It’s natural to want to expand a successful brewery and taproom to new parts of the state. Before launching that second Florida location for your brewery or taproom, Florida brewery owners should pay attention to the following three considerations.
Continue ReadingAlcoholic beverage retailers–including bars, restaurants, breweries, wineries, and distilleries–are often asked to provide off-site alcohol service–catering–for a range of events. In Florida, there are a limited number of ways in which an alcohol retailer can participate in providing alcohol service away from its licensed premises. Option 1: Sales to Private Party for Open Bar Alcohol retailers that have a license that permits sales for consumption off premises can supply a private party to host an open bar event. For instance a wine or beer bottle shop with a 2APS license can provide all the beer or wine to be served by the host at a wedding reception. The same is true for a bar, restaurant, brewery or winery with a 2COP license. Each of these retailers can sell wine or beer in cans, bottles, or kegs, and they can provide keg service equipment. Even a craft distillery gift shop can sell to a private party bottled liquor, now in unlimited quantities under the recently changed craft distillery law. However, this option does not permit two activities: First, the alcohol retailer cannot provide bartending service for the event. Second, the host of the event cannot resell the alcohol at the event–open bar only. Option 2: Sales to an Licensed Alcohol Caterer Alcohol retailers that have an off-premises consumption license can sell alcohol to the holder of a 13CT alcohol catering license. See Florida Statutes Section 561.20(2)(a)5. Generally, one licensed retailer is not permitted to purchase alcohol from another licensed retailer. One of the few exceptions to this rule is a licensed alcohol caterer (requirements for acting as an alcohol caterer are discussed below). Licensed alcohol caterers are permitted to purchase alcohol directly from a retailer that is licensed to sell alcohol to individuals for off-premises consumption. Licensed alcohol caterers are permitted to operate a cash bar at a private event (assuming compliance with other state laws and local ordinances). After the event, the alcohol caterer is required to leave the remaining alcohol with its private customer or return unopened alcohol to the retailer, provided the retailer will accept the return. Under this option, the alcohol retailer again is not permitted to provide bartending service for the event, but the alcohol caterer can provide this service. Option 3: Sales for a Non-Profit Event Similar to Option 2, alcohol retailers that have an off-premises license can sell alcohol to a non-profit organization or municipality for a permitted non-profit event. Non-profit organizations and municipalities are eligible to obtain a One, Two, or Three Day Permit (ODP) from the Florida Division of Alcoholic Beverages and Tobacco (ABT). See Florida Statutes Section 561.422. The ODP permit allows the organizer of a non-profit event to serve or sell beer, wine, or liquor at the event (assuming compliance with other state laws and local ordinances). Like the licensed alcohol caterer, the ODP event organizer is permitted to purchase alcohol directly from an alcohol retailer with an off-premises consumption license. The non-profit event host is permitted to reseller alcohol at the event. Presumably, the alcohol retailer is permitted to provide bartending services to the event host (no provision of the Florida Beverage Law or regulations seems to prohibit this). However, all net profits from sales of alcoholic beverages at the event must be retained by the non-profit organization. Option 4: Alcohol Catering with a 13CT License As discussed above, the holder of a 13CT alcohol catering license is permitted to sell and serve alcohol at a catered event. A licensed alcohol retailer can hold a 13CT alcohol catering license and provide catering services directly in certain circumstances. To obtain a 13CT alcohol catering license, the retailer must first have a public food service (PFS) license issued by the Florida Division of Hotels and Restaurants. That is, the retailer must be licensed as a restaurant, mobile food vehicle, or food caterer. A retailer with a 13CT alcohol catering license may sell alcohol (beer, wine, or liquor) at events for which it also provides the food catering. Moreover, the retailer must derive at least 51% of its gross food and beverage revenue from the sale of food and nonalcoholic beverages at each catered event. A 13CT licensed alcohol caterer cannot sell only alcohol at the event. See also Working with Beverage Caterers. Option 5: Alcohol Catering with a Quota License A retailer with a 4COP or 3PS quota license is also permitted to sell and serve alcohol at a catered event. Importantly, this does not include a restaurant that holds a 4COP-SFS license, which prohibits sales for consumption off-premises (although such a restaurant could hold a separate 13CT license). Unlike a 13CT licensed alcohol caterer, a quota licensed retailer is not required to derive at least 51% of its revenue from the sale of food and nonalcoholic beverages at each event. However, each catered event must have prepared food is provided by a caterer by the Florida Division of Hotels and Restaurants. See also Alcohol Catering with Florida Quota License. Do you have any questions about off-site alcohol service by Florida retailers? Contact us at contact@brewerlong.com to schedule a consultation with a beverage attorney. Because we’re attorneys: Disclaimer.
