Beer can battles in Texas

Crowler2

What’s the difference between a beer can and a mayonnaise jar? It sounds like the opening to a bad joke, but it’s also the basis for a legal and regulatory battle being waged between the Texas Alcoholic Beverage Commission (TABC) and an Austin-area small business.

Cuvee Coffee is a coffee bar located in a hip area of east Austin. Founded by Michael McKim, Cuvee’s sells beer on tap. Customers who want their beer to-go can have them placed in a growler (a large resealable bottle) or using a crowler (a machine that seals the beer in an aluminum can with a standard pop top). It takes several minutes to produce a can of beer using a crowler and, because the device doesn’t eliminate oxygen from the can, the beer won’t stay fresh for as long as canned beer bought in stores. As such, crowlers are useless as a way to mass-produce canned beer.

Texas law requires businesses that wish to “bottle and can beer and pack it into containers for resale” to hold a manufacturer’s license from TABC. Texas also prohibits the same entity from holding licenses for both the manufacture and retail sale of alcohol. Dating from the years after Prohibition, this mandatory separation is argued to be needed to combat organized crime. In practice the rules often serve to limit competition.

TABC has long considered filling growlers to be allowable without a manufacturing license. In 2015, however, the agency decided that using crowlers constituted the manufacture of alcohol. When informed that he was breaking the law, McKim was told that he could accept a citation, which he could then use to challenge the TABC’s interpretation. Three months later, TABC raided his business, seizing his crowler and bringing an action against him seeking $32,000 in fines and revocation of his license to sell alcohol.

While lots of small businesses might have been cowed by the threats to their livelihood, McKim has responded with defiant humor. Shortly after the TABC raid, Cuvee released a viral video adapting the “he hates these cans” scene from Steve Martin’s film The Jerk. Cuvee also filed suit in state court, which currently is on appeal on procedural grounds.

At the hearing before an administrative judge, matters descended into comedy, as the TABC faced questioning about into just which sorts of containers it was legal to sell beer. If selling beer in bottles was permitted, what about a bucket? Sure, said the TABC staff, buckets were fine. Could you sell beer in mayonnaise jars? Yep. Tennis ball cans? No problem. As the administrative law judge noted in his recommendations, “TABC witnesses agreed that beer could be sold to customers in just about anything except crowlers.”

In November 2016, the administrative law judge on the case issued a proposed decision to the effect that Cuvee had not violated the law. That decision still needs to be finalized, and can be rejected by the TABC’s executive director. As is often the case in regulatory enforcement actions, the process itself is a form of punishment.

State Rep. Ramon Romero Jr., D-Fort Worth, has filed H.B. 908, which would clarify that bars like Cuvee’s are permitted to use crowlers. That would be a blessed relief to Cuvee and other bars that may face similar threats. But in the big picture, the TABC’s actions in this case are sadly too typical of what happens when an agency lets a hidebound adherence to its own interpretation of the law overrule common sense.


Image by Brewdog

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