Florida likes to collect taxes. They want to ensure they get all of them. That’s not a Florida thing. Every government wants what they perceive to be theirs and every government wants to collect revenues.  Florida ranks in the top 10 in the United States in state excise tax rates on beer.  But a funny thing happened on the way to the bank: The Florida Senate’s Committee on Regulated Industries (chaired by Senator Kelli Stargel) introduced a bill that would remove one of the very requirements that purportedly exists to control and monitor that tax revenue. That requirement is the come-to-rest requirement (proper record keeping and thus proper tax collection is easier to verify with checks and balances).

On Tuesday, Senator Jack Latvala exposed Kelli Stargel’s lack of any true understanding of SB 1714 and, with time short in the committee meeting, he clearly felt that the amendment adding an exception to the come-to-rest requirement deserved attention.  Latvala commented:

“If we’re going to have to pay this protection’ like to ‘Vinny’ in New York, they ought to have to move the goods.”

The bill soared through the Committee on Community Affairs, championed by committee member Stargel, who had trouble explaining the bill and its benefits/repercussions effects in any depth beyond simply reading the title of the bill. Actually, after essentially reading the proposed title of the bill as a means of introducing its content, Latvala called for more of an explanation to provide context to the departures from current law that would be created by SB 1714 (see the title of the bill below to see how unhelpful it really is). It didn’t get much better, and questions that required anything more than a canned one sentence response brought stammers and a clear lack of understanding.

At one point, Stargel flat out stated that either you are a brewer, a distributor or a vendor (this is a rallying cry you generally hear from the distribution lobby). While that doesn’t allow for any nuance in an industry full of exceptions to the general rule, we discussed previously that states that don’t allow overlap between those three tiers would be the major exception, rather than the norm. Most states, for example, allow breweries to bypass the distribution tier and self-distribute limited quantities of beer. While some claim that the whole system will collapse if any such thing were ever to occur, the rest of this country demonstrates quite clearly that is a false assertion. Quite simply, IT’S ALREADY HAPPENING (except for the collapsing part). When the battle cry is as simple as saying that “the whole system will collapse” and there is never anything more added to the conversation (or a total unwillingness to have the conversation), there is obviously a reason. I had the pleasure of having that “conversation” last week. Latvala had it yesterday. At times when he asked Stargel to better explain the purpose of certain portions of SB 1714, she clearly strayed from actually responding and just repeated the party line (the party here being Big Beer). As I asked previously, is the three tier system really working when distributors are so heavily influenced by big beer manufacturers?

Anyway, those backing SB 1714 (and others that may still be willing to take them at their word), claim that adding the exception to the come-to-rest requirement is good for breweries. It’s an argument that can be fairly made, so long as you have already accepted that it’s also really bad for breweries. I suppose that part is implied. It’s certainly better that the beer is sold fresh rather than being picked up, driven around, dropped at a warehouse and then returned to the brewery. It’s obviously far worse that breweries would be required to sell their product to a distributor only to buy it back at a higher price.

LeanBackYou already know that SB 1714 would require breweries that want to sell any of their own beer for off-premises consumption, unless in growlers, to first sell the beer to a distributor and then buy it back at a higher price (the last part is just how the market works). Imagine a business person sitting at his/her desk, feet up, leaning back in a comfortable chair with the speakerphone on (I’ll get right back to that). The exception to the come-to-rest requirement would allow the distributor to purchase the beer and then accept payment and sell the beer back to the same brewer without ever taking their feet off their desk. The hypothetical business person would be able to have conversations (ridiculous negotiations) with brewers in which he/she orders 30 gallons of beer at price X and immediately offers that beer back at X * 1.4. Take it or leave it. Otherwise, we’ll come pick it up and take it away. Actually, otherwise, we might just not buy it at all and you’re stuck due to the franchise laws.

It just adds to the power (your distributor has the ability to see to it that your brand doesn’t last) already given to the distributors and just adds another cost of doing business for the brewers. If you’ve signed with a distributor and that distributor wants your beer (even if the distributor isn’t properly marketing it), you are obligated by law to make that happen. It could also be a money saver for the distributor – gas is pretty expensive these days.  Ultimately, those who back this bill seem to be looking for the right way to say “here’s a positive spin on you being (potentially) screwed.”

 

 

 

The title of the proposed bill:

An act relating to malt beverages; amending s. 561.01, F.S.; defining the term “growler”; amending s. 561.221, F.S.; clarifying three-tier system exceptions and application with respect to the manufacture, distribution, and sale of malt beverages; revising requirements for licensure and operation of manufacturers and vendors; providing legislative intent; amending s. 561.37, F.S., to revise bond requirements for brewers; amending s. 561.5101, F.S.; adding an exception to the come-to-rest requirement; amending s. 562.34, F.S.; authorizing the possession and transportation of a growler; reenacting s. 563.022(14), F.S., relating to prohibited interests between a manufacturer and a distributor of malt beverages, to incorporate the amendments made to s. 561.221, F.S., in a reference thereto; clarifying provisions; amending s. 563.06, F.S.; revising provisions relating to the sale of malt beverages at retail in containers of specified sizes, to conform to changes made by the act; creating s. 563.061, F.S.; providing requirements for and limitations on the filling, refilling, and sale or distribution of growlers; providing severability; providing an effective date.