Legislation Enhances Florida Craft Beer Industry

Baker Donelson
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While many states, including such craft beer meccas as Colorado, Oregon and Vermont, have been embracing the explosion of the craft beer culture in America, Florida has been waging war against craft beer in true prohibition-era fashion. As the craft beer meccas are pulling in new capital, creating new jobs and fire-starting new industries, Florida has been torturing the few craft brewers brave enough to listen to the siren-song of the Florida sea breeze.

Florida has approximately 110 breweries (10th in the U.S. in total number) and produces the 5th most barrels of craft beer a year. Approximately 65 craft breweries have opened up shop since 2011. All of this growth came with an antiquated three-tiered system and without the market-preferred sales vessel. Although Florida is one of the highest beer producing states, it is ranked 43rd for the number of craft breweries per capita at 0.8 per 100,000 of population. That is the second largest discrepancy between total number of breweries and breweries per capita (Texas is the largest). Compared to the 6.1, 7.4 and 8.6 breweries per capita for Colorado, Oregon and Vermont, respectively, Florida is ripe for growth.

The major hurdle facing aspirational brewers from becoming the next major innovator is not finding capital, securing the perfect venue, creating the next great recipe or even securing a Sherpa to guide them to the perfect hops in the remote hills of Nepal – it is Chapter 561 of the Florida Statutes. A name that even the most grizzly-bearded brewer feared.

But the winds may have shifted. On July 1, 2015, Florida Law 2015-12 (the “New Beverage Law“) will become effective, opening a safer passage for a successful Florida craft beer venture. The New Beverage Law will allow entrepreneurs to operate taprooms without having to promote the “tourist industry” of Florida. It will also allow craft breweries (and certain other alcohol license holders) to sell 64oz growlers. Nevertheless, Big Beer extracted its concessions. Breweries may not operate more than eight taprooms. And, unless a brewery enlists the services of a distributor, it can only make intra-brewery transfers of barrels only up to the total production of the smaller brewery. For example, if brewery wants to transfer beer from its facility producing 50,000 barrels a year to its facility producing 10,000 barrels per year, the brewery may only transfer 10,000 barrels a year unless it hires a distributor to transfer the excess barrels.

All in all, this is a net win for the Florida Craft Beer Industry and makes Florida a more competitive market for entrepreneurial brewers. Before the New Beverage Law, taprooms were granted licenses based on a tourism loophole created for Anheuser-Bush and Busch Gardens. These taproom licenses were being challenged in Florida courts. Until the New Beverage Law, Florida was the only state in which breweries could not sell 64oz growlers, which are regarded as the market-preferred sales vessel. Now the 64oz growlers will be capturing their rightful place in the market. The changes enacted by the New Beverage Law coupled with Florida’s reputation as an entrepreneurial-friendly state have made it time for the Florida Craft Beer Industry to rise.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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