Continue ReadingWhat happens when a Florida licensed beverage company violates the Florida Beverage Law? In 1994, the ABT issued penalty guidelines concerning single and repeated violations of the Florida Beverage Law. While these penalty guidelines have not been updated to reflect all changes to the law since 1994, it is a helpful guide to the ABT’s disciplinary actions. Unfortunately, the official publication of the penalty guidelines (available on the Florida Department of State website) contains a non-searchable table of violations and penalties. To make life easier for the folks who need to understand these guidelines, we have created a searchable reproduction of the table. Find the searchable Florida Beverage Law Penalty Guidelines under the Resources tab or by clicking this link: Florida Beverage Law Penalty Guidelines. Do you have any questions about the Florida Beverage Law penalty guidelines? Contact us at contact@brewerlong.com to schedule a consultation with a beverage attorney. Because we’re attorneys: Disclaimer.
Continue ReadingWe reviewed the 2021 Florida Craft Distilleries Law in two prior blog posts–2021 Florida Craft Distilleries Law: General Overview and 2021 Florida Craft Distilleries Law: Destination Entertainment Venues–but questions remain. Following are just five questions we have about the new law. Question #1: Can new Florida craft distillery apply directly for the DD(CD) license? It is unclear whether a new craft distillery must first obtain a Florida distillery (DD) license and only then can request designation as a craft distillery (DD(CD)). Concerning licensing of a craft distillery, the 2021 Florida Distilleries Law added the following statutory provision: A distillery may not operate as a craft distillery until the distillery has provided to the [Florida Division of Alcoholic Beverages and Tobacco] written notification that it meets the criteria specified in paragraph (1)(b). Upon the division’s receipt of the notification and its verification that the distillery meets all such criteria, the division shall add the designation of craft distiller on the distillery’s license. Fla. Stat. S. 565.03(2)(a) (2021) The answer to this question is worth $3,000. That is, the annual license fee for a DD license is $4,000, whereas the annual license fee for a DD(CD) license is $1,000. Will the ABT require a new applicant to first pay $4,000 to obtain a DD license before requesting the “craft distillery” designation, or will the ABT allow an applicant to provide the craft distillery written notification at the time of application and pay only $1,000? Question #2: Can Florida breweries with a craft distillery license sell distilled products from their taproom? The 2021 Florida Craft Distilleries Law has already generated strong interest among licensed breweries and wineries wanting to also manufacture and sell distilled products. Nearly all Florida breweries and wineries have an adjoining taproom or tasting room with a vendor license–most often, a 2COP (beer and wine, consumption on premises or carryout) license. Now that Florida craft distilleries are authorized to sell their own distilled products, for consumption on premises, from a “gift shop or tasting room” attached to the distillery, can that be the same space as the brewery taproom or winery tasting room? Where the brewery taproom or winery tasting room has the 2COP license, the answer is probably no–at least until the ABT says otherwise. The premises of a license–the physical space covered by a license–is significant under the Florida Beverage Law. It is unlawful to sell particular alcoholic beverages–whether beer, wine, or distilled spirits– except on the premises covered by the license. See Fla. Stat. S. 562.02. Generally, one licensed premises cannot overlap another licensed premises. The 2021 Florida Craft Distilleries Law authorizes retail sales of distilled spirits as part of the DD(CD) manufacturing license itself, meaning that the distillery’s gift shop/tasting room must be part of the licensed distillery itself. That is, a craft distillery that is attached to a Florida brewery should be permitted to make sales from its owned tasting room that is covered by the craft distillery license, but probably not from a 2COP licensed taproom attached to the brewery. However, the Florida Beverage Law supports at least two exceptions. First, a brewery or winery with a craft distillery, that also has a 4COP (beer, wine, and liquor) licensed taproom or tasting room, should be able to transfer its own distilled products to the 4COP licensed premises for sale under that license. Nothing prohibits a brewery’s taproom having a 4COP quota license or a 4COP-SFS restaurant license. Second, Florida law does allow “special low proof products”, however derived, distilled, mixed, or fermented and which contain less than 6 percent alcohol by volume, to be sold by 2COP licensed vendors. See Fla. Stat. S. 564.06(5)(b). However, the ABT’s existing rule concerning these special low proof products is much more restrictive, limiting the definition of special low proof products to “products sealed by the manufacturer and offered for sale to vendors through licensed distributors in the originally sealed containers.” FAC Rule 61A-3.050. Particularly in light of the 2021 Florida Craft Distilleries Law, this rule may require modification. Question #3: How does a craft distillery obtain a permit to regularly participate in farmers markets? Under the 2021 Florida Craft Distilleries Law, craft distilleries may providing