On Wednesday, a proposed amendment to CS/SB 186 was filed that would place an artificial cap on the number of vendor licenses that a brewery in Florida may obtain.  There is currently no such limit but the amendment would set the limit at 9.  This would mean that any given brewery could open nine total breweries that have taprooms.  Any additional manufacturing location would not be allowed to sell beer on site. Breweries that are already licensed are, in effect, grandfathered in and allowed 9 additional vendor-licensed breweries.

This bill started as a simple and straightforward growler bill.  Late last year, the Florida Beer Wholesalers Association (FBWA) stated that they “believe it is now time to separate the growler from the larger conversation.”  However, soon after, two retail organizations sought to challenge Florida’s “tourism exception” and the FBWA and the Beer Industry of Florida (BIF) sought to intervene and support the challenge almost immediately.

They generally claimed that they simply sought clarification on the manner in which the “tourism exception” is to be applied.  To most, the impact of craft beer on tourism is obvious.  Studies have confirmed the impact.  Government agencies across the country have recognized the impact and have sought to capitalize upon it.  In the spirit of clarification, the Senate’s Regulated Industries Committee worked to remove the tourism exception and simply allow breweries to hold a vendors license and operate a taproom on premise.

In response, the distributors worried aloud that a giant manufacturer (Anheuser Busch) might open small dummy-breweries that have little more than a homebrew system so that they may acquire manufacturing and vendors licenses and then ship beer directly from one giant brewery to dozens of corner stores without ever dealing with a distributor.  That worry was quickly remedied by adding a limitation to SB 186 that would cap transfers to breweries under common ownership at the amount of annual production of the receiving brewery.  In this way, the breweries offered a compromise to calm the stated fears of the distribution lobby.

FBWA lobbyist Mitch Rubin then stated a desire to place a limit to the number of brewery retail locations in order to avoid an “alternative retail model” and keep it as a brewery model.  The actual “brewery model”, as it functions across the country, differs greatly from Mr. Rubin’s model.  While there is no number that is really appropriate as a cap on taprooms (attached to breweries), the parties “settled” on nine.

It does make one wonder why this is necessary. Why not limit the amount of counties in which a distributor can do business? Why not limit the number of brands that a distributor can sell? The answer is obvious – it’s unnecessary and artificially impacts the manner in which businesses can operate and grow.  The same is the case here.

While additional limitations on the craft beer industry are absolutely unnecessary, this one should ultimately not have any real impact or harm.  In that sense, while self-distribution would have been a nice next step or compromise, this is not unreasonable (again, it is unnecessary).  Given that it can be put forward as a compromise between the relevant parties, it is unlikely to encounter many issues moving forward. Still, it will be interesting to see if the distributors say they would have preferred a lower number but will settle upon 9 or if they argue that a lower number is necessary.

So, consumers would get to fill their 64 ounce growlers, distributors and retailers would be able to stop wondering what the tourism exception really means (plus taprooms will be protected from further nonsense) and distributors and retailers can avoid also worrying about ABInBev opening small breweries on every corner.  There is little here for the brewers.  Additional restrictions on Florida’s craft beer industry unnecessarily and unreasonably threaten its growth, but these restrictions are unlikely to have much impact at any point.  It is not the most welcoming atmosphere for growth when many in Florida’s legislature accept illogical “fears” and unsupported rhetoric as fact and are willing to compromise by adding restrictions where they are unwarranted.  But, while the growth of breweries and their taprooms will be artificially capped in terms of quantity of licenses, it will not be slowed as it relates to production and quality. This is not perfect, but the industry will continue moving forward.

 

The proposed amendment is linked here