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Law restricting Florida craft beer breweries up for vote

NY State Ends Tax Exemptions For In State Breweries After Lawsuit From Out Of StateThings have been brewing in Florida’s state legislature, but not to the benefit of the state’s craft beer brewers. In fact, one bill – Senate Bill 1714 – makes it illegal for a brewery that produces more than 2,00 kegs per year to sell its own beer in bottles or cans directly to consumers. Instead, the brewery must sell the beer to a distributor and then purchase it back at the distributor’s price, typically 30% to 40% higher.

Jacksonville brewery owner Ben Davis of Intuition Ale Works has made it his mission to defeat the bill and preserve the rights of Florida brewers to sell their own beer in their tap rooms. Davis has attended sessions at the Florida senate where the bill has been discussed and even hired a lobbyist to work the political circles and inform elected officials of the damage 1714 would cause. In an interview on Jacksonville television station WJXT, Davis said, “It’s going to kill us. It’ll make us question our whole business plan… I think basically it’s going to push future brewers into other markets, other states.”

Watch the entire story from WJXT by clicking the link at the bottom of this article.

In a press release dated April 21, 2014, Eric Criss, president of the Beer Industry of Florida – the industry association for Miller/Coors distributors in Florida – made it clear that his organization was opposed to SB 1714. In the release Criss said, “Brewers and distributors are good partners and some craft brewers need limited retail privileges to build their businesses.  Therefore, it’s in distributors’ interest that small brewers should have a well-defined, limited exception in the statute that allows them to operate as retailers, both on-premise and off-premise.”

Criss also came out in support of 64-ounce growlers, currently banned in Florida, but the industry standard in 47 other states.

On the other hand, the Florida Beer Wholesalers Association has been a strong proponent of the bill and has more than doubled its contributions to the re-election campaign of senators who have voted to pass the measure. According to an article in the Miami Herald April 22, 2014, the association has contributed $65,600 to 2014 or 2016 senate re-election campaigns.

In addition, Senate President Don Gaetz, R-Niceville, came right out and told the Associated Press that he would support the bill unquestioningly because craft breweries were a problem to his friend Lewis Bear, owner of the Anheuser-Busch distributorship in Florida’s panhandle. Gaetz received more than $8,000 in contributions from beer distributors for his 2012 campaign with Bear anteing up $2,000.

Mitch Rubin, executive director and lobbyist for the Anheuser-Busch distributer group Florida Beer Wholesalers Association, told Reuters their goal is to re-write the state’s rules governing the craft brewing industry to create strict lines between manufacturers, distributors and retailers, which he said would preserve competition. But, many industry insiders say the actual result of the bill would be to eliminate small breweries that need the ability to sell packaged beer from their tap rooms to foster their own growth.

Still, Senator Kelli Stargel, R-Lakeland, the legislation goal is to bolster the three-tier system of alcohol distribution set up by the federal government after Prohibition. In the three-tier system brewers must sell their beer to distributors who then sell the beer to retailers. The system was originally put in place to keep large beer companies from monopolizing the industry. Somehow, that same system has now been turned to the favor of the mega-beer producers who carry political clout because of their deep pockets and campaign sponsorships.

Senate Bill 1714 has already passed its committee hearings and will be brought up to the full senate on Monday, April 28. Senate has until the end of the scheduled legislative session to pass the bill or it is considered dead. The scheduled date to close the current legislative session in the Florida senate is Friday, May 2.

Intuition Ale Works and Davis have announced that they will hold a post-legislative session wrap-up event at the brewery Saturday, May 3starting at 2:00 p.m. According to the Intuition website, Davis “will provide an overview and behind-the-scenes perspective of the anti-craft beer measures that moved through legislature during the 2014 session.” Davis will also provide information on how craft beer lovers can get involved and support the Florida craft beer industry.

If you wish to express your opinion on SB 1714 you may write your state senator. To find the address of your senator, go to the senate website at: http://www.flsenate.gov/about/contact.

You may also contact Mitch Rubin at the Florida Beer Wholesalers Association at:

Florida Beer Wholesalers Association
215 South Monroe Street, Suite 340
Tallahassee, FL 32301
(850) 224-2337

WJXT story on SB1714

 
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Posted by on April 25, 2014 in Beer Industry

 

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Big beer vs. craft beer, a David and Goliath story

BA_logoThe Brewers Association, a non-profit organization that acts as an advocate for small brewers and brewing enthusiasts, fired shots across the bow of the mega beer producers of the nation yesterday, December 12. Charlie Papazian, president of the organization along with Bob Pease, the groups COO, and Dan Kopman who serves as a member of the Brewers Association Government Affairs Committee and is CEO of Schlafly Beer in St. Louis, authored an opinion piece that ran in yesterday’s St. Louis Post-Dispatch. While on the same day, the Brewers Association website published a similar piece.

