Texas Craft Brewers Navigate Confusing Coronavirus Mandates

Among the many industries attempting to navigate their way through the rules and regulations brought on by Gov. Greg Abbott and state agencies in response to the Chinese coronavirus is Texas’ craft breweries.

Like many other businesses, craft breweries were forced to shut down their taprooms to in-person patronage in March, after Abbott signed an executive order restricting restaurants and retail to “to-go” service only.

Though the move threatened the future of the industry, many brewers were able to continue operating with assistance from federal paycheck protection loans and funding from the CARES Act.

A light at the end of the tunnel appeared ahead of Memorial Day weekend, when Abbott announced the state would be moving into the second phase of his reopening plan, allowing bars—including brewery taprooms—to reopen on May 22, albeit at a significantly reduced 25 percent capacity.

Things looked even brighter a couple of weeks later, when Abbott again loosened his grip and allowed bars and similar establishments whose sales are comprised of 51 percent or more of alcohol to increase their capacity to 50 percent, and restaurants to increase to 75 percent capacity.

Then brewers’ and bars’ fortunes reversed.

Over the course of a couple of weekends in June, the Texas Alcoholic Beverage Commission—the state agency that oversees and grants liquor licenses to establishments as well as breweries—announced they would be embarking with heightened enforcement over the weekend, in a project entitled “Operation Safe Open.”

The TABC shut down bars across the state for violating provisions of the guidelines laid out by Abbott’s Strike Force to Reopen Texas, including overcapacity and lack of social distancing of at least 6 feet between groups of customers.

Then, on June 26, the progress came to a halt. In a press release issued without warning, Abbott announced that bars could no longer operate, while restaurants could continue to operate at 50 percent capacity.

The sudden announcement put Texas craft brewers in an untenable position, as they were forced to once again close their taprooms just weeks after reopening them.

The Texas Craft Brewers Guild, an organization that represents small breweries across the state, decried the decision:

“Despite adopting all of the health and safety policies laid out in the Governor’s own Open Texas plan, including reduced capacity limits, spacing tables six feet apart, staff wellness checks, and aggressive cleaning and disinfecting regimens (with many breweries going even further to expand outdoor beer garden seating, switch to reservation-only models, make menus accessible via QR code, provide online ordering, and reinforcing mask guidelines) our small businesses are being lumped in with a few rowdy, reckless bars already suspended by TABC, and forced to close socially distanced taprooms and beer gardens while restaurants and other retail businesses across the state can continue to operate.”

Indeed, many of the taprooms in question bear little resemblance to bars and are often more spaced out than the restaurants that were allowed to stay open. In many cases, such as Live Oak Brewing Company in Austin, a brewery’s beer garden can span across many acres of land, leaving out any question about customers’ ability to “social distance.”

Despite their outcry and thousands of petition signers, Abbott has not issued any additional executive orders or guidance on when breweries, bars, and other “51 percent” establishments may resume normal operations.

Instead, the aforementioned Texas Alcoholic Beverage Commission has used its rule-making authority to confuse and muddy the rules that breweries must follow in order to operate.

In July, the TABC rolled out new guidelines that would allow breweries to allow customers who purchase beer “to-go” to consume their libations on a brewery’s outdoor patio or beer garden.

But just days later, the agency reversed course, forcing breweries to close their patios nearly as soon as they had reopened, causing the Texas Craft Brewers Guild to refer to the change as “just the latest lack of leadership” and highlight a survey of their members that showed two out of every three craft breweries in Texas believe they will not make it to the end of the year under current conditions.

The latest concession from TABC is a new directive that allows certain breweries to escape the 51 percent alcohol restriction by calculating their sales since April and removing distribution sales from the equation. In practical terms, this means that some breweries with kitchens or permanent food trucks are allowed to reopen as restaurants—so long as the sales of food and merchandise exceed sales of alcoholic beverages.

Austin Beerworks, a small brewer in Austin, decided to get creative with the restrictions, requiring customers to purchase a $2 order of chips with every beer, while also discounting $2 off the price of the beverage.

While the new regulations have opened a small window of opportunity for a select amount of small breweries, many do not have the luxury of having an on-site kitchen or ownership of a food truck.

With no end in sight to the closure of bars and taprooms, it remains to be seen how much longer the industry will be able to weather Abbott’s storm of mandates and restrictions.