For many people it’s tough to imagine that craft beer is under attack again. Yet, it is. What craft beer represents is more than “just beer.” At its core, craft beer is what our American, and surely Floridian, economy should proudly represent. What do I mean by that? Craft breweries are largely family-owned and -operated businesses that operate responsibly within the legal framework of our State, promote the local businesses and restaurants in our cities, increase and invite a new form of tourism to Florida (which thrives on tourism, in case you didn’t know), hire local, use local ingredients, and have helped push the cultural identity of our generation. People are demanding quality local products, craft beer is providing them responsibly, so what’s the issue?
Unfortunately, large corporations (i.e., “big beer” and distribution companies) with financial muscle seek to influence the legislative process to deflate the boom of craft beer in a round-about way in the legislature. Here is where the issue grows beyond beer and into principle. Today, the Florida legislature has a choice, legislatively kill a growing artisan and largely family-run industry that is benefitting the State, or stand for the entrepreneurial spirit that our country and State were founded on and level the playing field in the beer industry. Good news is that the legislature is starting to see this for what it really is — an attack on small business and the free-market.
Earlier this month, The Miami Young Republicans hosted a Craft Beer Summit — which brought together two local brewery owners, Luis Brignoni, of Wynwood Brewing, and Eddie Leon, of M.I.A. Brewing; Gabriel Llanes, a representative of Americans for Prosperity; and Mitch Rubin, executive director of the ever-so-powerful Florida Beer Wholesalers Association (FBWA) — to debate the current legislative slugfest. We heard opening remarks from Representative Erik Fresen as well. Sparing you the minutia, the conversation, which I moderated, focused on the growler issue and the three-tier system. In a small victory for craft brewers, Rubin said that the FBWA had no intention of fighting against the 64-ounce growler bill. A growler is a vessel used by consumers to buy beer straight from a brewery for at-home consumption. Currently, 32-ounce and 128-ounce growlers are legal in Florida; 64-ounce growlers are not. It seems that everyone is on the same page, and this restriction likely won’t survive 2015. Bad news, the growler issue has been held as leverage by big beer and FBWA in an effort to gain ground on the issues surrounding the three-tier system.
At a very rudimentary level, the three-tier system is a system in which a brewery is required to use a distributor to get its beer to market at restaurants and stores. Why? Prohibition concerns; none of which apply today. However, breweries currently can sell their beer directly to consumers on-site at their breweries and still abide by this three-tier system. While the FBWA said it has “no issue” with growlers or breweries selling their own beer in their taprooms – the FBWA does have an issue with them doing so without selling it to a distributor and buying it back first.
Yes, you read that right. Under the FBWA’s interpretation of the three-tier system, breweries would be required to sell their product to a distributor and buy that same product back just to sell it to consumers at their brewery. Why? FBWA says because it’s a “vice” product. The irony is that wine has never been subject to the same system, even at a generally much higher alcohol content. What’s the significance of this proposed application? The policy would destroy small and new craft breweries. Taproom sales are integral to the success of these breweries. As Brignoni described, 20% of total sales are through the taproom, which in turn amounts to almost 50% of most breweries’ income. Hence, no taprooms, no craft breweries. Game over. What’s the benefit to consumers of this proposition? Absolutely none.
We’re watching a modern day David-and-Goliath battle for ground in a market that remains dominated by big beer. Still, craft beer is starting to throw some punches and is gaining ground on the valuable market share held almost exclusively by big beer. Even today, craft beer only holds about 10% of the market, depending on your source. Still, this is what scares big beer. This is what scares distributors. This is all about money. With each point of market share lost, so too go millions. So instead of evolving or meeting the demands of the consumer – they’re taking to the legislature. This is about as un-American as it gets.
What’s sad is that Goliath had support in our legislature during the 2014 session. Even among Republicans who pride themselves on championing the growth of Florida’s business environment, lowering regulation to support growth of our industries, and promoting innovation and creativity in business, Goliath remarkably found supporters. This year however, the tide seems to be turning. Led by Sen. Jack Latvala and Rep. Dana Young, among others, craft beer is finding its voice in Florida politics, an idea that was once foreign to the industry; yet, as they learned in 2014, would be crucial to its survival. Representative Erik Fresen made powerful remarks at the summit in support of the craft beer industry. It was refreshing to see him truly understand the issue. As Rep. Fresen made clear, he and many others in the legislature are becoming educated on the issue and would never vote for legislation intended to monopolize an industry and stifle growth in a responsible and growing sector of our State’s economy.
While the fight is far from over, craft beer, or its message, seem to be gaining traction in Tallahassee. This is a good thing. If not for craft beer, for small business in general.
Published in The New Tropic (February 18, 2015).