tastings and sales at organized, including farmers markets. The entire statutory provision is here: Craft distilleries may conduct tastings and sales of distilled spirits produced by the craft distilleries at Florida fairs, trade shows, farmers markets, expositions, and festivals. The division shall issue permits to craft distilleries for such tastings and sales. A craft distillery must pay all entry fees and must have a distillery representative present during the event. The permit is limited to the duration and physical location of the event Fla. Stat. 565.17(2) (2021). How will craft distilleries apply for the required permit? Will one permit allow a craft distillery to participate in the same farmers market every week, or will separate permits be required? What will be the cost of each permit? The ABT will have to provide answers to these questions. Question #4: How will Florida craft distilleries comply with the Florida agricultural products requirement? Effective July 1, 2026, Florida craft distilleries will be required to ensure that a minimum of 60 percent of their total finished branded products are distilled in Florida and contain one or more Florida agricultural products. Our sister website and blog, Groves Law, which focuses on the law of Florida agribusiness, already did a deep-dive into what might constitute “Florida agricultural products” for this purpose, but hopefully additional guidance will be provided by the ABT. In addition to what constitutes “Florida agricultural products”, how will the ABT verify that this requirement is met? What records will the distillery be required to keep? Are “total finished branded products” counted by volume or by package? There are a lot of practical questions that must be answered before this requirement becomes effective? Question #5: How many destination entertainment venues (DEVs) will we see? A large part of the 2021 Florida Craft Distilleries Law is focused on […]
Continue ReadingFlorida restaurants that want to sell beer, wine and liquor–whether at a restaurant bar or to seated customers–must have a 4COP-SFS (formerly known as 4COP-SRX) license issued by the Florida Division of Alcoholic Beverages & Tobacco (ABT) pursuant to Florida Statutes Section 561.20(2)(a)4. To get a 4COP-SFS license, a Florida restaurant must meet the following three requirements: Maintain at least 2,500 square feet of service area. Have the capacity to serve meals to at least 150 persons at one time. Derive at least 51% of its gross food and beverage revenues from food and nonalcoholic beverages. Requirement 1: At Least 2,500 SF of Service Area The Service Area Requirement means that only restaurants of a minimum size are permitted to have a 4COP-SFS license. However, “service area” is generally interpreted by the ABT very broadly. The dining room is part of the service area, of course, but the kitchen is also. So are office and storage spaces. So are the restrooms. Outdoor seating is also part of the service area, as long as the restaurant has the legal right to use the space (according to the lease or deed). The only part of a restaurant’s floor plan that is not part of the service area, for purposes of meeting the Service Area Requirement, is any part that (1) is not covered by the restaurant’s Public Food Service (PFS) license issued by the Florida Division of Hotels and Restaurants, or (2) is covered by a different alcoholic beverage license, such as a manufacturing license (for a brewery or winery), bottle club license, or package store license. Requirement 2: Serve Meals to 150 Persons at One Time Only restaurants that are capable of serving meals to at least 150 persons at one time are allowed to get and keep a 4COP-SFS license. The ABT has interpreted this requirement to mean serving at least 150 persons full meals that are consumed one the premises. In other words, it is not enough that a restaurant have a kitchen capable of preparing 150 meals at one time. The restaurant must also have tables, chairs, servers and service capacity that is sufficient to serve those meals to 150 persons present in the restaurant at the same time. In other words, a restaurant’s robust carryout or Uber Eats business is not enough. To determine whether a restaurant meets the 150 Persons Requirement, the ABT generally takes into account three sources of information: The number of seats reflected on the restaurant’s Public Food Service Establishment (PFS) license; The maximum building occupancy allowed by the fire marshal; and The maximum capacity rating provided by the local water treatment and sewer authority. Requirement 3: 51% of Revenue from Food and Nonalcoholic Beverages A restaurant that is granted a 4COP-SFS license must continue to derive at least 51% of its food and beverage gross revenue from the sale of food and nonalcoholic beverages. The ABT confirms that this requirement is met by by reviewing the restaurant’s sales records. When a new 4COP-SFS is issued, the ABT will review the restaurant’s food and beverage sales records after the first 60 or 90 days. If those records show that more than 49% of revenue comes from alcoholic beverage sales, the ABT will generally allow the restaurant another 60 to 90 days to show compliance with the 51% Sales Requirement. After that additional time, if the restaurant’s records still reflect that more than 49% of revenue comes from alcoholic beverage sales, then the 4COP-SFS license will be canceled. In that event, the restaurant must choose among: (1) purchasing a 4COP quota license (for which there is a limited number per county), (2) applying for a 2COP beer and wine only license, or (3) no alcoholic beverage license. On an annual basis, the ABT will review the restaurant’s food and beverage sales records to confirm that it continues to meet the 51% Sales Requirement. 