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Florida's Burgeoning Craft Beer Scene Is Under Attack

Proposed changes at the legislative level would affect the way craft breweries are allowed to sell their own products.

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Cigar City/Facebook

Florida’s craft beer scene has absolutely exploded in the past half-decade, with dozens of small to mid-size brewing operations bubbling up inside the Sunshine State. There are popular craft heavyweights like Tampa’s Cigar City, of course, but more often than not the state’s fledgeling crop of new breweries exist somewhere in the murky middle between success and failure.

There are massive financial considerations to starting a craft beer company, the least of which is distribution. As of late, Florida’s entire three-tier beverage distribution system (brewer, distributor, consumer) has come under attack in the state’s court system, and there are a few big names at play that are trying to keep the craft beer industry at bay.

The law has enabled younger breweries to pour pints, sell cans and even fill growlers on premises...

Currently, Florida’s mandatory distribution system ensures that most large-scale production houses sell exclusively to an outside distributor who then resells the product to point-of-sale businesses like bars and bottle shops. It’s an expensive second step for the thin-margined craft beer industry, which isn’t able to realize the full value of their product at the retail level when they’re forced to first sell through a distributor. To help circumvent the distribution system, many craft beer operators have been leaning on a longtime state exemption, initially meant for Anheuser-Busch, which allowed the brewing giant to sell on-site in the days when they owned Busch Gardens. The law has enabled younger breweries to pour pints, sell cans and even fill growlers (more on that in a minute) on premises, avoiding distributors so long as they kept their beverage sales on their own property.

A Cigar City Tap Room and Brewery

Now, that loophole is coming under attack from a wide network of state distributors and craft beer giants, both of which share a common enemy: the slow degrading of their market influence thanks to the arrival of craft beer breweries and their ability to sell their product themselves. Guised as an attempt at ‘clarifying’ the law, the Florida Retail Federation (a group composed of companies like Anheuser-Busch and MillerCoors which, not coincidentally, own most of the state’s distribution licenses) has sued the Department of Business and Professional Regulation over what they call improper issuances of retail licenses to those breweries who operate on-site tap rooms or fill growlers.

This time, the craft beer industry is fighting back.

After previously losing several legal challenges to the state’s laws that govern growler fills, the Florida Brewers Guild is standing their ground on the legality of their retail licenses, and is already halfway to funding a $100,000 Indiegogo campaign aimed at raising money for their legal defense. Should the tightening laws go into effect, the Guild claims, dozens of breweries will immediately be squeezed to the breaking point, thanks to a system that would require craft beer producers to sell their own product to a distributor, and then immediately buy back the stock (at a considerable markup, naturally) in order to resell on site.

For now, the fight is ongoing in Florida’s court system, though some craft beer advocates are concerned about the amount of money being thrown around on the opposing side. Traditionally, even consolidated networks of small brewers have been unable to match funds with massive corporations like AB InBev and MillerCoors, especially in state court where influence and legal maneuvering cost million of dollars.

This time, the craft beer industry is fighting back.

While drinkers shouldn’t expect a full resolution any time soon, it’s important to note that the Florida Retail Federation is seeking what amounts to a legal injunction to stop all on-site sale at craft beer breweries until a legal resolution is reached. The problem there is timing: Florida’s state legislature won’t be taking up the issue until at least March, meaning there’s an immediate potential for lots of empty tap lines at some of the state’s most popular breweries. At least until this whole thing gets figured out.

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