For the Florida beer industry, all eyes are on the legislature, where the clock is ticking, with four days left of the session. The still-in-the-works contentious Senate Bill 1714 would make drastic changes to the state’s distribution system, limiting brewers’ ability to sell their own beer and putting more power in the hands of distributors. We could report on the details of the bill, but our fellow beer lawyers down in Florida at BrewerLong have done a phenomenal job of keeping those in and out of Florida up-to-date on just what’s happening in the legislature. Indeed, they immediately reported on a late-night change last night that removed much of the most contentious provisions in the bill. A vote in the Senate is expected today, and if the bill passes there, it’s got to get through the House of Representatives before legislators close up shop for 2014. If you’re interested in what’s happening in Florida, stay tuned to BrewerLong’s coverage here.
As beer lawyers and beer fanatics, the development of the beer industry in every state, including its maybe-inherent politics, is all downright fascinating to follow. That’s why we wanted to be sure, today, to pass along one recent, insightful look at SB1714 from someone who sees a lot at stake for the business he’s work hard to build. In an impassioned press release, Cigar City founder and CEO Joey Redner breaks down the potential motives behind the bill (at least in its iteration before yesterday’s late-night changes), discusses the three-tier distribution system, and shares his thoughts about brewer-distributor relationships. It’s worth a read. See a short excerpt below, and head over to the Cigar City website for the full text:
“And the vast majority of states allow direct retail sales by breweries like those currently allowed under Florida law. Most without limit. Yet in all of these states private distributors still exist. In fact, many of the largest distributors are located in states with self-distribution. How can that be?
Well, the first reason is that distribution is a tough business. Like brewing, distributing beer is capital-intensive, heavily regulated, and requires managing a dizzying array of moving parts. As with anything that is difficult to do, those that can do it well add value to the system. A good distributor that can get beer to market more efficiently and with less overhead provides value to breweries and to consumers.
Fun fact: Most breweries, even in states where self-distribution is an option, ultimately choose to work with a distributor. Not because the government tells them to, but because it is a mutually beneficial business relationship. In the case of Cigar City Brewing, you couldn’t pry me away from my distributor with a crowbar! They do a phenomenal job representing Cigar City and through their hard work they bring value back to the brewery.
Those are the kinds of relationships government should foster; mutually beneficial partnerships, not government mandated servitude.”