4COP-SFS License Does Not Allow Package Sales An important limitation of the 4COP-SFS license is that it is limited by statute to sales of alcoholic beverages for consumption on sales only. That is, a 4COP-SFS licensed restaurant is statutory prohibited from making package sales of beer, wine, or liquor for consumption off premises. For breweries and wineries, this would prohibit filling growlers or sales of canned or bottled products. There are a couple exceptions to the statutory prohibition against packaged sales. First, partially consumed wine bottles can be resealed and taken home by the customer. Second, the Florida Governor’s temporary (but seemingly permanent) emergency order allows 4COP-SFS licensed restaurants to sell alcohol to go during the COVID-19 pandemic. Do you have questions about retail alcoholic beverage licenses for Florida restaurants? We’d love to discuss it with you. Contact us at contact@brewerlong.com to schedule a consultation. Because we’re attorneys: This blog post is provided on an “as is” and “as available” basis as of the date of publication. We disclaim any duty to update or correct any information contained in this blog post, including errors, even if we are notified about them. To the fullest extent permitted by law, we disclaim all representations or warranties of any kind, express or implied with respect to the information contained in this blog post, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title, non-infringement, accuracy, completeness, and timeliness. We will not be liable for damages of any kind arising from or in connection with your use of or reliance on this blog post, including, but not limited to, direct, indirect, incidental, consequential, and punitive damages. You agree to use this blog post at your own risk. Regarding your particular circumstances, we recommend that you consult your own legal counsel–hopefully BrewerLong.
Continue ReadingIn most cases, a craft brewery in Florida consists of a single structure divided into two parts. One part is the brewery, which has the required federal and state licenses to make beer. The other part is the taproom, which has a state license to sell beer for consumption on premises (and might also be licensed as a restaurant). As required by federal and state law, the brewery and the taproom are physically separate to ensure that patrons cannot have direct access to tax unpaid beer. What happens when the structure that contains the brewery cannot accommodate a separate taproom? Or, what if the the brewing company would like to have a separate taproom that is across the street, or across town? Here are two licensing strategies that allow brewing companies to support taprooms that are not directly contiguous to the brewery. Strategy #1: The Single, Divided Complex The Florida Beverage Law (specifically, Florida Statutes Section 561.221(2)(a)) allows a brewing company to have a taproom that is not directly contiguous to the brewery, provided its is part of a single complex that is divided by not more than one public road or highway. “Single complex” is not defined by the Florida Beverage Law, so the term should have its ordinary, but imprecise, meaning. A single complex generally refers to a collection of separate parts that work together for a common purpose. A building that houses a brewery and a taproom is clearly a single complex. But a single complex could be created when a brewery and taproom, while not within the same building, are close enough in proximity and operations that they operate together. To qualify for licensing, a single, but divided, brewery-taproom complex cannot be divided by more than one public road or highway. This means that a taproom can stand directly across the street from the brewery. But can the taproom stand across the street and several building’s removed from the brewery? It’s unclear, and the determination would be made by the Florida Division of Alcoholic Beverage and Tobacco (ABT). Strategy #2: Remote Manufacturing Space and Taproom For brewery companies that wish to locate a remote taproom that is outside the immediate area of the brewery, the single, divided complex clearly will not suffice. An alternative strategy is for the brewery company to license the remote location as both a manufacturing space and a taproom. A brewery company is permitted to have additional licensed manufacturing spaces, and each of those separate manufacturing spaces can have attached to it its own licensed taproom. Requiring a separate manufacturing license in the remote location does increase the licensing cost, but there are two mitigating factors. First, while the remote location must have a separate manufacturing license, it is not required to actually conduct any manufacturing. In fact, there is no requirement that the remote location have manufacturing equipment in order to maintain the manufacturing license. Second, the remote location could have a separate brewery (CMB) license or it could have a winery (AMW) license. Both are manufacturing license, both allow a taproom to be located contiguously to the licensed manufacturing space, and the annual licensing fee for the AMW license is one-third the amount of the CMB license ($1,000 versus $3,000). Note, however, using