Florida Beverage Industry Bills Update – May 4, 2014

Intuition Ale Works Owner Ben Davis, Speaking to Craft Beer Supports about Legislative Session

The 2014 session of the Florida Legislature ended, Friday, May 2. Twelve bills were proposed to change Florida laws governing the beverage industry. None of them got passed by both houses of the Legislature. The only beverage bill that got to a floor vote–Senate Bill 1714, which passed the Senate by a vote of 30-10–was loudly decried by Florida brewery owners and their supporters.

In this final weekly update on the 2014 session, we discuss SB 1714’s dramatic passage by the Senate, and its undramatic dismissal by the House. We’ll also review the current state of Florida beverage law. Finally we’ll try to predict what may happen between now and the start of the Florida Legislature’s 2015 session.

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Senator Stargel Believes She “Knows What’s Best” for Florida Breweries, but the House Isn’t Listening

Leading up to Tuesday’s Senate floor vote on Senate Bill 1714, the bill’s sponsor, Senator Kelli Stargel (R-Lakeland), gave her clearest articulation yet of her views on the laws governing Florida breweries and their relationship with Florida distributors. Senator Stargel spoke at length in support of SB 1714 both at the Second Reading on Monday, April 28, and prior to the final vote on Tuesday, April 29, and she provided an op-ed in Tallahassee.com. From this record, her views appear to include the following:

• In-state beer production must be limited to protect against higher rates of consumption (not true, according to Politifact).
• Florida breweries are currently operating outside the law because they are not providing proof of tourism features (like “roller coasters”). A change in law is needed to protect Florida breweries from lawsuits.
• Manufacturers must be separate from retail operations to avoid “trouble.”
• Senate Bill 1714 would help Florida breweries, not hurt them. It reduces regulation on small breweries.
• Florida breweries don’t believe in alcohol regulation. They want to sell unregulated beer. Because Florida breweries won’t participate in her bill, Senator Stargel must act like a parent. “I believe I know what’s best.”

Ten Senator’s opposed passage of Senate Bill 1714, including Senators Jack Latvala (R-Clearwater), Audrey Gibson (D-Jacksonville), Arthenia Joyner (D-Tampa), and Bean (R-Jacksonville). In debate, those senators who spoke against the bill referred to the huge outpouring of opposition from Florida brewer owners, many of whom claimed that passage of SB 1714 would have dire consequences for their individual breweries and Florida’s nascent brewing industry. In the end, however, most Florida senators followed the lead of the Senate’s leadership in voting for passage of the bill.

In the end, it did not matter. Within hours of Senate Bill 1714’s passage in the Senate, House majority whip, Representative Dana Young (R-Tampa), promised strongly suggested that the bill would not be heard on the House floor. She was good to her word. Rep Young had previously co-sponsored a bill that would have permitted beer tastings and authorized the 64 oz growler. When the Florida House closed the 2014 session late Friday night, Senate Bill 1714 died.

Florida’s Beverage Laws Remain Unchanged

Senator Stargel might believe otherwise, but there are plenty of laws that regulate how Florida breweries, wineries, and distilleries operate. Most of the 2014 beverage bills proposed to change the laws governing breweries. Since none of those bills passed, the laws are unchanged.

In light of big changes proposed by this year’s beverage bills, here is a refresher of what Florida law says currently and will continue to say for at least another year:

Beer Tastings: Licensed retailers are not permitted to host beer tastings, unless they have a license for consumption of beer on premises. Retailers can continue to provide samples of wine and spirits.

Brewery Taprooms: Breweries can obtain a retail license to operate a taproom on the brewery’s premises. Breweries do not have to have roller coasters, but they are required to promote the brewery and Florida tourism, generally by providing brewery tourisms. (Most brewery owners seem perfectly happy to show off their breweries.)

Growlers: Growlers in sizes up to 32 oz or 128 oz and over (but not 64 oz) can be filled by licensed brewery taprooms. The law suggests that any retailer with a consumption-off-premises license can fill growlers, and more and more licensed retailers are doing so. However, the ABT’s districts have historically been split in whether non-taproom retailers can fill growlers.

