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New Study Finds Texas Distilleries Generated Nearly $2 Billion In Economic Output In 2020

A recently released study from the University of Texas at San Antonio highlights the significant economic impact Texas distillers made to their local communities and the state in 2020, despite the pandemic and Prohibition-era laws restricting sales.

“Over the past decade, the number of Texas distilleries has grown dramatically, as has the sector’s economic impact to local economies and surrounding communities,” said Javier Oyakawa, lead investigator in the study from the Center for Community and Business Research at the UTSA Institute for Economic Development.

In a prepared statement regarding the study, Oyakawa noted that the number of Texas distilleries has grown from just eight in 2008 to 190 today. Along with those numbers, he said the distillers play a critical role in the state’s economy by generating sales, creating jobs and providing wages and benefits.

Texas distillers
The sticker pretty much says it all (image copyright The Whiskey Wash)

Key findings from the study, titled “Economic Contributions of Distilled Spirits in Texas 2020,” show Texas distillers contributed:

  • Nearly $2 billion in total economic output (or revenues).
  • Support for nearly 4,900 Texas jobs.
  • As much as $334.9 million in salaries and benefits paid to workers.
  • Approximately $481,450 from on-premise mixed beverage sales taxes paid. The tax paid in 2020 declined by more than $240,000, or 34 percent, due to COVID-19-related closures.
  • Nearly $391,000 from on-premise mixed beverage gross receipts taxes were paid. The tax paid in 2020 declined around $200,000, or 34 percent, due to COVID-19-related closures.

“What we found especially interesting was that the Texas spirits industry continued to generate significant economic support for the state between 2019 and 2020, despite substantial declines in on-premise sales due to the pandemic-related closures of distillery tasting rooms and restaurants,” said Tom Tunstall, senior director for community and business research at the UTSA Institute for Economic Development.

The report was prepared for the Distilled Spirits Council of the United States.

Kristi Brown, senior director of state government relations at the Distilled Spirits Council of the United States, said this study makes clear that continued growth of the Texas distilling industry presents great opportunities for the state.

“The collective economic contributions of these small businesses could be even greater if antiquated laws restricting spirits sales were updated,” she added. “Texas distillers still aren’t allowed to sell spirits bottles to consumers on Sundays, despite being allowed to open their doors, offer tours and provide tastings. This simply doesn’t make sense. The decline in on-premise sales greatly impacted distillers, and it’s time to modernize Texas alcohol laws to help support this growing industry and spirits consumers throughout the state.”

The study also showed the effect Texas distillers have on other local businesses. Aside from the distilleries, some of the top industries supported by the spirits industry are wholesalers of goods such as grains, machinery and equipment, glass container manufacturers and truck transportation.

Total contributions in millions of dollars:

Wholesale – nondurable goods (grain merchants, alcohol beverage merchants, etc.) $108.9
Wholesale – machinery, equipment and suppliers $44.4
Glass container manufacturers $28.3
Truck transportation $28.2

For more information on the study, you can read the full report here.

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