News Blog / Monthly Archives: April 2018

Why Most Texas Alcohol Laws Have Been the Same Since the 1930s

Many lawmakers in Texas have made careers out of taking policies that lean light on regulation and rules. However, there are certainly some exceptions in the alcoholic beverage industry—many of the laws that govern the production, sale and distribution of liquor and beer in the state of Texas were written just after the repeal of Prohibition in the 1930s, and have not been updated since.

While there have been a few updates here and there since the 1930s, many of them are not particularly sensible for today’s society, especially considering the explosion of the craft brewing and distilling industries in the last decade or so.

But the way the state set up alcohol laws after Prohibition made it extremely difficult for brewers to enter and exit contracts with distributors, which has hampered the industry to an extent throughout the state. LaBarba Permit Service sees the effects of this all the time at our licensing agency in Dallas, TX.

Texas’s backward alcohol laws

After the end of Prohibition, Texas implemented a brand new three-pronged system in which sellers, distributors and producers of beer and liquor were not allowed to have any sort of financial stake in each other’s businesses. So, for example, brewers are not allowed to hold a retail permit or act as their own distributors. This can make it extremely difficult for small breweries to grow and compete with larger breweries in the same area.

Consider now the rise in massive popularity of beers having their own tap houses or tasting rooms. Under these laws, it becomes extremely difficult (if not impossible) for breweries to create their own establishments that serve their own beer, because they are required by law to work with third-party distributors and sellers.

An absence of these laws in other states has led to a sort of “golden age” for the craft brewing industry, with more breweries than ever before opening up and setting up tap rooms in their brewing facilities.

This has, of course, drawn the attention of the larger breweries, which have seen their sales plateau or decline as craft breweries become even more popular and eat into the sales of the larger “macro” breweries. These breweries and the lobbyists representing the larger companies often attempt to get states to enforce third-party distribution laws as a means of preventing small breweries from operating their own tap rooms.

Some states outside of Texas have other antiquated regulations in the form of “tied house” laws that similarly limit the abilities of breweries to operate their own tasting facilities.

It’s the consumers who suffer

Ultimately, until states like Texas and others change these outdated regulations, it’s the consumers who are suffering the most. The masses have clearly indicated they want expanded access to local craft beers and liquors, and the laws do those breweries, distillers and customers no favors. As long as these regulations are in place, there will be higher prices and fewer choices available across the industry.

For more information about liquor laws in Texas, contact our licensing agency in Dallas, TX.

Texas Alcoholic Beverage Commission Under New Management

If you’re familiar with the Texas Alcoholic Beverage Commission (TABC), you know it has had problems in the past. Accusations of corruption and regulatory overkill used to be the norm for the TABC. In one notorious case, the TABC fined a company $713 million for seemingly minor violations. A judge threw out the trumped-up charges against the business, finding that the only legitimate violation was a single late payment to a vendor.

The board would also send delegates on expensive trips to rub shoulders with lobbyists, while punishing companies that didn’t play ball. Obtaining an alcohol permit in Dallas, TX or anywhere else in the state became nearly impossible.

Fortunately, this era of bad times with the TABC seems to be nearing its end. The new management is getting rave reviews for making the TABC a fairer and more honest organization. Business owners are excited about the changes to make the TABC more consumer-friendly.

Let’s meet your TABC leaders

After the disaster of past years, the state government cleaned house at the TABC, getting rid of seven people in leadership positions. The governor tapped a former Army captain and businessman, Kevin Lilly, to become the TABC’s presiding officer. Lilly then brought in former Army General Bentley Nettles to clean up the situation. Nettles is hands-on with running TABC operations, and started implementing reforms on day one.

One problem they immediately noticed was the negative relationship between business owners and the TABC. A new change is that instead of businesses immediately racking up huge fines, the TABC now issues warnings. Gaining compliance is the goal, instead of needlessly penalizing those with minor infractions. Nettles has said that his objective is to demonstrate to business owners that the TABC is there to help them, instead of to hurt them.

The current environment for the liquor industry

These changes spell good things for anyone in the liquor business. No longer is it nearly impossible for new players to enter the market. Hopefully the TABC’s new leadership will continue making positive reforms and maintain a more business-friendly stance.

That said, it will never be easy, quick or simple to get a liquor license for your business. The state regulates the industry because of the inherent dangers of selling alcohol. If you’re looking to obtain an alcohol permit in Dallas, TX, you need all the help you can get. An expert with a deep knowledge of the state’s industry and TABC operations is a good person to have in your corner.

LaBarba Permit Service knows the ins and outs of this complicated process because we’ve been helping people get into the liquor business for more than five decades. Our connections on the TABC are strong and we’ll make the sure the process doesn’t drag on longer than it has to. We’ve helped a range of businesses from bars to dance halls to convenience stores land liquor permits with minimal hassle. Contact us today to find out more about what our team can offer your business.

Walmart to Start Stocking Liquor in Texas

Walmart already sells everything from light bulbs to dishwashers to candy bars. Now, they’ll also be selling liquor in the state of Texas. The retail giant won a federal court case recently against the Texas Alcoholic Beverage Commission (TABC) that will allow it to sell liquor in its stores across the state. Walmart had accused the TABC of discrimination against out-of-state businesses in the lawsuit. A judge in the case found parts of the law unconstitutional, such as a provision that prevents publicly traded companies from obtaining liquor licenses from the state.

Walmart’s frustration is understandable—if you’re looking to obtain a Texas liquor license in Dallas, TX or any other part of the state, it’s not going to be easy. There’s a ton of red tape and ancient regulations on the industry, which is why Walmart took the matter to the courts.

What Walmart’s entry means for the state’s liquor business

State law generally prohibits companies from having more than five liquor permits. But a loophole allows for many more than that, and it’s expected that Walmart will take full advantage of the loophole.

This has made liquor store owners nervous about the emergence of Walmart as a leading supplier of alcohol. They’re concerned that Walmart’s notorious practice of driving prices down will push them out of the market. Unlike small liquor stores, Walmart can afford to run at razor-thin profit margins and attract more customers. Some small business owners are saying Walmart will have a monopoly on the liquor sales business.

However, it’s expected that the Texas Package Store Association will appeal the court’s decision. This industry group has said it will fight for locally owned businesses against large corporations. An appeals court will have to weigh in as well. All of this means that you won’t be seeing liquor on the shelves at your closest Walmart any time in the immediate future.

Obtaining a liquor permit via the TABC

Walmart’s case demonstrates the difficulty of being able to legally sell alcohol in the state of Texas. Even after winning a court case, the corporation will still have more hoops to jump through. Though small business owners are rooting against Walmart’s entry into the market, their tale of trying to land a liquor license is all too familiar. For most, it’s a confusing and frustrating process.

If you’re looking to start or expand a business through getting a Texas liquor license in Dallas, TX, you need someone with expertise and knowledge of the field to help guide you. You want to work with someone who understands the bureaucratic machinery and has contacts in the industry and in government. You want someone who can cut through the red tape and handle everything for you.

LaBarba Permit Service has been helping Texas business owners for more than 50 years. We take on this time-consuming and stressful process so you don’t have to. We’ve landed liquor licenses for all kinds of businesses, ranging from bars and restaurants to liquor stores and grocery stores. Contact us today to find out more about the invaluable services we can offer your business.

LaBarba Permit Service: Cutting Red Tape Since 1965℠