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Craft Brewing Business

Texas appeals judge’s decision, hopes to still screw craft breweries

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We ask again, Texas: Why is this a thing you are trying to do?

The State of Texas is still trying to favor distributors over the craft beer industry, according to the Institute for Justice, a nationwide activism group. The Texas Alcoholic Beverage Commission has filed a notice of appeal in Live Oak v. Texas Alcoholic Beverage Commission. This is the case that involves a Texas law that was passed in 2013, which required craft brewers to give beer distributors millions of dollars’ worth of distribution rights for free.

In August, an Austin trial court declared that the law violated the Texas Constitution. The Third Court of Appeals, in Austin, will now hear the government’s appeal of that ruling.

Following news of the appeal, Institute for Justice Senior Attorney Matt Miller, who represents the brewers in the case, issued the following statement:

“The trial court correctly saw that this law was written by distributors to do one thing: enrich themselves at the expense of craft brewers. That is unconstitutional, and we are confident the appellate court will agree.”

We’ve already done our fair share of editorializing on this news. The Institute for Justice, which brought this to our attention, wrote up a pretty great in-depth feature that points out the ridiculousness of this law.

There is no public purpose to this law. Texas is simply using the public power of the legislature for the private gain of beer distributors. Amazingly, the law forces breweries to give up their distribution rights for nothing, but distributors can turn around and resell those same rights for whatever price the market will bear. This case will determine whether Texas brewers can keep these valuable property rights in the businesses they built.

We encourage you to go read the full write-up from the Institute here.

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