1. Texas Forces Craft Breweries to Give Up Millions in Valuable Property
Microbreweries are flourishing in Texas. But now the state is demanding these entrepreneurs hand over millions of dollars in property rights to politically connected beer distributors—and they can’t receive a single cent.
Distributors used to compensate brewers for the right to sell their beer in markets like Houston or Austin. But thanks to a sales restriction passed in 2013, brewers can no longer “accept payment in exchange for an agreement setting forth territorial rights.” So under the new law, brewers are forced to give up their distribution rights to distributors for free. Even worse, distributors can then sell those rights to other distributors and pocket the money.
In other words, Texas made it illegal for craft brewers to profit from their own beer. As long as this law stands, microbreweries will find it incredibly difficult to expand their business to other parts of the state.
The law was passed over the objections of Texas brewers. Only one group supported it: distributors, who clearly stood to gain from its passage. The law’s impact was immediately understood by both brewers and distributors. Dallas-based brewer Michael Peticolas had been negotiating with distributors for territorial rights at the time the law was passed. After it passed, those negotiations abruptly ended.
To fight back, three craft breweries, Live Oak, Revolver and Peticolas, joined forces with the Institute for Justice and just sued the Texas Alcoholic Beverage Commission.
Don’t mess with Texas beer.
2. You Can’t Buy Cold Beer at Convenience Stores in Indiana
Under Indiana state law, pharmacies, convenience stores and grocery stores can only sell beer if it’s warm. Selling cold beer can lead to hundreds of dollars in fines.
But there is a major loophole: The law doesn’t apply to the 300 or so liquor stores in the state. So they can sell cold beer and typically charge about $1 extra just for chilling those suds.
An association of convenience stores is currently suing the Hoosier State in federal court, arguing that the ban is “irrational,” “hurts consumers” and creates a “virtual monopoly” for liquor stores.
3. Buzzkill: States Ban or Restrict Happy Hour
Home to both “Cheers” and the drunkest city in America, Massachusetts has also spawned one of the weirdest drinking laws in the county: a complete ban on happy hours. Since 1984, this modern-day Prohibition has spread to other states, including Illinois, North Carolina and Vermont.
The law is even crazier in Virginia. Happy hours are legal in Old Dominion, and after a decades-long ban, restaurants finally can use the phrase “happy hour” in their print and online ads. Until January 29, 2014, “Virginia restaurants could only advertise happy hour inside the establishment or on a 17-by-22-inch sign attached to the outside of the business.”
But the state still won’t let restaurants use the word “discounted” or advertise which drinks are cheaper and by how much. So the Virginia Department of Alcohol Beverage Control would censor an ad as vague as “Beer and wine specials from 5–9 p.m. daily.” Not only that, all happy hours have to end by 9 p.m.
4. It’s Illegal to Buy Some Growlers in Three States
Growlers are reusable glass jugs that keep draft beer fresh for days. They also have lower packaging costs when compared to bottles and cans, a huge boon for up-and-coming small businesses. They play a vital role in the microbrewing business.
But not in Florida.
The Sunshine State doesn’t allow 64-ounce growlers, the industry standard size. Supporters of the ban say it cuts down on overdrinking. That’s hard to stomach since it’s completely legal to buy either two 32-ounce growlers or even gallon growlers (128 ounces).
According to the co-owner of one growler bar in Florida, “Because this law is so irrational, a lot of people from other states simply don’t believe me. They think I’m inventing excuses to gouge them by pushing them to buy a new jug in a different size.”
The law is so bizarre, only two other states—Mississippi and Idaho—have similar bans in place.
5. In Kentucky, Pharmacies Can Sell Wine and Liquor, But Not Grocery Stores
Thanks to a law passed way back in 1938, it’s against the law for grocery stores and gas stations to sell liquor or wine if they earn 10 percent or more of their sales from selling gas or groceries. But that law doesn’t apply to pharmacies, even if they sell groceries. As one federal judge put it, the law “does not explain why a grocery-selling drugstore like Walgreens may sell wine and liquor, but a pharmaceutical-selling grocery store like Kroger cannot.”
Not only is the law a major hassle, it’s very unpopular too: More than 60 percent of Kentuckians support abolishing the ban. One mom-and-pop grocer even sued the state, but the 6th U.S. Circuit Court of Appeals upheld the law earlier this year.
6. It’s Illegal to Distill Spirits at Home
Brewing beer at home is legal. So is fermenting wine.
But budding craft distillers are out of luck. As one government spokesman put it, “If you distill without permits, you’re looking at roughly a dozen felonies.” Under federal law, anyone who distills homemade whiskey or vodka can be punished with up to five years in prison, $10,000 in fines or both. It’s even illegal in states like Colorado, which legalized growing marijuana for personal use.
7. Utah Forces Restaurants to Hide Preparing Drinks
Tear down this wall!
In Utah, new restaurants that serve liquor can’t prepare alcoholic drinks in public view. Instead, they have to mix cocktails or open beer bottles behind a wall of frosted glass, nicknamed the “Zion curtain.” According to one poll, more than 60 percent of Utahns want to rip the Zion curtain apart.
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