Two North Texas brewers and one Austin brewer jointly filed suit against the state of Texas in an effort to overturn legislation passed last year that limits the distribution rights for their products.
The owners of Peticolas Brewing, Revolver Brewing and Austin’s Live Oak Brewing claim that changes introduced in 2013 violate the state constitution regarding personal property, prohibiting them from receiving compensation for the territorial distribution rights to their beers. Moreover, once signed over to a distributor that party may resell those rights to other distributors without the consent of or compensation to the original microbreweries. Brewers claim the law restricts the growth and expansion of their businesses.
Prior to 2013, brewers could negotiate the sale of the rights to exclusively distribute their beers with particular distributors, a valuable source of revenue for a young and growing microbrewery. This law changed with Senate Bill 639, introduced in the last session by state senator John Carona of Dallas, in an effort to “protect the independence of distributors” and avoid pay-to-play scenarios with larger breweries.
The Texas Alcoholic Beverage Commission (TABC) is named as a defendant in this lawsuit.