AMW licenses for this strategy allows the licenseholder to have only three (3) taprooms, whereas the CMB license allows for up to eight (8). There is a major downside to the remote manufacturing space and taproom strategy: All beer supplied to the location must be through a licensed distributor, unless the remote location produces some amount beer itself. However, if the remote location does produce beer, an equal amount can be supplied by the brewing company’s other locations directly without going through a distributor. Do you have questions about brewery and taproom licensing? Contact us at contact@brewerlong.com to schedule a consultation. Because we’re attorneys: This blog post is provided on an “as is” and “as available” basis as of the date of publication. We disclaim any duty to update or correct any information contained in this blog post, including errors, even if we are notified about them. To the fullest extent permitted by law, we disclaim all representations or warranties of any kind, express or implied with respect to the information contained in this blog post, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title, non-infringement, accuracy, completeness, and timeliness. We will not be liable for damages of any kind arising from or in connection with your use of or reliance on this blog post, including, but not limited to, direct, indirect, incidental, consequential, and punitive damages. You agree to use this blog post at your own risk. Regarding your particular circumstances, we recommend that you consult your own legal counsel–hopefully BrewerLong.
Continue ReadingLate Payment to Distributors Can Land a Vendor on the “No Sale” List Florida alcoholic beverage vendors can end up on the Delinquent Account List–also called the “No Sale” List–if they fail to timely pay a distributor’s invoice. When a vendor purchases alcoholic beverages from a distributor, the vendor’s payment must be delivered no later than the 10th day after the calendar week in which the sale was made, according to Florida’s “Tied House Evil” Statute (Florida Statutes Section 561.42(3)-(5)). When payment is late, the distributor can start the process to include the vendor on the No Sale List. While a vendor is on the No Sale List, the vendor is prohibited from purchasing alcohol and all distributors are prohibited from selling alcohol to the vendor. This prohibition continues for as long as the vendor is on the No Sale List. How a Vendor Gets on the No Sale List Distributors are required to notify the Florida Division of Alcoholic Beverages and Tobacco (ABT) when a vendor fails to pay an invoice by the 10th day after the calendar week in which the sale was made. After receiving notice from the distributor, the ABT is required to provide written notice to the vendor about the distributor’s report. The vendor, within 5 days after receipt of the ABT’s notice, may take one of three steps: Pay the distributor’s invoice and provide proof of payment to the ABT; Provide to the ABT “good cause” for why the vendor should not be included on the No Sale List; or Demand a hearing. If the vendor fails to take one of these three steps, or if the ABT determines that the vendor does not have good cause to avoid payment of the invoice, then the ABT will place the vendor on the No Sale List. How a Vendor Gets Off the No Sale List While a vendor is included on the No Sale List, the vendor is prohibited from purchasing alcoholic beverages and all distributors are prohibited from selling alcoholic beverages to the vendor. To remove the vendor from the No Sale List, one of the following steps is required: The vendor provides the ABT proof that it has paid the distributor’s invoice; The distributor files with the ABT a Delinquent Account Release Form; or The vendor provides good cause to the ABT for why the vendor should be removed from the No Sale List. “Good cause” for preventing the vendor from going on the No Sale List, if provided within 5 days of the ABT’s notice, or getting the vendor removed from the No Sale List, may include payment, failure of consideration provided by the distributor (for example, the distributor failed to deliver the invoiced products) or any other defense which would be considered sufficient in a common law action. Whether or not good cause exists is determined by the Director of the ABT and is reviewable by the Florida Department of Business and Professional Regulations. Do you have questions about Florida’s No Sale List or how to get off it? Contact us at contact@brewerlong.com to schedule a 15-minute introductory call at no charge. Because we’re attorneys: This blog post is provided on an “as is” and “as available” basis as of the date of publication. We disclaim any duty to update or correct any information contained in this blog post, including errors, even if we are notified about them. To the fullest extent permitted by law, we disclaim all representations or warranties of any kind, express or implied with respect to the information contained in this blog post, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title, non-infringement, accuracy, completeness, and timeliness. We will not be liable for damages of any kind arising from or in connection with your use of or reliance on this blog post, including, but not limited to, direct, indirect, incidental, consequential, and punitive damages. You agree to use this blog post at your own risk. Regarding your particular circumstances, we recommend that you consult your own legal counsel–hopefully BrewerLong.
