Texas craft brewers lobby for state bills that would let them deliver to customers, incentivize grain donation

The past five years have been rough for breweries, especially independent brewers that have one foot in manufacturing and another in hospitality. There are now three bills making their way through Texas’ crowded legislative session to give the businesses some relief.

Leaders at the Texas Craft Brewers Guild, which represents the state’s independent breweries, said the three bills have bi-partisan sponsorship and are “common sense” measures.

Two bills aim to modernize outdated laws that hamper efficiency and unnecessarily deny breweries the same rights as wineries have had for two decades. A third bill gives a tax break for supporting farmers and ranchers.

The so-called “Beers for Steers” bills — Senate Bill 1554 and House Bill 4773 — will have a committee hearing in front of the House’s Ways and Means Committee on Monday, April 7. While it’s common practice for breweries to give away spent grain to farmers and ranchers as cattle feed, the bill would expand the relationship between the brewing and agricultural industries by providing a tax credit that could be used to decrease the excise tax charged on every barrel of beer distributed.

Up to 40% of a cow’s or steer’s diet can be made up of the nutrient-rich grain, most commonly barley, left over from the first step of the brewing process. The guild estimates it will save about $3,500 in feed costs annually per animal. That leads to higher profits on milk production and cattle sold for meat.

“By incentivizing the donation of spent grain, we’re reducing waste, supporting small businesses and providing ranchers with an affordable and readily available feed option for their livestock,” said State Rep. Brad Buckley, R-Salado, who introduced the bill.

State Senator Pete Flores, R-Pleasanton, is backing the Senate version of the bill.

“[T]he generosity of brewers in donating spent grain has already been happening informally, but we want to encourage it on a larger scale,” Flores said in a statement distributed by the guild.

Independent craft brewers have a $5.3 billion annual impact on Texas’ economy, according the Brewers Association. However, the COVID-19 pandemic, sharp increases in supply costs and Gen Z’s changing drinking habits have led to brewery closures, consolidations and sales, including several in San Antonio.

“This targeted tax relief will help breweries mitigate some of these increased expenses as they continue to create jobs and foster economic growth within their communities,” said Travis Bailey, government affairs associate for the Texas Craft Brewers Guild.

On the consumer side, breweries are seeking the ability to ship or deliver beer directly to customers. The “Beer to You” bill is being carried by Pleasanton’s Flores in the Senate and State Rep. John Bucy III, D-Austin, in the House.

Texas wineries have been able to deliver to consumers since 2005. Restaurants and retailers can deliver beer and wine to households directly or through delivery services, but companies such as DoorDash, GrubHub and Favor are prohibited by law from picking up canned or bottled beer from breweries to hand off to customers. Food from brewpubs can be delivered, however.

Lawmakers filed the same bill in 2023, but it never received a committee hearing during that session, said Caroline Wallace, executive director of the Texas Craft Brewers Guild.

It took six legislative sessions over a dozen years for the “Beer to Go” bill to get lawmakers’ approval in 2019. That law applies to microbreweries, which operate under a different license than brewpubs. It lets brewery visitors purchase and take home a limited amount of beer.

While the rule change didn’t become a big moneymaker for breweries, it does help build awareness and affinity for a brand and puts taprooms on a more even footing with wineries and distilleries, which were able to sell bottles to go for years.

Breweries first asked for the ability to deliver directly to the consumer when the pandemic closed down taprooms in 2020. Gov. Greg Abbott temporarily granted that ability to bars and restaurants, and the measure was made permanent by the Legislature in 2021. However, breweries were left out in the cold both in the executive action and the new law.

An overwhelming majority of regular craft beer drinkers across the country are in favor of beer shipments and delivery from breweries, according to a recent survey by the Brewers Association. They survey found 92% said they would order beer shipments or deliveries from a brewery once a month or more if laws gave the ability to do so.

Wallace of the Texas Craft Brewers Guild said the Texas Legislature “has an opportunity to support the growth of beer tourism in Texas as brewery visitors send products home, join beer clubs, order food delivery from a local brewpub, and support their favorite small beverage producers regardless of proximity.”

Under the proposed law, breweries would be subject to the same sales requirements and state liquor laws as other industry members currently engaging in home delivery and shipping. What’s more, Wallace said existing brewery sales and barrelage caps under the law wouldn’t change.

The third bill addresses a more behind-the-scenes issue faced by breweries with multiple locations. A brewing company with more than one location would seem to have some advantages such as filling in a shortage of one beer by moving a few kegs from another location.

“Instead of simply reallocating inventory internally, they encounter a mountain of red tape,” Wallace explained. “This can involve paying a distributor to move their own product between their own facilities or structuring their locations as separate business entities just to sell the product back to themselves — requiring state and federal product registration which would otherwise only be necessary if the beer was entering the broader marketplace. This is illogical, inefficient and slows down product availability.”

Beer producers with a microbrewery license have some workaround options, such as making a processing change to the alcoholic beverage when it reaches the second location. Those with brewpub licenses, however, don’t have such options.

The bill has Republican authors in both chambers of the Legislature — State Sen. Mayes Middleton of Galveston and former speaker Dade Phelan in the House.

Middleton called the proposed changes to outdated regulations a “commonsense, free market bill” that would meet consumer demand and create more jobs.

“Current law forbids brewers from doing the simplest thing: transporting their own craft beer between restaurants and facilities that those same brewers own,” Middleton said. “Unnecessary government red tape like this are the kind of policies that make no sense to Texans and stifle economic growth.”

The chance of any of these bills to receive a vote in both houses before lawmakers adjourn the session could be slim, though. Abbott and Lt. Gov. Dan Patrick, who controls the Senate’s agenda, have both vowed to stall any legislation not on their list of legislative priorities until their favored bills pass. 

This article appears in Apr 2-15, 2025.