Craft Brewing Bill Passes Senate

Apr 29, 2014

Fermentation Tanks at Proof Brewing
Credit Nick Evans

A bill meant to clarify the operation of small brewers in Florida passed the Senate Tuesday.  But, many see the the measure as an attempt to limit the growth of the craft brewing industry.

Throughout the country, craft or micro breweries have been growing in popularity.  The Brewers Association, a group promoting craft brewers, says nation-wide the industry provided over 100,000 jobs, and was worth about $14 million in 2013. 

Sen. Kelli Stargell (R-Lakeland) has proposed a bill to set standards for how these brewers distribute beer in Florida. Stargell’s bill allows them to sell 2,000 kegs worth of beer from their brewery, but for any production beyond that limit, there would be a 20 percent cap on at-brewery sales. 

“So, it’s not limiting to their growth.  It gives them the opportunity to have less regulation as they go through the process of growth, but then when you get larger, you work with your distributors like everybody else does,” Stargell says. “But you still have that exemption of 20 percent and that’s for everbody – from Anheuser-Busch all the way down to the smallest of breweries.”

But fellow Sen. Jack Latvala (R-Clearwater) thinks differently.

“I can tell you, in my printing business, I would hate – as small as I am – I would hate, to have a statute that said when I grew to a certain level, that I might threaten my competition, that then I would have to – the rules would change, and I would have to change the way I do business.  And that’s what this bill does,” Latvala says.

Alcohol distribution in Florida operates on a three tier system. This means a brewer sells beer to a distributor, who then sells it to a retailer – places like grocery and liquor stores.  But distribution deals aren’t always available or attractive for small brewers, and they often apply for licenses allowing them to sell their beer directly from the brewery.

But this raises complications of its own.  Byron Burroughs, owner of Proof Brewing Company in Tallahassee points to restrictions on bottle size – in particular, restrictions on what are known as growlers, or oversized bottles ranging from 32 to 128 ounces.  Burroughs says the craft brewing industry has been pushing the legislature to remove limitations for years. 

“It’s what happens every year.  For the last few years we come with a growler bill,” Burroughs says. “So, the goal is to just do away with the bottle sizes.  The current bottle sizes, as everyone knows, are rather ridiculous.  You can do a 32 and 128, I can sell you a five liter or nine liter Belgian beer bottle, but I can’t sell you a 64 like you can get in 47 other states."

But this year, Burroughs says, lobbying groups for major beer distributors have claimed such a change would be detrimental to the three tier system.  In response, Stargell has crafted the 2,000 keg and 20 percent benchmarks.  But Burroughs says these figures are arbitrary and don’t reflect the difference between craft and major brewers.

“Our brewery on Tennessee St. – she actually misquoted us, saying we only did 462 kegs; we actually did almost 1,000 barrels out of that brewery.  Anyone that’s seen our brewery on Tennessee St., it’s about 500 square feet - it’s tiny.  Tiny, tiny system, tiny production capacity; so, 1,000 barrels, or 2,000 kegs of beer is really nothing,” Burroughs says.  

Stargell’s bill passed the Senate 30-10 and Stargell says small brewers will still have the flexibility they need to grow.

“It does no harm to the industry,” Stargell says. “It allows them to grow, it allows them to work in certainty of the law, so they can do everything they’re doing now, and more”

But Latvala worries the bill will have a different effect.

“Well, I have a number of these small craft brewers in my district,” Latvala says.  “They’ve been very successful, they’re growing very fast, and now the big distributors are looking at them as a threat so they want to try to stifle that growth, and I just think that’s wrong.”

Latvala also says the bill’s passage doesn’t square with his  party’s outlook.

“As a Republican, I’m supposed to be about – we’re supposed to be, as Republicans, about free enterprise, about leaving the market alone, and we don’t practice what we preach.”

Latvala remains confident the House will not pass the bill.  Burroughs, though, isn’t quite so sure.

“So far what I’ve seen this session is you have no idea what’s going to happen,” Burroughs says.  “Between individual political agendas and motivations, what I have definitely learned is what makes sense or what’s necessarily right is not really what’s going to happen, or pass a committee, or possibly become law."

A similar bill in the House is at its final committee stop.