We should always celebrate more freedom in our lives. December 5 is no different. Eighty-six years ago, Prohibition was repealed.
This year, Texas can celebrate its own version of Repeal Day. This December marks three months since another kind of prohibition was abolished—on beer to go. On September 1, Texans were finally allowed to buy their favorite craft beer at a local brewery to bring and drink at home.
Until that date, Texans could buy wine to bring home from a local winery and distilled spirits from a distillery, but in most cases, not beer from breweries. The places that brew beer and were able to sell to-go had to be licensed as brewpubs—not breweries—which have low production caps in comparison.
If this sounds complicated, that’s because it is. After Prohibition, most states adopted a system called the three-tier system, which separates the alcoholic beverages industry in three tiers—manufacturers, distributors, and retailers—and strictly regulates them. The system has long been both complex and unfair in how it regulates different sorts of alcohol and players. Craft beer had to fight for its freedom to grow, and Texas has been dispensing that freedom drop by drop over the years, sometimes even taking it back.
But the recent legislative session saw some improvements on several fronts. The Legislature reduced the number of licenses and permits needed to operate, simplified the label application process, and ended the distinction between beer and ale—all of which made it burdensome and more costly for brewers to operate, with no benefits for consumers or public safety.
However, to paraphrase Gov. Abbott, what we really cared about was beer-to-go. Despite bipartisan support in both chambers of the Texas Legislature, beer-to-go was ignored in the relevant committees—and only later adopted when amended to another bill.
But what does it have to do with freedom? A lot—on all fronts.
First, consumers will have more choice. If you visit a brewery and you like the beer, you don’t need to visit several supermarkets to find it (as has happened to me); you can simply buy some at the brewery until your next visit to the store. It also might be the wise decision to make, rather than drinking on-site before driving home—with public safety benefiting along the way.
For brewers, it means more of their products are finally available to more consumers. That’s especially true of less-common varieties of beers that may not find space on retailers’ shelves. The new law also allows Texas brewers to compete with breweries in other states that already could sell beer to go—benefiting businesses and the Texas economy along the way.
Back in 2013, when the Texas Legislature passed a law authorizing breweries to open taprooms to sell their own beer (for on-premises consumption), 96 craft breweries were operating in Texas. The number rose to 251 in 2017. Those new jobs—and the economic boost to their communities—show how helpful a little liberalization of a market can be.
Finally, as less well-known beers benefit from being more easily available to consumers, demand is created at retailers—benefiting both distributors and retailers.
I like to call this the freedom multiplier effect: A small liberalization can go a long way.
Let’s not rest on our laurels though; more can still be done. Craft brewers are still restrained from operating more efficiently by burdensome contract provisions with distributors, which are currently set in statute. Worse, since 2013, craft brewers have been barred from selling their distribution rights to distributors, but distributors can resell them for a profit. This is hardly the kind of market freedom Texas is so proud to boast about.
On Repeal Day, all Texans should raise their glasses of cold craft beer to toast a little more freedom in our lives. Let’s also seize the occasion to consider what other burdensome regulations could be repealed so the freedom multiplier effect can apply to the benefit of us all.