Texas Brewers Lose Fight to Sell Distribution Rights
The Texas Supreme Court has made a ruling not to hear a challenge to a 2013 state law that prohibits brewers to sell their distribution rights to wholesalers, giving brewers in the state a major setback.
The 2013 law makes it illegal for craft brewers to get paid when they assign exclusive distribution rights for their brand. The law, pushed by Texas beer distributors, forced craft brewers to assign distribution rights for free when entering into a distribution contract. At the same time, the law leaves distributors free to sell the rights to brand they obtained from brewers at no cost.
The challenge was brought by three craft breweries Peticolas Brewing Co., Revolver Brewing and Live Oak Brewing Co. They had successfully challenged the law in 2016 until the Texas Alcoholic Beverage Commission appealed the ruling, which was then overturned in late 2017. The three breweries, along with the law firm Institute for Justice sought a decision from the state’s Supreme Court, which declined to hear it on Friday.
In a statement, the Institute for Justice said the refusal by the state’s top court to hear the case was “a blow to the economic liberty of all Texans.” The Institute for Justice statement can be seen here.
