September 3, 2015

Beer Law

Craft beer brewers go head to head with beer distributors

| 1/2/2014

As craft breweries have gained a foothold in Florida, they’re pushing for legal changes that irk big, established beer distributors.

In 2011, there were 42 small, “craft” breweries in Florida. Last year, there were at least 76.

While Tampa Bay — home to longtime brewery Dunedin Brewery and Cigar City Brewing — is regarded as the hub of craft beer in Florida, independent local breweries have popped up from Pensacola Bay Brewery to Mile Marker Brewing in St. Augustine and the Gravity Brew Lab in the Wynwood section of Miami. Some small breweries, like Intuition Ale Works and Bold City Brewing in Jacksonville, have become catalysts for revitalizing neighborhoods by attracting restaurants and other businesses.

“It has helped spruce up the area and bring new growth,” notes Josh Aubuchon, an attorney with Holland & Knight and executive director of the Florida Brewers Guild, an association of micro-brewers.

While the craft brewers still collectively account for only about 5% of annual beer sales in Florida, the industry has grown enough to begin asserting its legal interests in Tallahassee — and to generate friction with the Florida Beer Wholesalers Association, a politically powerful trade group that represents 25 beer distributors. Twenty-two of those distributors handle Anheuser-Busch brands and about 20 other brewers.

The distributors, say the craft brewers, are worried about protecting regional monopolies and profits created by the laws that ended Prohibition. Those measures prohibit manufacturers from selling alcohol directly to consumers or retailers. Instead, brewers must first sell to state-licensed distributors who in turn sell the beer to retailers like bars and grocery stores.

The small brewers say many of the laws hamper their ability to compete and have engaged the distributors on a range of issues involving how and where they can sell their products. One issue: The state’s ban on 64-ounce “growlers” — essentially, takeout containers of beer — that they say makes no sense [“Growler Law a Groaner for Some,” page 89].

Another issue involves an exception to the requirement that brewers sell through distributors. The legal loophole dates to 1963, when the state Legislature began allowing Anheuser- Busch to offer beer to consumers at a brewery it operated at the Busch Gardens amusement park. The exception created a limited license for manufacturers to operate as vendors and came to apply to all beer makers who “promote the brewery and the tourist industry of the state.”

Small brewers in Florida have taken advantage of the loophole to sell their beer directly to consumers in tasting rooms — a move that the beer distributors eye warily. Mitch Rubin, executive director and lobbyist for the Florida Beer Wholesalers Association, which represents Florida’s Anheuser-Busch/InBev distributors, believes some of the craft breweries are pushing the envelope.

“The problem that arises,” says Rubin, “is when they want to sell other brewers’ beers at their tasting rooms. Then they start to look more like a retailer than brewers.”

Eventually, the craft brewers would like to loosen the laws so that they could distribute their products to bars and stores on a limited basis themselves — without going through a distributor. In Colorado, for instance, brewers can sell directly to retailers if they produce fewer than 300,000 barrels of beer per year. Allowing limited self-distribution in Florida, Aubuchon argues, would help new craft brewers market their products.

Tags: Politics & Law, Lifestyle, Manufacturing/Distribution

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