Florida’s Three Tier System: Statutory Foundations
The 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.
Florida Three-Tier System Statutes
|Florida Statutes Reference
|Describes general licensing classifications.
Manufacturers are licensed to manufacture alcoholic beverages and sell them at wholesale only to licensed distributors, unless otherwise authorized by statute.
Distributors are licensed to sell alcoholic beverages only to licensed retailers.
|The application for a manufacturer, distributor, or retailer license generally must identify all persons who have a direct or indirect interest in the licensed business.
|A licensed vendor may not be issued a manufacturer or distributor license, and a vendor license may not be issued to a licensed manufacturer or distributor.
Provides attribute rules concerning the persons interested in the license applicant. Generally the direct or indirect activities and interests of each person that is a member, partner, officer, director, or majority or controlling shareholder of a license applicant are attributed to the applicant.
|A licensed winery can have up to 3 vendor-licensed premises that are situated on property contiguous to winery premises.
A certified Florida Fresh Winery is allowed to conduct tastings and sell wine at fairs, trade shows, and festivals.
A licensed brewery can have up to 8 vendor-licensed premises that are situated on property consisting of a single complex which includes a brewery.
A licensed retail can have a a licensed brewery to make up to 1.55 million gallons of beer each year, for consumption on the premises only.
|A licensed manufacturer may not be licensed as a distributor or register as an exporter. An exception is made for Certified Florida Farm Wineries.
Provides attribute rules concerning the persons interested in the licensed manufacturer. Generally, the direct and indirect activities and interests of each person that is a member, partner, officer, director, or majority or controlling shareholder of an applicant are attributed to the applicant.
Prohibits the renewal of a distributor's license if the qualifications of such distributor have been impaired.
|Florida's "Tied House Evil Law".
No manufacturer, distributor, or importer, whether licensed in Florida or any other state, is permitted to have a financial interest, directly or indirectly, in a establishment or business of a licensed retailer.
No manufacturer, distributor, or importer is permitted to assist any licensed retailer by any gift of loan of money or property, except certain packaging materials, advertising materials, and trade credit.
|Makes it unlawful for a licensee to allow on its premises any alcoholic beverage that it is not authorized to sell.
|Makes it unlawful for any person to sell alcoholic beverages without a license.
Makes it unlawful for any licensee to sell acloholic beverages except as permitted by its license.
|Florida's "Beer Franchise Law".
Strictly controls the relationship between beer distributors and manufacturers.
Limits the ability of manufacturers to influence the behavior of distributors by contract.
Prohibits manufacturers and their officers, directors, agents, employees or affiliates from having an interest in the license, business, assets or stock of a licensed distributor, except through a limited partnership arrangement that lasts no longer than 8 years.
Prohibits manufacturers from selling directly to vendors in Florida.
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 email@example.com to schedule a consultation with a beverage attorney.
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