Two retail advocacy groups and a couple of powerful wholesaler networks in Florida are challenging a state law that allows brewers to operate as vendors, leaving many in the craft industry in fear that their businesses may be at risk.
For years, brewers in the state have been able to operate on-site tasting rooms outside of the framework of the traditional three-tier distribution system thanks to a tourism exemption, originally written to allow Anheuser-Busch to sell beer products at Busch Gardens, a theme park the company owned at the time. But now, retailers and distributors are questioning whether that carve-out should be universally applicable to all brewers.
Last week, the Florida Retail Federation filed a lawsuit against the Department of Business and Professional Regulation seeking clarification on how the state doles out licenses to brewers operating retail fronts. Separately, the Florida Independent Spirits Association filed a petition of its own with the same goal in mind. Co-signing the effort, the A-B affiliated Florida Beer Wholesalers Association and the MillerCoors aligned Beer Industry of Florida filed motions of their own in support of the retailers.
Mitch Rubin, executive director of the FBWA, told Brewbound that the clarification on the rule is necessary because the rule does not make clear whether every brewery in the state is allowed to hold a retailer license under the tourism exemption. Rubin and his allies contend that a brewery needs additional business components that boost tourism – like a Busch Gardens theme park, for instance – in order to qualify for the carve-out.
“The breweries have no other structure [supporting tourism],” said Rubin. “The division needs to write a rule that says – what are the other structures required in order to be granted the retail license?”
Samantha Padgett, general counsel for the FRF, reiterated that, saying that while some breweries, like Tampa’s relatively well-known Cigar City Brewing, could stand alone as tourist destinations, other, lesser known breweries, might not make that cut. Those breweries would need an additional component that boosts the state’s tourism industry overall to justify using the carve-out, she said.
The groups are calling for the state to cease issuing new retail licenses to breweries until the matter is resolved — though they say they don’t wish to halt operations at pre-existing tasting rooms.
But some brewers aren’t buying the retailers’ interpretation, and say they believe it’s an effort to create additional roadblocks for brewers and could stifle growth.
“There’s a chance a judge could absolutely determine that breweries are not operating within the letter of the law. The way our attorneys are [explaining it], it absolutely could shut down an existing brewery,” said Joey Redner, founder of Cigar City. “If that gets into a judge’s hands and he interprets it, how we feel would be incorrectly, he would be able to shut down not just future tasting rooms but already operating tasting rooms.”
Those behind the move to further examine the law, however, insist that is not their intent. Padgett said it’s important for the rules to be clear when dealing with an industry as highly regulated as beer.
“I don’t think it’s ever our intent to stifle market growth or economic growth in the state of Florida,” she said.
Rubin said he supports the ability for breweries of all size to operating tasting rooms, calling it a pro-brewery stance that falls in line with his organization’s recent public endorsement of growler reform.
Redner, however, still sees the latest lobbying effort a bit differently.
“I think it’s a serious issue for the continued growth of other breweries,” he added, noting that Cigar City’s own tasting room has “really been the incubator that has allowed us to grow. Taking that off would curtail our growth potential.”