The war over beer in Florida is once again coming to a head — albeit in a covertly gentle way, according to those who would be most affected. It’s a complicated, technical dispute — full of legalese like “tied house evil” (the practice of selling alcohol directly to consumers, and an actual phrase in Florida statutes), “brew pub exception” and “tourism exception” — but it boils down to this: The big brewers, like Anheuser-Busch and Miller, believe the little guys have been exploiting a loophole in a vaguely written law, and with the craft beer industry gaining an ever-firmer foothold in the suds market, they want the state to do something about it.
Specifically, they want the state to stop giving breweries licenses that enable them to have taprooms until they can get some “clarification” on what the law actually says.
“The point is to ask the department how they apply that particular statute,” says Samantha Padgett, the general counsel for Florida Retail Federation who is handling the petition. “They are giving people an exception in a highly regulated industry without a clear standard about how they can use that exception.”
The existing law is something of an anachronism, forged after Prohibition to regulate the beer industry. As in many other states, the law in Florida creates three tiers of vendors — manufacturers, distributors and retailers — and forbids any business from functioning in more than one tier at a time. In other words, manufacturers cannot sell their products directly to the public, and have to go through distributors and retailers.
But here’s the catch: Over the years, the Florida Legislature has tinkered with that law, most notably with the tourism and brew pub exceptions, which were carved out to enable the Busch Gardens theme park to sell beer on its premises. But these changes weren’t written concisely, so as the craft beer movement grew, scores of breweries filed for, and received, tourism or brew pub exceptions, and are today permitted to sell their beers onsite. (Ostensibly, the ones that received tourism exceptions are considered, for legal purposes, tourist attractions. Brew pub exemptions, meanwhile, are granted to brewers that do not sell more than 10,000 kegs of their product onsite every year.)
Ben Davis, the owner of Intuition Ale Works in Riverside, where the beers are manufactured and sold onsite, says he doesn’t understand why the federation wants to change the rules. Craft brewers — including locals like Green Room Brewing, Bold City Brewery, Engine 15 Brewing Company and others — make only about 7 percent of their beer sales directly.
“Ninety-five percent of our beer is sold through retailers,” says Davis, whose grandfather and several great-uncles founded Winn-Dixie; the family has no connection to the supermarket chain now.
In its petition to the state’s Department of Business and Professional Regulation (DBPR) Alcoholic Beverages and Tobacco Division, filed last week, the Retail Beverage Council of the Florida Retail Federation Inc. said the law was put into place because, under tied house evil, having direct relationships between manufacturers and retailers “led to excesses such as overly aggressive marketing, monopolistic practices and intemperance,” and “the three-tier system allows for a comprehensive, transparent, accountable, stable and effective regulatory environment.”
So who’s behind this latest move? The craft breweries who spoke with Folio Weekly suspect it’s the wholesalers who are getting cut out of direct-to-consumer sales. The Retail Federation’s Padgett says it mostly represents retailers, specifically its 73 members who sell alcoholic beverages and think these execptions give craft brewers an unfair advantage.
Not only can the craft brewers sell on premises, therefore avoiding both the wholesaler and retailer tiers, they can also sell beer to go, in growlers. This, too, has been a point of contention. Florida is currently one of only three states, along with Mississippi and Idaho, that do not allow half-gallon growlers — 32-ounce growlers and 128-ounce growlers are A-OK, but not 64-ounce — and for the last few years, craft brewers have been fighting to change that. Last year, however, a bill that would have legalized half-gallon growlers was larded up with restrictions on direct-to-consumer sales that craft brewers considered untenable. They ended up fighting and defeating the growler bill.
But then in December, the head of a trade group for Anheuser-Busch announced no-strings-attached support for repealing the growler ban, which seemed to signal a détente of sorts in the ongoing beer war — at least, that is, until this latest petition.
“With the amount of beer that is consumed in the state of Florida, what is consumed in a craft room is such a small amount,” Davis says. “They have this willingness to fight at the expense to their image because in the entire state they want to control every drop of beer. That’s what I would say on the surface is what they are looking to do. In the long term, they are looking at how to change how our taverns operate.”
Padgett says her group isn’t trying to put any of the craft brewers out of business; rather, she says, the rules need to be clarified, whether by DBPR or, most likely, the Legislature. “Our goal is clarity, whether through the department, or however, to make it clearer. That’s where we want to be,” she says. “Go to the legislators. You’re talking about the Legislature.”
Davis — whose company lobbied hard against last year’s efforts to enact restrictions on craft breweries — doesn’t buy it. He says the new petition is just the next step in a fight wholesalers have been waging against companies like his for years.
“They haven’t been able to get it through Tallahassee, so now they’re trying to get through legal means,” he says.