What Is a Brewpub License, and How Does It Let a Single Business Both Make and Sell Beer?

Published Read 4 min read

On this page

A Brewpub License (BP) lets a bar or restaurant brew beer on its own premises and sell that beer to its customers there, for drinking on site or, as far as its retail permit allows, to take home. It is not a standalone brewery license: the holder must also hold a Wine and Malt Beverage Retailer’s Permit (BG), a Mixed Beverage Permit (MB), or a Retail Dealer’s On-Premise License (BE), and the law treats the brewpub as a retailer. Production is capped at 10,000 barrels a year per brewpub.

What the license authorizes

Under Section 74.01 of the Alcoholic Beverage Code, a brewpub located in a wet area may:

  • brew, bottle, can, package, and label malt beverages;
  • sell, or offer free, the beer it produces to consumers on the brewpub premises, for consumption on or off those premises, to the extent its other permits or licenses allow;
  • sell food on its premises; and
  • conduct samplings, including tastings, at a retailer’s premises.

One owner may run several brewpubs under the same general management, paying the fee for each location. A brewpub may also take its beer to an organized tasting, competition, or review and pour it free for attendees there.

Why it sits on a retail permit

Section 74.01(c) requires every brewpub license holder to hold a BG, MB, or BE as well, and Section 74.04 applies the provisions governing that retail permit to the brewpub license too. The retail permit decides what else the business can serve:

Concept Retail permit under the BP What it adds
House beer, plus guest beer and wine Wine and Malt Beverage Retailer's Permit (BG) wine and beer on and off premises
House beer and a full bar Mixed Beverage Permit (MB) spirits and cocktails
House beer and other beer only Retail Dealer's On-Premise License (BE) beer

A brewpub restaurant adds a third layer. A Food and Beverage Certificate (FB) can attach to the BG, MB, or BE underneath, subject to the certificate’s own qualification rules.

The retail classification carries a restriction. Under Section 74.01(d), a brewpub holder may not hold an interest, directly or indirectly, in a brewer’s or distributor’s license or any other license or permit at the manufacturing or wholesaling levels, and is considered a retailer for the Tied House rule in Section 102.01.

The numeric limits

  • Production. No more than 10,000 barrels a year for each licensed brewpub (Section 74.03).
  • Sales to retailers. A brewpub that holds a BG and sells only beer brewed on its own premises may sell its beer to the retailers a general distributor could sell to, with the same authority and requirements as a general class B wholesaler (Section 74.08). Those in-state sales may not exceed 1,000 barrels a year per brewpub location, or 2,500 barrels a year across all brewpubs run by the same license holder.
  • Reporting. A brewpub selling to retailers files a report of those sales with TABC by the 15th day of each month for the previous month (Section 74.11).
  • Sales to distributors. A brewpub may also sell its beer to general or branch distributors, complying with the territorial requirements of Section 102.51 (Section 74.09).

Brewpub or brewery

The brewpub and the Brewer’s License (BW) answer different business plans. The BP suits a restaurant or bar whose beer is sold mostly across its own counter, with modest outside sales. A brewery license suits a production business that sells mainly through distributors. The brewpub’s 10,000-barrel ceiling and its retailer status are the trade-off for being able to run a full bar or kitchen on the same premises.

Before applying

  • Commitment to brew. The application must include a sworn statement that the applicant will be brewing and packaging beer in quantities sufficient to operate a brewpub within six months after the original license issues (Section 74.05).
  • Ownership check. Confirm no owner, officer, or affiliate holds an interest in a brewery, distributor, or other manufacturing or wholesale license or permit.
  • Delivery. Section 74.01(f) states that the license does not let a brewpub on a BG deliver alcoholic beverages directly to consumers for off-premises consumption at a location other than the licensed premises.

This article is general information about Texas alcoholic beverage law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and TABC rules change; confirm current requirements with the Texas Alcoholic Beverage Commission, the relevant city or county, or a licensed Texas attorney before acting.

