Senate Committee Advances Distribution 'Tariff' on Craft Brewers
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Craft brewers are fighting a Senate measure that would require them to pay a distributor when selling their bottled or canned product to customers, even if the beer never leaves the building.
The distribution requirement is part of a long-sought measure by small specialty brewers (SB 1714) that was supported 8-1 by the Senate Community Affairs Committee on Tuesday.
The bill would allow small specialty craft brewers to sell beer made on site when poured into individual customer's 64-ounce containers known as growlers, as they can with 32-ounce and 128-ounce containers. The brewers want that part of the bill.
The problem for the brewers is the distributor-backed portion of the proposal, which expands the state's Depression-era three-tier regulation on alcohol sales.
Under the bill, "you literally now have where the distributor comes in and says, 'How many beers do you want to keep? OK, you want to keep 10 cases of your own beer, how much are you going to pay us to keep those?'" Joshua Aubuchon, a lawyer and lobbyist for the Florida Brewers Guild, said after the committee meeting. "That's very problematic for us."
Sen. Kelli Stargel, R-Lakeland, said the measure that came out of her Regulated Industries Committee protects the three-tier system and ensures the state knows how much beer has been brewed and entered the vendor system.
"Each step along the way, there are various different taxes collected," Stargel said. "We also have regulations in place so that we don't have basically wholesale beer throughout Florida."
The three-tier system requires that the manufacture, distribution and sale of alcoholic beverages be separated.
With a few exceptions, retailers have to buy their products from distributors who in turn buy their products from the manufacturers.
Distributors are licensed to sell and distribute alcoholic beverages at wholesale to people who are licensed to sell alcoholic beverages at retail.
Only licensed vendors are permitted to sell alcoholic beverages directly to consumers at retail.
Sen. Jack Latvala, R-Clearwater, criticized the measure's distribution requirement as a mob-style shakedown.
"If we're going to have to pay this tariff, if we're going to pay this sort of like protection to Vinny in New York, they ought to at least move the goods," said Latvala, who voted against the bill.
Latvala failed in an effort to have an amendment added to the bill that wouldn't have required craft brewers to pay distributors for beer that isn't transported by distributors.
Matt Sokolowski, a board member of Great Bay Distributors in Pinellas, Hernando, Citrus and Pasco counties, told the committee the tier system helps craft brewers sell their product.
"It's creates clarity, it creates order, it covers a gray area that these craft breweries are operating in," Sokolowski said.
A similar distribution requirement is not in the House measure (HB 1329), which is closer to what the craft brewers support.
An amendment added to the House measure on March 24 by Sarasota Republican Rep. Greg Steube legalizes the 64-ource growlers, while limiting the amount of beer that could be sold at a brewer's taproom and the number of taprooms that could be owned by a brewer.
As with the Senate proposal, the House version requires growlers to be labeled and sealed when filled with a local craft brew. Also, the bills require the growlers to be taken off-premise for consumption.