncle Billy’s, whose owner Rick Engel opened the first brewpub in the entire state back in the day.

Thanks for making history again, Rick, and for allowing us to tell another success story about the new laws, craft beer in Texas, and how well the system works for people who love to create and consume great beer.

Event details below, and read full press release here:

What: Senator Kirk Watson and Mayor Lee Leffingwell will tap and serve up the first distributed authentic craft brewed keg.

When: 3:00 p.m., Friday, February 7th

Where: Little Woodrow’s, 520 West Sixth Street, Austin 78703

Who: Representative Rodriguez, Mayor Leffingwell, Keg 1 COO, Uncle Billy’s co-founder and Little Woodrow’s management & staff, and craft beer lovers.

Rick Engel, Uncle Billy’s co-founder, Welcome

Travis Erwin, president and COO, Keg 1 distributors

State Representative Eddie Rodriguez and Mayor Lee Leffingwell  Tapping of the keg and cheers to the milestone

 

MEDIA ALERT: BREWPUB TO DISTRIBUTE FIRST CRAFT BREWED KEG (UPDATED)

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(Updated below on 2/7 with statement from Beer Alliance)

FOR IMMEDIATE RELEASE

Contact:

Sarah Marshall

512.699.8208

smarshall@crosswindpr.com

BREWPUB TO DISTRIBUTE FIRST CRAFT BREWED KEG

Changes in State Laws Help Industry to Flourish

 

AUSTIN, TX, February 6, 2014 – Uncle Billy’s Brewery & Smokehouse will become the first Texas brewpub in state history to have its beer distributed through a third-party to local bars and restaurants across Central Texas.  Changes in state laws have loosened limitations for craft breweries throughout Texas – a milestone for the state, for the industry, and for the people who love delicious craft beer.

On Friday, February 7th, a keg of the brewpub’s Green Room IPA will be delivered to local bar Little Woodrow’s by a distributor and served on tap to patrons in a public tapping and celebration.

“Never before has a brewpub in Texas been allowed to distribute craft beer outside its own four walls through a third party distributor – the new laws and the collaboration with distributors have made this a reality,” said Uncle Billy’s co-owner Rick Engel. “It’s an amazing time to be a brewpub in Texas, and Uncle Billy’s is proud to take the first step in this exciting new era.”

Engel said, “Now, the great craft beer Uncle Billy’s has always been known for can be enjoyed not just at our pub, but also at other restaurants and bars they may choose to frequent.”

“This event celebrates the future and vision of an industry expected to contribute $5.6 billion to the state economy annually within the next decade,” Senator Kevin Eltife said. “We congratulate Uncle Billy’s on this day of recognition.”

At one time, the future was limited not by the imagination and passion of the brewing industry, but by the laws that limited their ability to grow and compete with out-of-state breweries.

In June 2013, the Texas Legislature passed reforms for the craft beer industry, allowing small packaging breweries to serve their beers on site in taprooms and brewpubs like Uncle Billy’s to have their beers distributed and sold off site.

Until these laws were enacted, that was illegal in Texas, while wineries and out-of-state brewpubs were allowed to distribute freely to retailers, creating an advantage for wineries and non-Texas breweries. .

But when distributor Austin-based Keg 1 delivers that first keg of Green Room IPA from Uncle Billy’s to Little Woodrow’s, that barrier will be shattered.

“We are thrilled to be a part of this historic moment and collaborating with Uncle Billy’s,” said Travis Erwin, president and COO, Keg 1 distributors. “We are turning on the faucet for more distribution of craft beer in Texas.”

“It’s officially a new day for brewpubs in Texas, and it’s been a long time coming,” said Charles Vallhonrat, executive director, Texas Craft Brewers Guild. “Brewpubs like Uncle Billy’s deserve the opportunity to grow and thrive as craft beer popularity sky rockets across the state.”

The new laws were the result of months of hard work by the Texas Craft Brewers Guild, Brewery stakeholders, the Beer Alliance of Texas, courageous state lawmakers and countless consumers, enthusiasts and activists.

The reform was a nod to the exploding popularity of craft breweries in Texas, whose numbers have nearly tripled just in the last five years. There are now nearly 100 licensed breweries in Texas who contribute hundreds of millions to the economy on an annual basis, up from 37 licensees in 2008.

In less than six months since the enactment of those laws, craft breweries in Texas already have plans in place to invest over $30 million in new production and facilities.

About Uncle Billy’s Smokehouse & Brewery

The pioneering spirit runs deep at Uncle Billy’s. In 1993, Engel opened the Houston’s first brewpub since Prohibition, and became an activist for the right to brew freely and without hefty limitations. In 2006, he co-founded Uncle Billy’s, named after William “Uncle Billy” Barton – one of the earliest settlers and affectionately known as one of the founding fathers of Austin.

Uncle Billy’s has won multiple medals from the Great American Beer Festival over the past six years as well as a very prestigious bronze in The World Beer Cup.

