Brewery Restaurant Announces 75 Layoffs Due to Governor’s New Interpretation of 51% Law — Updated

Saint Arnold Brewing Company at 2000 Lyons announced on Monday, July 13 that its onsite eatery, the Saint Arnold Beer Garden and Restaurant, was forced to close due to Governor Greg Abbott’s reinterpretation of the criteria that determines whether or not a business is considered a restaurant or a bar based on its alcohol sales. This means his most recent order for bars to close for a second time on June 26 has a deeper, more concerning impact — especially for certain breweries. Saint Arnold owner Brock Wagner says that this unexpected development is going to force him to lay off 75 employees.

The state of Texas defines a bar as a business that makes 51% or more of its revenue through alcohol sales. Wagner says the restaurant makes most of its money on food, not alcohol. However, on Friday, Wagner says he received a call from the TABC [Texas Alcoholic Beverage Commission] informing him that the Governor’s office is now requiring beer sold to distributors by the brewery operation to count towards the restaurant’s alcohol sales. By that criteria, that means the restaurant is now considered a “bar” and thereby required to close for sit-down service.

“Basically the Governor’s office told the TABC that the distributed beer needed to be included,” said Wagner. “This was a new interpretation. The TABC called me Friday and informed me of this. They sent over an affidavit for me to fill out that didn’t allow any way to separate our restaurant business from our other brewery business.”

Saint Arnold is far from the only brewery with a restaurant onsite, so the potential ramifications are farther reaching than just one business. Other breweries in Houston with restaurants that also produce and distribute beer include Buffalo Bayou Brewing Co. and Karbach Brewing Co.

TX Hot Fried Chicken at Saint Arnold Brewing Company
TX Hot Fried Chicken at Saint Arnold Brewing Company Beer Garden and Restaurant. Courtesy photo.

(Unlike the first shutdown in mid-March, bars are now allowed to sell to-go orders, including mixed drinks, and breweries were approved to sell small amounts of the beer produced onsite thanks to the “beer to go” law that went into effect on September 1, 2019.)

Once restaurants in Texas were allowed to resume operations on May 1, the Saint Arnold Beer Garden and Restaurant only allowed outdoor seating as part of its safety protocols; a measure that exceeded what is required by the state of Texas.

“We decided to invest in making a family friendly restaurant that would be a destination Houstonians would be proud of,” said Wagner via a press release. “When restaurants were allowed to reopen, we took an extra two weeks, decided to restrict ourselves to only outdoor seating, increased spacing, and instituted strict safety protocols to make one of the safest environments in the city. Counting the beer we sell to distributors as if it were being sold in the restaurant defies common sense. We are calling on the governor to make this easy fix so we can retain the 75 coworkers whose positions will otherwise be eliminated.”

Unless the Governor’s office issues a new clarification to the TABC, as of now, Saint Arnold’s restaurant operation is running with just the skeleton crew needed to fulfill to-go orders.

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