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Alcoholic Beverage Regulation

The regulation of alcoholic beverages in Texas remains frozen in a post-Prohibition era mindset and unnecessarily burdens businesses without necessarily benefiting public safety or consumers. The current system that forces the separation of the industry in three tiers—manufacturers, distributors, and retailers—increasingly benefits the government-imposed middleman at the expense of other tiers, resulting in less choice and higher prices for consumers. The Texas Alcoholic Beverage Code is in great need of an infusion of freedom so Texans can raise their glass to more competition to the benefit of all involved.

“Temperance in the government’s approach to the regulation of alcohol would mean a step back to let the market work instead of overburdening businesses, leading to favoritism as well as higher prices and less choice for consumers.”
— Carine Martinez

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Carine Martinez

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Recommendations

  • Allow cross ownership between brewers/distillers, distributors, and retailers.
  • Allow brewers to sell their distribution rights to distributors of their choice and to opt out of current agreements entered into under the current restrictive laws.
  • Repeal laws and regulations that create unnecessary distinctions between different kinds of alcohol (such as the difference between beer and ale or the prohibition for breweries to sell beer to go).
  • Streamline the regulation of the industry by eliminating unnecessary licenses and permits and duplication of labeling approval applications.
  • Interpret and enforce alcoholic beverage regulations consistently and in a manner that does not favor established companies at the expense of new competition.
  • Limit the role of the Texas Alcohol Beverage Code to protecting public safety; its role should not include creating a competitive environment for the industry or protecting Texans' temperance.

Talking points for liberty fighters

  • The three-tier system establishes a de facto, government-enforced monopoly to the benefit of distributors, which gives them tremendous power over the two other tiers. The current system only protects the distributors while increasing costs for producers and consumers.
  • Brewers and distributors can decide the terms of their business agreements without government imposing a one-size-fits-all mandate. Franchise laws insulate distributors from competition. Protecting one group of businesses against competition is antithetical to a free market.
  • The small liberalization of the beer market in 2013, when breweries were allowed to open taprooms and sell their beer for consumption on-site, was followed by an eruption of new brewery openings, benefiting consumers and Texas’ economy.
  • Laws and regulations that protect incumbents from new competition stifle innovation, which usually serves consumers best by creating safer, better, and less expensive products.

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