TABC Press Release

FOR IMMEDIATE RELEASE   June 15, 2013

New craft beer laws signed by Governor Perry, go into immediate effect.

On June 14, 2013, Governor Perry signed several bills into law that could change the face of the craft brewing industry in Texas.

Senate Bill 515 by Senator Kevin Eltife (Senate District - 1, Tyler) authorizes a brewpub to manufacture up to 10,000 barrels of malt beverages annually instead of 5,000. Previously, Texas brewpubs were only authorized to sell their product directly to consumers who visited their establishments. SB 515 authorizes brewpubs to sell their own malt beverages to distributors for resale. Consumers will soon begin finding more craft beers available in stores, bars and restaurants that were produced at brewpubs right here in Texas.

Those brewpubs holding a Wine and Beer Retailer's Permit (BG) who sell only their own alcoholic beverages to consumers are authorized under SB 515 to sell those products directly to retail locations (up to 1,000 barrels annually), and to any qualified person outside of Texas. This is in addition to selling their products to beer distributors. The 1,000 barrels that can be sold direct to retailers are included in the 10,000 barrels that can be produced annually. This is not an additional 1,000 barrels.

What's the next step for brewpub owners?

  1. A brewpub who wishes to sell their products for resale is required to obtain product and label approval from TABC. An application and two samples must be submitted for each product that requires approval. A product analysis from an independent laboratory may be submitted in lieu of the actual samples. If a brewpub wishes to distribute outside of Texas, then a federal Tax and Trade Bureau Certificate of Label Approval (COLA) must be submitted with the application for label approval. Please allow up to three weeks for TABC to process the application. For more information and an application form, visit our Label Approval page.
  2. A brewpub owner who wishes to sell their product through a distributor is required to file a territorial agreement with TABC. Each brewpub is required to designate territorial limits in Texas within which each of their brands may be sold by distributors or wholesalers. At a minimum, the agreement should define the exact territory, designate the parties to the agreement as well as the brands covered by the agreement. A manufacturer may not assign all or any part of the same sales territory to more than one distributor. Please note that newly enacted Senate Bill 639 prohibits manufacturers of malt beverages from accepting payment in exchange for an agreement setting forth territorial rights.
  3. A brewpub that intends to sell their own product directly to retailers should notify TABC's marketing practices division of their intent. Please note these brewpubs must hold a Wine and Beer Retailer's Permit and may not sell any alcoholic beverages other than their own in their establishment. Sales to retailers must be paid for in cash or cash equivalent on or before the time of delivery in accordance with Section 102.31 of the Alcoholic Beverage Code. If a check or electronic draft is dishonored by the bank, this must be reported to TABC by the brewpub within two days.
  4. TABC will not require additional reports to be filed by brewpubs; however, an updated excise tax reporting form will be available on the TABC website for their use before July 1, 2013.
  5. For advertising questions contact Marketing Practices or call your local TABC office.

Senate Bills 516 and 517 by Eltife apply to brewers and manufacturers who produce less than 125,000 barrels of malt beverages annually. Under current law, a brewer or manufacturer who makes less than 75,000 barrels annually can sell any amount of their product direct to retailers. Under SB 516 and SB 517, a brewer or manufacturer who produces less than 125,000 barrels annually can obtain a self-distribution license and/or permit and sell up to 40,000 barrels direct to retailers.

Senate Bill 518 by Eltife applies to manufacturers and brewers who produce less than 225,000 barrels annually. These establishments are now authorized to sell malt beverages to visitors of the brewery to drink on-site. The malt beverages must be produced on the premises and no more than 5,000 barrels annually may be sold to consumers. Malt beverages may be sold and consumed on the premises between the hours of 8 am and midnight on any day except Sunday, and between the hours of 10 am and midnight on Sunday.

What's the next step for small brewers and manufacturers?

A brewer or manufacturer who intends to sell their products to consumers will be required to obtain a Sales and Use Tax Permit from the Office of the Comptrollerexternal link. Many Texas breweries may already hold this permit.

Although the new laws go into effect immediately, the new self-distribution license and permit will not be available until near the end of 2013. TABC will allow brewers and manufacturers who meet the production criteria to continue to sell their products directly to retailers without holding the new subordinate license or permit.

The agency's target date for accepting applications for the subordinate license or permit is November 2013. At this time, TABC expects the requirement for holding the new license or permit to go into effect January 1, 2014. These dates could change, and an announcement will be made closer to that time. In accordance with Section 11.09(b) of the Alcoholic Beverage Code, the expiration date for the subordinate self-distribution license or permit will be the same as the expiration date on the primary manufacturer's license or brewer's permit, regardless of when the subordinate was issued.

For additional information, please contact the following:

For media inquiries, contact Carolyn Beck at 512-206-3347.

For inquiries related to marketing practices, call Thomas Graham at 512-206-3411 or e-mail Marketing Practices.

For inquiries related to excise taxes or product registration or label approval, call Steve Greinert at 512-206-3338 or e-mail Excise Tax or Label Approval.