Statewide NewsBreweries Prohibited from Operating Patio Services, Says TABC in New Guidance

After confusion over recent orders, the Texas Alcoholic Beverage Commission clarified that breweries and other alcohol "manufacturers" may not open for patio consumption.
July 24, 2020
Texas’ alcohol industry has experienced a roller coaster of a ride since the pandemic upended society. Riddled with mounting regulations, evaporating profits, and mandatory closure orders, coronavirus and the corresponding government responses have changed what was a thriving Texas industry into one of uncertainty.

One such industry belongs to Texas’ breweries — with hundreds across the state — who were hit with an unforeseen restriction this week.

The Texas Alcoholic Beverage Commission (TABC) issued clarifying guidance this week prohibiting craft breweries from utilizing a Temporary Modification of Licensed Premises (TMLP).

A TMLP is bureaucratic jargon for extra space that an establishment can use to host customers, ensuring more distance between them. It’s used most often for catering events.

But breweries and other manufacturers (i.e. distilleries and wineries) have adopted this as a stopgap measure. An example is a parking lot wherein customers are temporarily permitted to, in the case of craft breweries, drink beer after purchasing a “to-go” product — like a tailgate.

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But another is a patio.

The TABC’s latest guidance states that despite possession of a TMLP, a given establishment will still be required to close in accordance with the 51-percent executive order. Under Governor Abbott’s latest order, all businesses that make 51 percent or more of their revenues from alcohol sales must close.

Those who violate the order can have their licenses suspended by TABC.

Depending on how long the closure lasts, it could be detrimental to an already struggling industry. The Texas Craft Breweries Guild (TCGB) issued a press release detailing the damage that will be felt by their member businesses.

According to their survey, one-third of Texas’ breweries will go under if the closure lasts three months. That number is doubled after six months.

Some have been able to obtain Paycheck Protection Program relief, but that, at the beginning, came with strict stipulations — such as a requirement that 75 percent of the funds go to employment costs.

That limit was lowered, and other provisions were adjusted, in Rep. Chip Roy’s (R-TX-21) Paycheck Protection Flexibility Act which was approved in late-May and early-June. But those loans still cannot adequately replace business revenues.

On aggregate, the breweries are facing a 55 percent decrease in yearly revenues, with some experiencing an 80 percent decrease.

Josh Hare, board chair of the TCBG and owner of Hops & Grain Brewing in Austin, told The Texan, “We’ve been given terrible guidance on what we can do. And then when we are given guidance and invest money, operating in an incredibly safe manner, we’re shut down from having some kind of lifeline.”

About Hops & Grain specifically, Hare said, “Our sales dropped 75 percent pretty much overnight which then picked back up some with the to-go service.”

Once they were allowed to reopen at limited capacity in May, he said he and many other brewers shifted focus to their patios, makeshift or permanent. Hare said he put about $10,000 into his patio to ensure its safety and ability to maintain social distancing standards.

But when the 51-percent rule was issued, his brewery and others were closed again.

About a week ago, Hare said the TABC set out guidance pointing out the TMLP application process to restaurants, breweries, distilleries, and wineries, indicating this could be used for them.

Last Friday night, Hare said his business was visited by TABC agents who informed him that he could not utilize the TMLP and must close.

An official with the TABC told The Texan the new guidance did not reverse an earlier decision by the agency, rather 51-percent businesses “may not allow customers on the premises for dine-in service.”

The new order was issued to clarify any potential vagueness in the previous one.

TABC’s recent guidance reads, “While altering the boundaries of a designated premises modifies where alcohol may lawfully be sold and served at an establishment, it will not change how the establishment is classified under Executive Order GA-28.”

Hare mentioned TABC email language from various announcements on the rule status which read, “By working with TABC, manufacturing and retail businesses can expand or reduce the area where they are licensed to sell alcohol or conduct other licensed activities. Why is this important? Especially during the coronavirus pandemic, this could help a business like a restaurant expand outdoor dining or another business owner remove an area from service.”

According to Hare, this language came “in addition to what many of our members were told by TABC when they submitted their forms.”

He further added that the guild’s attempts to reach the governor’s office “went from a few comments here and there — ‘thank you for your recommendations’ — to radio silence.”

“This is not a TABC-specific problem. It goes all the way up to the top and the governor could fix this in an instant but is choosing not to,” Hare concluded.


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Brad Johnson

Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.

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