New Proposed Law Could Shake Craft Brewers’ 3-tier System
Source: Orlando Business Journal | By: Veronica Brezina
A proposed craft brewery bill in Florida could collapse the tower of the three-tier system that now exists between breweries and distributors.
The state House on Feb. 7 filed House Bill 679, a companion bill to Senate Bill 554, which would give small businesses looking to break into the craft-brewing business a chance to deliver up to 7,000 kegs of beer without going through a distributor.
The House bill — sponsored by Rep. Charles Wesley “Chuck” Clemons Sr., R-Jonesville — now will be under serious consideration in this year’s legislative session, which begins on March 7.
If passed, the new law would allow certain craft breweries that don’t already have an existing agreement with a distributor to self-distribute with limitations.
The existing three-tier system requires breweries to use a distributor to ship their beer. Distributors buy the beer from a brewery at wholesale and then sell the beer to restaurants, bars and retail stores at an increased cost.
“Breweries and distributors who don’t qualify under the bill, would be put at disadvantage with competing with brewers under the bill,” Executive Director of Florida Beer Wholesalers Association Mitch Rubin told Orlando Business Journal.
However, some local craft brewers previously told OBJ they would welcome the new law.
“We just started to distribute, so I understand the impact,” Tom Adams, owner of Winter Park-based Deadly Sins Brewing LLC, previously told OBJ. “We’ve got so many places around us that want to carry our beer and our distributor has been great. But most distributors can take up to 30 percent of the profit, so that’s the largest impact this bill could have.”