in Houston, Texas

A distributor's 'theory of warfare'

Tuesday, Mar 24, 2009, 05:10PM CST
By Matt Pulle
(Continues from page 2 and page 1)

Interestingly, lifting the restrictions on microbrewery sales may not even hurt distributors like Andrews. Only a tiny fraction of the beer-drinking public will ever visit a microbrewery in their lifetimes. And for those who do, it's typically part of a larger, leisurely experience -- not an extra stop as they're running around town completing errands.

Wagner -- who, as the owner of the St. Arnold company works with his share of distributors -- says many members of the beer lobby take a simplistic view at the microbrewery bills.

“They look at it as a zero sum game—if someone is buying a six pack at a brewery, they are not buying it at a grocery store, but that’s not how it works," he says. “It’s not like someone is going to be at a grocery store buying milk and eggs but not beer because there is a brewery six miles down the road.”

Davis, the sponsor of a bill that would allow microbreweries to sell beer where they brew it, also says that her bill won't hurt distributors. After all, the Fort Worth Democrat notes, when the legislature decided to allow wineries to sell wine from their premises, wine distributors actually saw an uptick in business. It's no secret what happened there. Wineries were able to build brand name by selling their product, and people started requesting their wines when they went out to eat or visited their grocery store.



“In this particular bill it’s hard to argue why we’d allow this right for our wineries but we wouldn’t allow it for our microbreweries.” Davis says, whose district includes the Rahr brewery. Besides, she adds, “to allow them the ability to retail from their own facility, I don’t understand why a distributor would feel that competes with what they do. Maybe I’m missing something.”

Howard Wolf would suggest politely that she is. To Wolf, who serves as the treasurer of Lt. Gov. David Dewhurst's political action committee, the beer lobby looks at politics like the French looked at Verdun. They don't want to give an inch.

“It has to do with the theory of warfare. If you are defending an entrenched position, you can not permit any breach of that defense," Wolf says. "There are huge amounts of money at stake here, and this monopoly is so entrenched and so powerful, they are going to fight as long as they can to protect this monopoly or scheme as long as they can."

Wolf ran up against the beer lobby when he served as a member of the Sunset Advisory Committee, which was then reviewing the Texas Alcoholic Beverage Commission. It was in that role, he says, that he saw how thoroughly distributors controlled the political process in Texas. After his stint, he wrote the damning report on how the state regulates alcohol, hurtling him into a direct confrontation with the beer lobby.

“I had no stake in this in any form or fashion," he says. "I just started asking honest questions in my role on the Sunset commission, and it was incredible the pushback I received. They could not tolerate any kind of an examination of this regulatory scheme."

The Austin way: Money talks

Photo by flickr user Joshua Davis, used via a Creative Commons license.

The Wholesale Beer Distributors could prove Wolf wrong if they agree to a compromise measure.

But that we're even debating whether a business can sell a legal product from its own property -- instead of relying exclusively on politically connected distributors-says a lot about how Austin works.

Two years ago, Formby, the managing partner at Rahr Brewery, talked to a lobbying firm about trying to change the alcoholic beverage code. The firm told him they'd need at least $250,000. "That offended me to no end," Formby says.

The small brewer can't afford a hired gun. But Formby, who is all business when he talks about beer, says he's not worried.

"We don’t have the money to advertise. We certainly don’t have the money to pay for lobbyists,” he says. "So we’re hoping that the good legislators of the state of Texas will be our lobbyists."

Photo of pennies, pictured above, by flickr user Joshua Davis, used via a Creative Commons license.
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