July 1, 2013

More drinking in Austin 2013 -- part 1

It was hot. Ass hot in Austin this weekend. For some reason breweries and many beer bars in Austin do not believe in air conditioning. That really puts a damper on enjoying beer when it is 106F outside and I'm sitting inside what is basically a giant metal box full of people. Hopefully with the new beers laws here in Texas, breweries will make some upgrades to their tap rooms and add some air conditioning.

The new laws

In the last legislative session, Texas passed a package of brewing-related laws that are considered a mix of victories and losses for the brewers. Specifically, brewers won the right to sell a portion of their beer on-site for on premises consumption in the taproom. This will start to replace the prior laws which only allowed brewers to sell glasses and give free beer in the glasses or offer free samples with their tours. Additionally, brewpubs in Texas will now be allowed to sell beer to distributors. Before the newest set of laws, brewpubs could sell for on and off premises consumption but could only sell direct to consumers. These are the biggest wins for beer drinkers because it expands our ability to enjoy great beer, even if it makes it a little more expensive to drink at breweries. (Among the losses include continued throttling of beer distribution by the state's wholesalers who have immense lobbying power.)

As a result of these new laws it is expected that several breweries will contemplate a shift from production brewing to brewpub licenses (Hops and Grain and Jester King have already made the move) because the new laws allow brewpubs to sell unlimited amounts of beer for on and off premises consumption direct to the public, self-distribute beer and sell to distributors for wider audiences. What will stop many breweries from transitioning licenses is that most breweries built into industrial-zoned spaces that are not zoned for retail purposes. It will take some time and lubrication of local governments to make those changes happen. After all, it's not like you can just haul out the fermentors from one location and set up at another. Brewers have to get licensed in spaces that are build to local health and safety code as well as state and federal alcohol licensing requirements.

It is also expected that these laws will facilitate the growth of craft beer because new breweries can move into retail/commercial-zoned space where they can build a local audience in accessible and desirable spaces. Brewpubs in Texas can also start brewing on smaller systems than what Texas requires for production brewing licenses. It will be interesting to see how this changes the state's brewing competition. Many of the nation's largest craft brewers began life as a brewpub and later expanded production facilities. I expect to see many new brewpubs popping up and some of the established breweries contemplating opening small secondary brewpub sites in trendy areas as a way to better wedge themselves in the market.

Why I went to Austin in the middle of this awful heat

The bills were just recently signed into law this month and although they went into effect with the governor's signature, many breweries have not taken steps to shift from the tour-based taproom to a more traditional pay-for-your-drinks taproom. Under the tour system you can get anywhere from several small pours to as much as 5-6 full pints for $7-10 plus you keep the glass. It's profitable for the breweries (but not nearly as much as selling per-pint) but still a great deal for consumers. I wanted to go raid Austin for cheap drinking before breweries started making the transfer, although both Hops and Grain and Jester King have taken steps to shift to the new system.

I'm pressed for time right now with my employment law firm so I don't have time today to write the goods on the beers I enjoyed so I'll have to break up the content among 2-3 posts this week.

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