Beer wholesalers in Florida have voiced mixed feelings with regards to a sweeping, multi-pronged bill that would, if passed, overhaul how the state’s beer industry is regulated.
As Brewbound reported last week, House Bill 107, as written, would revamp the inner-workings of franchise agreements, legalize limited self-distribution, clarify brewery retail rights, and put an end to the ongoing growler debate by legalizing 64 oz. containers.
There are some provisions of the 50-page bill that the wholesalers who spoke with Brewbound are mostly, if not entirely, okay with, chief among them the legalization of half-gallon growlers. Both the Beer Industry of Florida (BIF) and the Florida Beer Wholesalers Association (FBWA), two distributor networks aligned with MillerCoors and Anheuser-Busch respectively, have gone on record in the past in support of legalizing the containers.
But other facets of the proposed legislation, they say are less than okay.
One big snag comes in the language pertaining to franchise agreements. The bill would enable small brewers (those that comprise less than 50 percent of a wholesaler’s business) to sign contracts that expire after five years. All existing deals signed prior to July 15, 2015 would automatically expire on June 30, 2020, should the bill pass as written.
“There’s no crack in the door for us on any sort of franchise exception,” Eric Criss, president of the BIF, told Brewbound. “We oppose any change to the franchise laws in Florida.”
Jay Martin, president of J.J. Taylor Distributing (a member of the BIF), said that while he believes such a carve out would not impact his business in particular — “I would like to believe none of our brewers would want to leave us.” — he does think it could potentially be harmful to other wholesalers, retailers and brewers alike.
“Depending on what the legislation comes out to be, to have to go through that every five years,” he said, “I’d rather spend my time representing and selling the great breweries we represent rather than talking about contracts and stuff that doesn’t ultimately get beers to retailers and consumers.”
It’s worth noting, J.J. Taylor, which was named the craft beer wholesaler of 2014, only has one supplier that comprises more than 50 percent of its business, according to Martin, and that’s MillerCoors.
The issue where things get a bit cloudier is over the bill’s handling of retail rights. As written, the bill would make clear a brewery’s right to operate tasting rooms (something they can currently do, albeit under review (ADD LINK HERE).
Mitch Rubin, president of the FBWA, would not comment on any one specific aspect of this bill (he opted instead to say that the whole thing needs work) but last week told Brewbound he supports the rights of all breweries, regardless of size, to operate tasting rooms.
“We, the Florida Beer Wholesalers, support a tasting room for every brewery,” he said at the time.
The BIF has said as much, as well.
As to why that’s bit murky to some: both the BIF and FBWA have sought to intervene in an effort brought forth by a pair of retail advocacy groups to clarify the legal gray area in which breweries currently operate tasting rooms. Though their stance is simply that they wish to clarify a “tourism exemption,” some brewers contend the wholesalers entered a campaign to deliberately derail tasting rooms, both in planning and potentially those already operational.
Rubin said that simply wasn’t the case.
“What we don’t want to see in effect is an alternative retail model of opening up what people would call a brewery really for the purposes of full retail privileges out the door,” he said.
Criss added the issue is also important because it paves the way toward self-distribution, which is currently illegal in the state. The bill aims to lift the ban and allow for self-distribution of up to 5,000 barrels. But because of its relevance to operating retail fronts, Criss said, nailing down a clear picture of how retail licenses are granted to brewers is necessary before figuring out self-distribution.
“Until we get the brewer retail issue resolved, the Beer Industry of Florida opposes self distribution, even with the volume cap,” he said. “If we can figure out how to do a taproom license for small brewers that is sort of narrowly focused and reasonably limited then we would be willing to discuss limited self-distribution with the volume cap.”
For his part, Martin said he’s not opposed to limited self-distribution, adding he thinks most brewers would realize how beneficial their distributor relationships are upon finding out how difficult brewing and distributing at the same time is.
“My canned answer is have at it,” said Martin. “It’s not that easy and it’s expensive.”
But what all three unilaterally agreed on was the need to sit down with all parties with skin in the game — brewers, distributors, and retailers alike — and hash out the differences to find middle ground.
“Everything in the bill is important,” said Rubin. “It’s really a very large project trying to tackle a whole lot of issues.”