The beer will be flowing tonight in the tasting room at Fort Myers Brewing Company, a craft beer producer located on Commerce Lakes Drive in Gateway.
But it may not be flowing at some point in the future.
Two lawsuits have been filed against the Florida Department of Business and Professional Regulation for permits they’ve granted to craft breweries – also known as microbreweries. The permits allow the microbreweries to sell their own products at their establishment for immediate consumption by consumers without having to go through a distributor like the major breweries, wine and liquor producers are legally required to.
The lawsuits have been brought by the Florida Retail Association and the Florida Independent Spirits Association.
It’s worrisome enough for the microbreweries to go up against those two highly organized and well-funded and associations, the latter of which counts the state’s largest liquor sales chain ABC Wine & Spirits as one of their members. However, the big boom came a few days ago when Anheuser-Busch and MillerCoors threw their considerable weight behind the lawsuits in support of the plaintiffs.
In an email to the Sun, Fort Myers Brewing Company’s co-owner Rob Whyte explained the history and what many would call the hypocrisy of Anheuser-Busch getting involved: “A long time ago in Florida there wasn’t a way for a malt beverage manufacturer (brewery) to also obtain a consume on premise license (tasting room). Budweiser wanted to open Busch Gardens so the Florida legislature stepped in and created an exception, called the tourism exception. All of us microbreweries in Florida that have tasting rooms operate under this tasting room exception. Now that Budweiser no longer owns Busch Gardens they want to cry foul, ‘that exception was never meant for you’ is what I recall hearing last year on this subject. Amazing that big business thinks that it should play by one set of rules and small business should be forced to play by another set of more restrictive rules.”
Busch Gardens is a theme park in Tampa.
Not surprisingly, the plaintiffs in the suit are trying to curb any potential backlash from the public. This was already the big kid bullying the little kid on the playground, but with Big Beer now inserting themselves it’s evolved into somewhat of a David versus Goliath scenario.
In a January 12, 2015 article in the Associated Press, Florida Retail Association attorney Samantha Padgett said, “We’re not asking for [the Florida government] to withdraw any licenses. Moving forward, we’re asking them to stop issuing licenses as of right now under their current practices and to design a rule that better explains how the law should be applied.”
Problem solved then. Whyte has nothing to fear.
Because if there’s anyone you can trust … it’s your competitors’ lawyer who is literally seeking a court order to force the State of Florida to put an end to your type of business permit.
Many craft brewers aren’t buying Padgett’s position and are fearing that these lawsuits are just the first step in an attempt to eventually put an end to tasting rooms across Florida.
To highlight the microbrewers’ distrust, consider for a moment that Florida is the only state where a company like Whyte’s can sell its customers two separate 32oz growlers of their beer, but they cannot sell them a 64oz growler. For people who aren’t craft beer drinkers it may not seem like a big deal, but the oddity is that it’s perfectly legal to sell a 128oz growler.
The 64oz size is an industry standard and is easily the favorite size of growler for craft beer drinkers nationwide. Microbreweries claim the fact major brewers work year-in and year-out to prevent the popular 64oz from being sold in Florida is a sign that Big Beer is not acting in good faith or being fair.
But one could also ask how it’s fair to restaurants and bars that the microbreweries get to enjoy a 30% (or more) price advantage since they don’t need to pay a distributor for products like restaurants and bars do?
It’s a fair point. Saving the cost of having to go through distributor is a distinct advantage of the tourism exception, however the license does have drawbacks as well.
Unlike the tasting room at a microbrewery, restaurants and bars can have a full-blown liquor license and far more variety in their product offerings. The beverages that restaurants and bars sell typically enjoy widespread brand recognition such as Budweiser and Coors Light. Craft beer drinkers are also a far smaller segment of the population compared to beer drinkers who enjoy brand-name beer. When you combine the large brewery’s customers with hard liquor and wine drinkers, it gives restaurants and bars a significantly larger target market.
The tourism exception is an advantage in some ways for microbreweries, but a case could be made that the limitations that come with the exception outweigh the benefits.
The larger question, and the real subject of the lawsuits, is how is it fair to large breweries and spirits manufacturers in Florida who are forced to abide by the so-called “three tier system” in place in Florida and most other states?
For the sale of alcoholic products the normal distribution chain goes from manufacturer (first tier) to distributor (second tier) to the stores/restaurants/bars (third tier). Due to the permits they operate under, craft breweries get to bypass the middleman.
It was not the intent of the Florida legislature that dozens of microbreweries would be able to use the tourism exception to operate large tasting rooms that double as a place for social gatherings. That said, it was Anheuser-Busch that set the precedent for the tourism exception in the first place and now that the rules no longer suit them it seems disingenuous that they want the exception gone or replaced.
The saying goes that there’s two sides to every story, but in this story there are about four or five sides. Considering all of the complexities maybe the licensing does need to be redefined somehow.
Perhaps a hybrid solution could be found that would allow the tasting rooms to continue while also providing the “clarification” the Florida Retail Association and Florida Independent Spirits Association says it seeks.
Keeping in mind that a craft brewery’s main long term goal is not to operate tasting rooms but rather to have their products sold in stores and restaurants everywhere, perhaps the State of Florida could define a craft brewer as any brewery that only sells to stores and restaurants in the state of Florida. In this example, as long as they only sold within Florida then they could maintain a tasting room without the use of distributors as they do today.
After-all if the brewery’s products are good enough then the size of the market in Florida should be sufficient that the brewer could develop a customer base and then make a business decision to choose between operating their tasting room distributor-free, or expanding out of state.
That’s just one possibility and the solution could obviously be something completely different. The more important point is that if the rules are going to be changed on the fly it seems only fair that new and existing microbreweries need to be given a chance, and those aligned with Padgett should be taken at their word that they don’t condone shutting down the tasting rooms.
One thing that seems certain is all that parties involved in this dispute want a solution.
Maybe the owners of microbreweries, the association reps and executives from the large brewers should sit down, have a beer, and work it out.
EDITOR’S NOTE: Brendan Farrington’s article in the AP was one source for this story.