Continue ReadingLike alcoholic beverage manufacturers, distributors, and vendors, importers and exporters are subject to strict regulations and licensing by the federal government and the State of Florida. What Florida Importers & Exporters Can and Cannot Do In the alcoholic sales channel, importers play the role of getting products from overseas through US Customs and into the hands of distributors. Licensed Florida importers are permitted to buy alcoholic beverages from manufacturers and distributors outside Florida and sell those products to licensed Florida manufacturers and distributors. Importers are not permitted to take possession of the alcoholic beverages they buy and sell. Rather, the products that an importer purchases must be shipped directly to a manufacturer or distributor. Florida exporters serve the purpose of getting Florida-manufactured products into the hands of wholesalers and other buyers outside the United States. A Florida brewery, winery, or distillery is allowed to export its own products (rather than working through a separate exporter), but the manufacturer still must comply with Federal and state export licensing and regulatory requirements. Florida importers and exporters cannot make sales directly to vendors or retail customers, with only two exceptions. Exception #1: a Florida importer that is also licensed as a Florida distributor can sell imported products to vendors. Exception #2: a Florida exporter that is also licensed as a Florida manufacturer can sell its products to retail customers in a licensed taproom, tasting room, or gift shop. When it comes to Florida’s Three Tier System, importers and non-manufacturing exporters are generally classified in the “distributor” tier. As such, they are prohibited from having a financial or controlling interest in either a manufacturer or vendor licensed in Florida (discussed in numerous other posts). A question that is often asked: Can a Florida importer purchase beer, wine, or liquor from outside the United States and sell it directly to customers via the internet? The answer is clearly no. Federal and State Licensing Requirements Importers must hold a Basic Importer Permit issued by the federal TTB, and they must hold a Florida Importer or Broker/Sales Agent license. The federal Basic Importer Permit does not require paying a license fee or maintaining a tax bond. A Florida Importer license can be issued to a non-resident person or company, but a Florida Importer must have a Florida office address. The Florida Importer license requires payment of an annual licensing fee (currently, $500 per year) but does not require a tax bond. In addition to holding a Florida Importer or Broker/Sales Agent license, it might be necessary for an importer to apply to the Florida ABT as the “primary American source of supply” (PASS) for an importer product (See Florida Statutes Section 564.045 and Section 565.095). Importers can only purchase wine or liquor products from the PASS, unless the importer is the PASS. The PASS is the manufacturer, bottler, or legally authorized exclusive agent that is the source closest to the manufacturer in the channel of commerce from which an American distributor can obtain the product. A foreign manufacturer or bottler can register as the PASS itself, in which case it will also be the brand registrant. Where the foreign manufacturer or bottler cannot or does not register as the PASS, the importer can apply to the Florida ABT to be designated as the PASS, in which case the importer will be the brand registrant. Florida-based exporters must hold a Basic Wholesaler Permit issued by the federal TTB, and they must register as an Exporter with the Florida ABT. Florida Exporter registration involves essentially the same steps as applying for a Florida beverage license, but there is no registration fee. The federal Basic Wholesaler Permit and Florida Exporter registration are requirements even for a Florida manufacturer that wishes to export its products by selling directly to non-US buyer. Neither the federal Basic Wholesaler Permit nor the Florida Exporter registration requires paying a licensing fee or maintaining a tax bond. Responsibility for Federal and State Regulations and Taxes At the federal level, regulations for importers are mostly concerned with paying excise taxes, confirming the importer products’ country of origin, and complying with federal labeling requirements. Importers are