Poured Out

With archaic and self-serving laws, reforms don't come easy for the Texas booze industry

Vintners complain that another law -- the ban on any night or weekend deliveries to wineries -- can ruin truckloads of grapes forced to sit outside over the weekend because they arrived after 5 p.m. on Friday.

But the main concern is overturning the cumbersome laws that virtually restrict wineries from shipping their products to customers (for now, they must go through a liquor store).

Consider the trade deficit that creates: In fiscal 2003, there were 197,000 wine "partials" (typically three or four bottles from wine clubs) shipped into the state. During that same period, Texas wineries shipped a total of 139 bottles.

Spec's John Rydman doesn't want to see big 
corporations in the Texas package store business.
Daniel Kramer
Spec's John Rydman doesn't want to see big corporations in the Texas package store business.

The Sunset Commission set the stage for revamping the TABC with its report, which peppered the agency with harsh words: "overregulated," "outdated," "inefficient," "poorly guided," "inconsistent." That review criticized everything from the way the agency conducts inspections and levies fines to marketing enforcement practices it described as out of touch.

"I would amend the entire Alcoholic Beverage Code and rewrite it in its entirety, so it's clear, understandable and simple," former TABC director Shivers testified at a hearing late last year. "It has been patched on since 1935. It was great for then, but it has outlived its usefulness."

Nobody at the hearing, including legislators and representatives from every facet of the liquor industry, argued with Shivers. Carolyne Beck, spokesperson for the TABC, says the agency itself agreed with the Sunset recommendations.

No major shakeups are emerging in the session, though. Proposed laws advocate such measures as keg registration, server training and forfeiture of driver's licenses for adults who buy alcohol for minors.

Beck says improvements are expected. The TABC is likely to be freed from analyzing new products -- a role duplicated by federal agencies; liquor permits will go from annual to two-year renewals; and the law on beer container sizes may be overturned. A bill to allow winery shipments direct to consumers also is likely to pass.

The agency anticipates funding for hiring about 100 civilian inspectors, to free more agents to conduct sting operations on underage drinking. "That's probably the biggest change that consumers will notice," Beck says.

However, the three-tier system remains intact. An interim committee will be set up to study that issue and the marketing rules that have long befuddled retailers. The legislature does appear to be set to authorize the TABC's existence for just six more years, rather than the customary 12.

As for the onerous provisions, the TABC itself notes that it is saddled with enforcing laws created by legislators. "They may ask us for input, but we don't have a lot of influence over those decisions," notes Beck.

Shivers predicted the business-as-usual outcome that is shaping up. "I expect it's going to look a lot like it does now," he said as the legislative session began. "The beverage industry likes it the way it is."

Wolf stated outright that the industry uses the legislature to control the TABC. "They're one of the biggest political contributors in the state, and elected officials don't like to go off on Don Quixote chases."

The entry of big retail corporations is likely to chip away at the current laws and the lobbyists behind them, Wolf says. Also, liquor retailers are "terrified that hard liquor will get onto supermarket shelves and prices will drop."

But for now, wholesalers -- especially beer wholesalers -- remain dominant.

"Beer distributors make large political contributions, a lot of charitable contributions, and they've got friends that vote," says Shivers. "They're not bad people, they're just protecting their interests. It's the American way."

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