Texas legislative push for direct winery restaurant sales

**Texas Wineries Poised for Direct Sales to Restaurants as Key Bills Advance in Legislature**

**Austin, TX** – Texas winemakers are pushing for a significant shift in how they reach consumers, advocating for new legislation that would allow them to sell directly to restaurants, bypassing the traditional three-tier distribution system. This legislative effort, currently moving through the state capitol, aims to boost the state’s burgeoning wine industry, particularly for smaller vineyards.

Currently, if a Texas winery, such as one nestled in the picturesque Hill Country or the High Plains, wishes to place its product on a restaurant menu in a major city like Houston or Dallas, it must go through a licensed distributor. This established three-tier system—producer to distributor to retailer/restaurant—was primarily put in place after Prohibition to ensure orderly alcohol sales, proper taxation, and regulatory oversight. While it provides a structured framework, it also adds layers of cost and logistical complexity, often making it challenging for smaller wineries to gain market access or maintain profit margins.

The proposed solution comes in the form of two companion bills: House Bill 1475, authored by Rep. Stan Gerdes (R-Caldwell), and Senate Bill 1111, introduced by Sen. Charles Perry (R-Lubbock). The core proposal outlined in both bills would permit Texas wineries to sell up to 1,500 cases of wine per year directly to restaurants across the state. Any sales exceeding this annual limit would continue to utilize the existing distributor model. If passed and signed into law, the new system is slated to take effect on September 1, 2023.

Supporters of the legislation argue that this change would be a transformative boost for the state’s wine industry and local economies. The Texas Wine and Grape Growers Association (TWGGA), representing hundreds of wineries and vineyards statewide, views the bills as a critical step towards empowering local businesses. “This is about allowing our Texas wineries to build direct relationships with local restaurants, increase their profitability, and ultimately, offer a wider selection of unique Texas wines to consumers,” stated a TWGGA spokesperson. Wineries like Bernhardt Winery in Plantersville and Messina Hof Winery, prominent names in the Texas wine scene, stand to benefit from improved profit margins and enhanced market access.

The Texas Restaurant Association (TRA) has also thrown its support behind the measures. For restaurants, direct purchasing means greater flexibility in sourcing local products, ensuring freshness, and offering patrons distinctive Texas-grown options that might not be widely available through traditional distribution channels. This aligns with the growing “farm-to-table” movement, allowing restaurants to directly support other local businesses.

However, the proposed changes are not without opposition. Wholesale and distributor lobbies, including organizations like the Wine & Spirits Wholesalers of Texas, have expressed concerns. Their arguments often center on potential regulatory challenges associated with monitoring numerous direct sales, ensuring consistent tax collection, and maintaining the integrity of a system that has been in place for decades. They also cite the essential logistical, marketing, and compliance services that distributors provide to both wineries and restaurants.

Both bills have been making their way through the legislative process. House Bill 1475 held a hearing before the House Licensing and Administrative Procedures Committee on March 14, 2023, where proponents and opponents presented their cases. Over in the Senate, Senate Bill 1111 was notably scheduled for a floor vote on April 17, 2023, indicating significant progress in the upper chamber.

The Texas wine industry has experienced rapid growth over the past two decades, now boasting over 400 wineries and vineyards that contribute significantly to the state’s tourism and agricultural economy. This legislative push reflects a broader trend seen in other states, where direct-to-consumer or direct-to-restaurant sales models are being explored or implemented to support local craft beverage industries.

As the legislative session continues, all eyes remain on Austin to see if Texas winemakers will soon have a more direct path from their vineyards to restaurant tables across the Lone Star State.