responsible for paying federal excise taxes on imported products, which must be paid before products are allowed to clear US Customs. Wine importers are also required to comply with specific product certifications requirements. Florida regulations that apply to importers focus on enforcing importers’ position in the Three Tier System. Florida importers are required to file monthly operations reports with the Florida ABT, but importers do not generally pay Florida excise taxes. Florida excise taxes on products that are sold to a Florida distributor are paid by the distributor. In comparison, there are relatively few Federal and State of Florida regulations that apply to exported products. Under Federal regulations, exported products must be marked “Export.” Exported products are not subject to Federal or state excise taxes. Federal regulations provide specific requirements for export sales of taxpaid products and tax unpaid products. Exporters must also pay close attention to the laws and regulations of the countries to which they are exporting. The federal TTB provides some guidance about the requirements of several countries. Do you have questions about importing or exporting alcoholic beverages in Florida? Contact us at contact@brewerlong.com to schedule a 15-minute introductory call at no charge. Because we’re attorneys: This blog post is provided on an “as is” and “as available” basis as of the date of publication. We disclaim any duty to update or correct any information contained in this blog post, including errors, even if we are notified about them. To the fullest extent permitted by law, we disclaim all representations or warranties of any kind, express or implied with respect to the information contained in this blog post, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title, non-infringement, accuracy, completeness, and timeliness. We will not be liable for damages of any kind arising from or in connection with your use of or reliance on […]
Continue ReadingThe Separation of Tiers In the aftermath of the Repeal of Prohibition, most states adopted some form of the Three Tier System. Generally, the Three Tier System is intended to regulate the alcoholic beverage industry by separating manufacturers and importers (First Tier), distributors and wholesalers (Second Tier), and retail vendors (Third Tier). Florida has a strong Three Tier System. The Florida Division of Alcoholic Beverage & Tobacco (the ABT), which is the regulatory agency charged with implementing Florida’s alcoholic beverage laws, describes the Three Tier System this way: The manufacturer must sell only to the distributor, and the distributor only to the vendor. The vendor in turn may buy only from the distributor. The manufacturer, who is normally the brand owner, may not deal directly with the vendor. The distributor stands between the vendor and the manufacturer. Florida ABT Florida’s Three Tier System Statutes In Florida, the Three Tier System is created and maintained through statutes that are part of Florida Beverage Laws (Florida Statutes Chapters 561-568). Several statutes work together to outline Florida’s Three Tier System. The most important of these statutes are identified and briefly summarized in the following table. For more analysis on Florida’s Three Tier System, check out our other posts on Three Tier System topic. Do you have questions about Florida’s Three Tier System? Contact us at contact@brewerlong.com to schedule a 15-minute introductory call at no charge. Because we’re attorneys: This blog post is provided on an “as is” and “as available” basis as of the date of publication. We disclaim any duty to update or correct any information contained in this blog post, including errors, even if we are notified about them. To the fullest extent permitted by law, we disclaim all representations or warranties of any kind, express or implied with respect to the information contained in this blog post, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title, non-infringement, accuracy, completeness, and timeliness. We will not be liable for damages of any kind arising from or in connection with your use of or reliance on this blog post, including, but not limited to, direct, indirect, incidental, consequential, and punitive damages. You agree to use this blog post at your own risk. Regarding your particular circumstances, we recommend that you consult your own legal counsel–hopefully BrewerLong.