 

FOR IMMEDIATE RELEASE

February 7, 2014

Statement from Rick Donley, President, The Beer Alliance of Texas, LLC, regarding today’s historic tapping of the state’s first distributed malt beverage keg from a brewpub to a retailer.  Uncle Billy’s Brew & Que will be the first brewpub in the state to distribute their own product to retailers for sale to the public under newly implemented laws.  The craft beer, the Green Room IPA, will be offered at Little Woodrow’s in Austin.

 

AUSTIN, TX - “Congratulations to Uncle Billy’s Brew & Que and KEG 1 for being the inaugural brewer and distributor in the State of Texas to demonstrate the real world impact of forward thinking legislation.

Today’s event demonstrates the economic effects of market-responsive legislation passed by the Texas Legislature in 2013. The legislation provides an opportunity for brewers and retailers across the state to create jobs, grow the economy, expand consumer choice and enable the development of the craft beer and ale sectors.

The Beer Alliance of Texas and our member organizations like KEG 1 are proud of our advocacy efforts in this arena.  With the help of key legislators, we were able to broaden in-state craft manufacturing and implement sensible, modest enhancements of brewing limits, market constraints and distribution arrangements to make this an economic reality.”

For information on today’s event, please visit HERE.

 

ABOUT THE BEER ALLIANCE OF TEXAS, LLC

 

The Beer Alliance of Texas is a trade association representing beer distributors from the coastal region to the panhandle, far West Texas to the Valley. Our members strictly adhere to today’s state-based regulatory model, including maintaining the three-tier system, while exploring new technologies and marketing to better serve the interests of Texas retailers and consumers in the malt beverage industry.

 

Judge reverses New Braunfels can ban, says it’s unconstitutional

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Not that we didn’t already know that, nor did we believe that this whole brouhaha was all about the environment.

Good on you, Judge Don Burgess, for that summary judgment, which found the law also unenforceable.

Burgess’ decision upholds what many of us already  knew – that only the state can put these kinds of limits on alcohol consumption (kind of like how the open container laws in downtown Austin are not legit, either) and the can ban was overreaching and confusing, at best.

We’re still absorbing this information and will be reporting more about what it means in the coming days, including posting the judgment as soon as we get it.

The lawyers for the plaintiffs are saying their next move is to ask for legal fees and for a permanent injunction against this type of ordinance.

But for now, applause.

Reuters reporting that AB InBev likely to buy Oriental Brewery for $4.5 billion

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The newswire Reuters has an exclusive report citing anonymous sources who say that Anheuser-Busch InBev SA, the world’s largest brewer,  is in talks with owners of the South Korea-based Oriental Brewery to buy the shop for a whopping $4.5 billion.

“The parties are hammering out final terms of what would be one of Asia’s biggest ever private equity transactions with the aim to reach an agreement before the end of January,” the report said, citing people “familiar with the matter.”

AB InBev sold Oriental in 2009 with the option to buy it back before July of this year, according to the article, which also says the deal could be done as early as next week – if it closes at all.

“Discussions on the sale are continuing but they could still fall apart and there is no guarantee a deal will be struck, the people cautioned, asking not to be named because the matter is not public,” the report said. “If final terms are agreed, a deal could come as early as next week, one person added.”

Read the entire report here. 

Small brewery making push for wet/dry election, thanks to new laws

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And it looks like they’re getting help from the local media, whose coverage of the Save the World Brewing Co. in Marble Falls, Texas – namely, its hope for changing the law to let it sell beer on site – is decidedly positive. Thanks, KXAN!

From their report:

“Owners of a new brewery in the Hill Country may have hit a snag, but they aren’t giving up. The Save the World Brewery is actually in a part of Marble Falls where they can’t sell alcohol. Now, they need the public’s help to change existing laws.”

Indeed they do. It’s a unique conundrum that wouldn’t have been an issue had it not been for the new laws that expand breweries’ ability to sell their beers – including letting them sell on site.  The brewery can make beer, which was fine because they didn’t sell it on site – and couldn’t – and thus had no issue with county ordinance that prohibits them from selling beer in their particular part of Marble Falls.

Now that new laws let breweries sell beer at the facility, Save the World wants to take advantage of it – like so many local breweries are doing – but it can’t.

Yet.

Click here to see the story and talk to them here to find out how you can help.

Beaumont Enterprise: Have a very craft beer New Year’s

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Now THIS is a NYE idea we can get behind. Ditch the champagne bottle and get yourself a craft beer bomber to celebrate New Year’s Eve!

Thanks to the folks at the Beaumont Enterprise for this charming East Texas approach to the holiday season: Starting the new year right with a celebration of the great year we had in Texas for Little Brews.

“Replacing champagne with beer involves several schools of thought. You could swap for the champagne experience and go for cork tops and blonde color in your beer. Or you could shop for champagne flavor — that almost sour taste that comes with a glass of bubbly. If you’re feeling more detail-oriented, you could pick a bottle brewed with grapes or aged in wine barrels.”

Click here to read on for a few suggestions, and have yourself a Beer-y Happy New Year!

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