Cans and Bottles: Licensed brewery taprooms can sell pre-packaged containers of their beer without going through a distributor.

Multiple Brewery Locations: There is no limit on the number of breweries that can be owned by a single owner or group of owners. Beer manufactured at one brewery can be transported to a brewery under common ownership without going through a distributor.

Brewpubs: Brewpubs are not required to be licensed as a restaurant.

What Happens Next is Important

It may not seem that way, but Florida beverage manufacturers and their supporters have much to celebrate. Florida breweries proposed modest bills to authorize the 64 oz growlers and to allow beer tastings at retailers, and then they were blitzed by the Florida Beer Wholesaler Association’s frontal assault to limit their growth. But the Florida breweries, led by the Florida Brewers Guild, fought to a draw. Florida breweries, big and small, defended themselves against a political challenge for which they were little prepared. Florida beer was inducted to the politics of business, and it survived the hazing.

It’s too soon to settle on a prescription for what Florida beverage manufacturers need now. It is a conversation that will be had by industry insiders and supporters alike, Florida beverage in hand. As an early contribution to the conversation, we offer the following:

Florida beverage laws need to be clearer. Senator Stargel was not wrong to suggest that the laws governing beverage manufacturers need to be clarified. As one who reads those laws regularly and helps beverage owners and prospective owners make decisions, we can attest that the laws are unclear and needlessly complicated. Clear laws governing an industry invite capital investment and minimize legal expenses, all of which would help Florida beverage manufacturers to grow.

Florida beverage manufacturers and distributors need to align their interests, or get out of each other’s way. Manufacturers, distributors and retailers are all needed to grow Florida’s beverage industry, and it is natural to think that they have more to gain from working together than from working at odds. If manufacturers and distributors can become aligned in a way that encourages brewing, winemaking, and distilling in Florida, they should do so. Cigar City founder Joey Redner and Pepin Distributing CEO Tom Pepin are already talking about ways to encourage growing breweries within the existing three-tier system.

However, the traditional three-tier system is opposed to such alignment. If Florida hews to a strict version of the three-tier system, then Florida distributors will always be economically agnostic to the source of the products on their trucks–whether California, North Carolina, or Florida. If that is true, then Florida manufacturers must make the case to the Florida Legislature that “Made in Florida” is a more worthy cause than “Distributed in Florida.”

Florida beverage manufacturers need a clear message. Clichéd, but true: it’s not enough to be against something, you have to be for something. That’s not meant as a criticism of the Florida Brewers Guild or the vocal Florida brewery owners–they had to go on defense very quickly. But now that the Florida Beer Wholesaler Association has shown its hand, it’s time to start working on the clear message that will promote Florida beverage manufacturing. A clear message is needed as a flag to rally around, not only for brewery owners, but other Florida beverage manufacturers, retailers, beverage supporters, and casual drinkers.

It appears that this process is already underway. Mike Halter, President of the Florida Brewers Guild, today issued a letter to the Florida Craft Beer Community. At the post-legislative debriefing at Intuition Ale Works yesterday, owner Ben Davis talked about plans for the Guild to form a political action committee that would for the first time allow non-brewery owners to support the legislative efforts of the Guild. A group of craft beer supporters has already organized Florida United for Craft Brewers, a community organization intended to educate and advocate on behalf of Florida breweries. Crafting a winning message–a message that advocates for the growth of Florida’s beverage manufacturers, which Florida legislators can embrace–and rallying support around that message should be the top priorities for beverage insiders and supporters alike.

Just because Florida’s 2014 legislative session has ended, doesn’t mean that we will stop talking about the law and business of Florida’s beverage industry. In fact, we’re planning something new: a special audio podcast to address questions about the current Florida beverage laws and the aftermath of the legislative session, and we’ll discuss what beverage manufacturing owners and prospective owners can do now to make their businesses successful, whichever way the political winds blow. We’ll release the podcast here within the next few weeks.

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