Continue ReadingThe Florida ABT’s 2012 Declaratory Statement In re BK Whopper Bar, LLC tells us how the ABT thinks about the present separation of alcoholic beverage manufacturers, distributors, and vendors. BK Whopper Bar Asked and the ABT Answered In 2011, BK Whopper Bar, LLC and Burger King Corporation asked the Florida Division of Alcoholic Beverages & Tobacco (ABT) to issue a Declaratory Statement answering this question: Did Florida’s Three Tier System prohibit BK Whopper Bar from holding an alcoholic beverage vendor license? In its Declaratory Statement, the ABT concluded that BK Whopper Bar was prohibited from holding a vendor license because BK Whopper Bar’s business structure violated the Three Tier System. In particular, the ABT’s Declaratory Statement focused on the fact that three individuals were investors and directors in a parent company of BK Whopper Bar and also in Anheuser Busch InBev, one of the largest beer manufacturing conglomerates in the world. While it has limited application outside its particular facts, the ABT’s Declaratory Statement boiled down Florida’s Three Tier System– as provided in Florida Statutes Sections 561.22 and 561.42–to three tests which are helpful in evaluating how the ABT would view other business structures under the Three Tier System. Declaratory Statements – What They Are and What They Are Not In re BK Whopper Bar, LLC is an example of declaratory statements that are issued by all Florida state agencies. Agencies are authorized by Florida’s Administrative Procedures Act to issue declaratory statements when requested by a person or company that is substantially affected by a state agency’s application of a state statute or agency rule. The petition for a declaratory statement must describe a set of facts and asks the agency to state how it would apply a statute or rule to those facts. In Florida, declaratory statements are only binding on the requesting person or company and the agency in the context of the facts provided in the petition. A declaratory statement cannot be enforced on an other parties or in any other circumstances. However, agency’s declaratory statements are valuable to everyone for two reasons. First, they provide a good indication of how an agency interprets and applies a statute or rule. Second, they can be persuasive (but not binding) authority for courts that are required to make a judicial ruling on application of the statutes or rules discussed in the declaratory statement. There are very few reported court opinions that evaluate Florida’s Three Tier System. For this reason, declaratory statements like In re BK Whopper Bar, LLC are one of few sources we have as guidance on this subject. Three Tests for Florida’s Three Tier System In In re BK Whopper Bar, LLC, the Florida ABT was asked whether BK Whopper Bar, LLC, with it’s indirect ties to AB InBev, could hold a vendor license under Florida Statutes Sections 561.22 and 561.42–two of the four statutes that largely define Florida’s Three Tier System (the other two statutes separate manufacturers and distributors). The ABT determined that a vendor license cannot be issued to a corporation or LLC in any of the following situations: Financial Interest Test: An alcoholic beverage manufacturer or distributor, operating within or outside of Florida, has a direct or indirect financial interest in the proposed Florida alcoholic beverage vendor. Florida Statutes Section 561.42(1). Affiliation Test: The proposed Florida alcoholic beverage vendor is directly or indirectly affiliated with an alcoholic beverage manufacturer or distributor, operating within or outside of Florida. Florida Statute Sections 561.22(3). Common Parent Test: The proposed Florida alcoholic beverage vendor is controlled or majority owned by a parent company which also controls or majority owns another company which is directly or indirectly engaged in alcoholic beverage manufacturing or distribution within or outside of Florida. Florida Statute Sections 561.22(3) As described in In re BK Whopper Bar, LLC, the Financial Interest Test and the Common Parent Tests are both objective tests. A direct or indirect financial interest exists or it does not; a common parent exits or it does not. The Affiliation Test, on the other hand, is described as a subjective test. The Declaration Statement does not precisely define “affiliation” but states “the scope of the term is meant to be broad and encompass those relationships in which control of an applicant [company] is derived from some other method than ownership.” The Declaratory Statement quotes one of the few Florida judicial opinions on this subject: [T] wo corporations are “affiliated with” each other only when the same individual, or a group of cooperating individuals having common interests, have the power to control formation and execution for the business policies of both corporations. Such control may be from stock ownership, voting trust, common officers, contracts, or a combination of two or more of these elements, but there must be an actual practical control or a legal power to control. Walter J. John and Southern Wine and Spirits, Inc. v. Meiklejohn, Case No. 68-196 (Fla. 2nd Cir. 1968). BK Whopper Bar, LLC failed the Affiliation Test, according to the Declaratory Statement. The Florida ABT concluded that BK Whopper Bar was affiliated with Anheuser-Busch Inc., an alcoholic beverage manufacturer, because three of the directors of AB InBev, Anheuser-Busch’s parent company, were also investors in the parent company of BK Whopper Bar, LLC (the petition also indicates that these individuals were directors of the BK Whopper Bar’s parent, but the Declaratory Statement does not mention this). The Florida ABT determined that the “common interests” of these individuals in both the Burger King companies and the AB InBev companies created a prohibited affiliation among the companies. For more information on Florida’s Three Tier System and its application to alcoholic beverage licensing, see our three-part series (Part 1, Part 2 and Part 3). Do you have questions about the BK Whopper Bar Declaratory Statement and its affect on Florida alcoholic beverage licensing. Contact us at contact@brewerlong.com to schedule a 15-minute introductory call at no charge. Because we’re attorneys: This blog post is provided on an “as is” and “as available” […]
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