The articles call out the likes of SABMiller, A-B InBev, and Heineken for jumping on board the craft beer band wagon and producing brews like Shock Top and Blue Moon. The op-ed says, “…they don’t label these faux-craft beers as products of A-B InBev and MillerCoors

In the article on the Brewer Association’s website, it is said, “The large, multinational brewers appear to be deliberately attempting to blur the lines between their crafty, craft-like beers and true craft beers from today’s small and independent brewers.”

Papazian has long been known as an advocate for small, craft beer producers. In 1978 he founded the American Homebrewers Association as an education and advocacy group for home beer-making enthusiasts. His group later merged with the Brewers Association and he became president. The group is well-known for its very visible festivals such as the Great American Beer Festival and Savour as well as its lobbying activities on behalf of small brewers.

In an article on the beer news website Beer Pulse, Tom Cardella, president and CEO of Tenth and Blake Beer Company, which markets brands like Blue Moon, Leinenkugel’s and Crispin Cider, responded:

“Anyone who visits Jacob Leinenkugel Brewing Company in Chippewa Falls, Wisconsin will understand the blood, sweat and tears that went into building that brewery, and they’ve continued brewing amazing beers for 145 years. And anyone who spends time chatting with Blue Moon Brewing Company founder and brew master Keith Villa will understand the passion and creativity that has gone into developing his Artfully Crafted beers for 17 years. To question the quality of these beers due to their size or success is doing a disservice to the entrepreneurs who created them, and to beer drinkers who love them. Most beer drinkers don’t get hung up on industry definitions, which often change. They just enjoy drinking great beer. Whether people call them craft or some other title is fine with us. We’ll just keep brewing great beer.”

Even Fortune magazine has taken notice of the actions of the big brewers. In an article that ran on their website November 15, the magazine says, “What’s noteworthy about these forays into the craft segment is the way these brands are purposely distanced from their Big Beer parents. You won’t find the Coors name on a bottle of Blue Moon. Rather, you see the name Blue Moon Brewing Company. The same goes for a bottle of Anheuser-Busch‘s Shock Top.”

To many, the actions of the large beer producers are signs that they are worried about the future of their brands. Indeed, over the past few years brands seminal brands like Budweiser and Coors have seen significant drops in their sales and market share. Research released by the Brewers Association shows that the overall beer industry was down 1.3 percent by volume and domestic non-craft was down 5 million barrels in 2011.

At the same time as the large American lagers have been seeing declines, the craft industry is experiencing unprecedented growth. Craft beer grew by 13% in 2011 and by an additional 12% in the first half of 2012.

A craft brewer, as defined by the Brewers Association, is a brewery that produces less than 6 million barrels of beer per year and is less than 25% owned by a national or multi-national adult beverage company. Meaning that brands such as Sierra Nevada, which produced approximately 724,000 barrels of brew in 2011, and Samuel Adams maker Boston Beer Company, which produced approximately 1.9 million barrels are considered craft breweries. By comparison, Anheuser-Busch produced a staggering 340 million barrels of beer last year.

The battle of David and Goliath between the big brands and craft breweries was made even more apparent in 2011 when a bill passed in Texas allowing small breweries to sell beer directly to consumers who toured their facilities. An article in the Houston Chronicle tells of A-B executive Mark Bordas appearing before the Texas senate committee that the bill discriminates against his company because it is tailored to breweries producing fewer than 75,000 barrels per year. Because of this, it appears that AB InBev is very concerned about the competition even the smallest of brewers introduces in the market.

Add to this that the major producers have been busily snapping up smaller breweries, and it is very apparent that craft beer is a force that big business wants to control. Just last year, AB InBev purchased popular Midwest producer Goose Island and has been rolling the brand out nationally. Other brands that have been folded into the big boys include Henry Weinhard, as well as large stakes in Red Hook, Kona, and Widmer Brothers.

In an interview with Bloomberg Businessweek Kopman said that all brewers should label their products so consumers aren’t mislead about a beer’s origin. “We definitely need to discuss this as an industry,” he said. “We need to have an agreed-upon standard for transparency where you are a multinational or an independent.”

And that is the true contention between the craft beer industry and the large producers. The mass producers seem to be trying to masquerade as craft brewers while the true craft brewers struggle to scratch out an existence among the heavily marketed and financed big boys. The Brewers Association ended their article by simply asking that beer-drinkers educate themselves on the beer they are drinking.

Keep up to date on all the beer happenings and news going on in town at the ALL NEW www.JaxBeerGuy.com.

 
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Posted by on December 14, 2012 in Beer, Beer News

 

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