Beer Bills for the 2025 Texas Legislative Session
Despite it being 2025, Texas still primarily adheres to the outdated 3-tier system established at the end of Prohibition. This system mandates that breweries sell to a distributor first, rather than directly to consumers. Distributors then sell to retail outlets, which subsequently sell to consumers.
This situation is ironic because wineries and distilleries in Texas can already operate differently. Although this observation seems logical, this is Texas, where such governance had been overlooked. Nonetheless, some laws have changed for the better. If Texas breweries and their supporters have anything to say about it, this and other outdated beer laws will change.
It wasn’t until a lawsuit filed in 2011 by Austin brewery Jester King and two other co-plaintiffs that breweries were able to list on their websites where consumers could buy their beer, accurately label their beer regardless of the ABV (alcohol by volume), and use adjectives that described the beer’s strength. Later, brewpubs were allowed to distribute their beer to retail outlets without a distributor, subject to annual barrel production limitations, and sell beer for takeout (2019).
In Texas, the prohibition on breweries shipping their products directly to consumers remains unchanged, unlike the regulations for wineries, retail stores, and third-party applications. This situation primarily arises from post-Prohibition laws that historically constrained the beer industry.
Two years ago, in the final session of the Texas Legislature, a significant bill crucial to breweries’ financial stability across the state was proposed. Texas State Senator Pete Flores and State Representative Shelby Lawson introduced SB752 and HB2003, known as the Beer-To-You bills, to ensure that state liquor laws are uniformly enforced.
If passed, these bills, supported by the Texas Craft Brewers Guild and its political action committee CraftPac, would have enabled Texas breweries and brewpubs to ship directly to consumers’ homes and use third-party apps like Drizzly for deliveries, as well as ship beer across Texas through third-party carriers, thereby increasing sales and exposure for breweries.
Photo courtesy of the Texas Legislature
Unfortunately, Texas breweries were once again thwarted by the state’s often biased and antiquated beer laws. While wineries have benefited from these provisions, the legislative session concluded in May of that year without the bill passing.
Fast forward to 2025, and the Texas Legislature will review several bills that directly affect the state’s beer industry and alcohol regulations, including a new version of the Beer-To-You bills. Rebranded as SB246, Beer-To-You is making another attempt at passage. Once again sponsored by Senator Flores, this bill now also includes distillers. The companion house bill, HB2441, is sponsored by Senator John Busey of Cedar Park and pertains solely to breweries and brewpubs.
The second set of bills addresses the inter-facility transfer of beer, or the beer movement between different locations of the same brewery. Currently, Texas prohibits breweries from transferring finished beer between their owned facilities. Instead, breweries must sell the beer to a distributor and then repurchase it at a marked-up price to relocate it from one location to another.
Even if a brewery has two locations just blocks apart, the beer may travel hundreds of miles rather than merely a short distance to reach its destination. Senate bill SB1240, authored by Senator Mayes Middleton, and House bill HB4773, authored by Senator Dade Phelan, seek to resolve this issue. However, they tackle it from slightly different perspectives. The key factor is where the production of the finished beer is attributed, either to the receiving or producing facility. SB1240 attributes production to the receiving facility, while HB4774 connects output to the producing facility.
Travis Bailey, the Texas Craft Brewers Guild’s (TCBG) government affairs representative, stated that regarding the seemingly conflicting Senate and House bills, “Ultimately, that’s going to end up getting kind of worked out in conference, hearings, and committee substitutes. We’ve had conversations about both, about why both sides are good.”
For a state that frequently promotes its business-friendly environment, many breweries find it perplexing that such a restrictive law remains in effect, impacting their profitability. Concerns also arise regarding how accessible beer shipped directly to homes would be for underage individuals and how it could potentially increase underage drinking. In contrast, wine shipped directly to consumers, despite its higher ABV (alcohol by volume), is deemed acceptable.
“There’s R Street, a conservative think tank group studies this issue. Using the CDC’s youth risk behavior survey, they’ve documented that the decline in underage drinking over the past 20 years has not been significantly influenced by the allowance of wineries shipping directly to people’s homes,” Bailey explained. “Most of the reason behind that is you’re not ordering party beverages for high school gatherings. You’re ordering higher-quality, more specific products.”
The third bill that the TCBG monitors addresses potential tax breaks for farmers who receive spent grain from breweries and distilleries, leftover after brewing. SB1554 and HB3336, which focus solely on breweries, were introduced by Senator Pete Flores (with Senator Sarah Eckhart) and Representative John Busey. These bills enjoy bipartisan support, which enhances their prospects for passage.
With significant progress made in the last couple of legislative sessions and continued advancements this session, the Texas Craft Brewers Guild is optimistic about the changes resulting from the passage of these bills. “Over the last 16 years, we have come a long way, and we couldn’t be prouder of the strides our industry has made on that front,” Bailey remarked.