Related posts:

  1. What Is a Brewer’s License, and What Can a Texas Brewery Sell On-Site Versus Only Through Distribution? A Texas brewery's default route to market is a distributor. The Brewer's License (BW) authorizes brewing and sales to distributors; selling directly to the public at the brewery is a......
  2. What a “Death Penalty” Sanction Is, and How a Single Sale Can Cost a Business Its Permit The "death penalty" is cancellation of the license or permit. The Alcoholic Beverage Code puts cancellation within reach on a first offense for a sale to a minor: under Section......
  3. Which Alcohol Permits Apply to Convenience Stores and Gas Stations Selling Beer and Wine? A convenience store or gas station that sells beer and wine to go needs one of two Texas off-premise retail authorizations. The Wine and Malt Beverage Retailer's Off-Premise Permit (BQ)......
  4. How TABC License Renewal Works, and What Triggers a Renewal Problem A Texas alcohol license or permit expires two years after it is issued and is renewed in TABC's online system, AIMS. TABC accepts renewals from 30 days before the expiration......
  5. What It Costs to Obtain a TABC License, and Where Hidden Delays Add Expense A TABC license costs its state fee plus several items outside it. For the common retail licenses, TABC's two-year fees, effective September 1, 2021, run from $1,100 for a Retail......
  6. What Is the Safe Harbor Defense, and What Documentation Does a Business Need to Invoke It? Safe harbor protects a business's license or permit when an employee sells or serves alcohol to a minor or an intoxicated person. Under Section 106.14 of the Alcoholic Beverage Code,......
  7. How does a business confirm a specific address is wet for its intended permit type before signing a lease? Ask the local clerks, in writing, before signing. TABC states that only the city or county clerk's office can officially declare a location wet or dry. For each permit, the......
  8. What a Distance Variance Is, and When a Business Can Request One A distance variance is permission from a city or county to locate an alcohol business closer to a church, school, or public hospital than that government's own distance rule allows.......
  9. How Ownership of an Already-Licensed Alcohol Business Is Transferred or Changed A TABC license or permit cannot be sold or transferred to a new owner. When a business changes hands, TABC requires the buyer to apply for its own license or......
  10. What is a Late Hours Permit (LH) and how does it extend alcohol service toward 2:00 AM? Serving until 2 a.m. takes an add-on to the main permit: the retailer late hours certificate, which TABC abbreviates LH. With it, a bar, club, or restaurant keeps selling the......
  11. What Is an L-Cert (Certificate of Local Compliance), and Why Does TABC Require It Before Issuing a Permit? The L-Cert, also called the Certificate of Local Compliance, is TABC's Required Certifications form (Form L-CERT): the set of sign-offs that new license and permit applications carry. In it, the......
  12. Which TABC Permit Fits a Restaurant, and How Does the Alcohol-to-Food Sales Ratio Drive That Choice? Texas has no single restaurant permit. A restaurant that pours spirits needs a Mixed Beverage Permit (MB); one that serves only wine and beer can operate on a Wine and......
  13. What Conduct Surety Bonds and Performance Bonds Does TABC Require, and Who Is Exempt? TABC requires three kinds of bonds. A conduct surety bond of $5,000, or $10,000 near a public school, applies to most on-premise retailers and to some off-premise retailers near schools.......
  14. How Does a Comptroller Mixed Beverage Tax Audit Actually Work, Step by Step? A mixed beverage tax audit follows the Texas Comptroller's standard audit process: selection, a notice by mail, a review of the account, an initial conference, a request for records, fieldwork......
  15. How does an FB certificate enable to-go and delivery alcohol sales alongside food? For a restaurant or bar holding a Mixed Beverage Permit (MB), the Food and Beverage Certificate (FB) is the condition that unlocks to-go and delivery alcohol. Section 28.1001 of the......

Leave a comment

Your email address will not be published. Required fields are marked *