The Beer Issue 2018: Taps in Tally

Craft brewers press for changes to Florida's three-tier distribution system.

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click to enlarge Florida brewers during a recent trip to the state capital. - Courtesy of Sean Nordquist
Courtesy of Sean Nordquist
Florida brewers during a recent trip to the state capital.

The craft beer movement in Florida is in full stride. With more than 200 breweries operating across the state and new additions opening every month, it seems residents and visitors can’t get enough locally brewed goodness. From IPAs to sours, from Pensacola to the Keys, the beer styles in our home state are as diverse as the culture.

However, with ingenuity and progress come the growing pains of any booming industry. There are regulations and laws on the books at the state, county and city levels that continue to make the process of building a brewery — and getting product out to the masses — no easy feat.

Since the end of Prohibition, Florida, along with 31 other states, has adopted the three-tier system of alcohol distribution. The system operates like this: An importer or manufacturer can sell its product to a wholesale distributor, which can then sell it to a retailer that can sell it directly to the consumer.

These laws were originally intended to protect wholesalers from the prospect of larger breweries leaving, which could destroy a distributor. Now, through proposed modernization laws, groups like the Florida Brewers Guild are trying to get free-market distribution and change the current beer laws to be on par with many other states in the U.S.

“We feel it is important to spend some time face-to-face with our representatives, especially when they can talk to brewery owners who are in their districts who can explain first-hand the impact of various legislation on their businesses,” according to Sean Nordquist, executive director of the Brewers Guild. “Many of the representatives do not really think about breweries as the job-creating manufacturing industry that they are. By being able to put real businesses in front of them, it makes it much more likely they will listen to the arguments being made by The Guild.” 

During last year’s session, the State House filed a bill that would allow new breweries that haven’t yet signed with a wholesale distributor the option to self-distribute up to 7,000 kegs of beer without going to a more traditional distributor in the three-tier system.

The bill wasn’t passed and won’t be a part of the 2018 session, but there is a revision in the works. Points of contention remain, however; some wholesalers see this as increased competition in the market that will hurt their bottom line and some retailers are split. Other retailers, on the other hand, see it as great way for smaller breweries to deliver beer to them directly, cutting out the middleman, keeping costs fair and purchasing beer they might’ve never had the chance to score because of the current model.

That legislation also comes on the heels of the Craft Beverage Modernization and Tax Reform Act’s passage. The bill decreases the federal excise tax that breweries have to pay per barrel, meaning domestic beer makers producing less than 2 million barrels annually now spend $3.50 a barrel — instead of $7 — on the first 60,000 barrels.

As the beer business continues to grow in the Sunshine State, there must be more transparency to the consumer and education on what this all means. Two main, and completely different, sides of the spectrum are the Florida Beer Wholesalers Association and the aforementioned Florida Brewers Guild — both of which promote drinking responsibly and in moderation. 

The Brewers Guild aims to help brewers around the state through education and connect them to enhance communication and community. But lobbying for better beer laws is also a part of the group’s mission: laws that would provide for free-market distribution, prevent distributors from making restrictive contracts with breweries, and allow some form of limited self-distribution that would enable small brewers to enter the retail market.

“We really want to see these changes happen with the help and cooperation [of] our distribution partners because we believe it would benefit the entire beer industry,” said Coppertail Brewing Co.’s Kent Bailey, president of the Brewers Guild. “We couldn’t do what we do as a brewery without our distribution partners, and we want to be sensitive to their needs as well.”

Meanwhile, the Wholesalers Association is focused on protecting their distributor members from the potential departure of giant breweries, a move that would be devastating for business.

We’ll see what the next few years will look like for the Florida beer industry with this next session in Tallahassee. 

Connect with CL contributor and certified cicerone Thomas Barris on Twitter.

Editor's note: This story has been updated since its original publication.

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