Sen. Kelli Stargel: Amendment designed to find common ground in beer battle

Senate Bill 1714 has come under heavy scrutiny from the media, public and most ardently, craft brewers.  Today, I want to set the record straight, as there is a small, but vocal faction of the beer industry that has clouded this issue by promulgating misinformation.

First, I want to establish that I am, and always will be, a small government Republican.  I arrived at this public policy decision skeptical of government regulation.  It’s clear the three-tier system instituted after Prohibition – brewers, distributors, retailers — must be preserved to prevent:

1) predatory practices that would eliminate competition

2) opaque or illicit distribution channels

3) tax evasion,

4) over-promotion

5) excessive consumption.

Why is the three-tier system necessary in the 21st Century?  It is the backbone of societal protections against rampant alcoholism of the 1920s.

When beer was deregulated in the 1970s, we again experienced the effects of undercutting the three-tier system.  It has been pointed out in news reports that states where beer is unregulated, the per capita production is significantly higher. Higher beer production and higher consumption go hand-in-hand.

As a social conservative, this is why I believe we need to keep regulations on alcoholic beverages in place and not have unregulated beer widely available in the marketplace. I believe that social issues greatly impact economic issues and we must seek a balance.

As this bill has progressed, I have continued to meet with stakeholders across the industry to ensure the rights and interests of all Floridians are protected.  To that end, I filed an amendment that represents two important changes in an attempt to find common ground.

With the recently filed amendment, the bill would authorize small breweries — under 2,000 kegs in production — to sell all of their beer either by draft, in growlers or in sealed containers to go with no come-to-rest requirements.  In addition, it would authorize breweries to sell up to 20 percent of their annual on-site production in sealed containers to go.   Further, a consumer can buy up to one keg per day from the brewery.

Most importantly, this legislation will preserve the critical three-tier system, while ensuring that the craft brewery industry is operating legally, not in a grey area.

Currently, craft brewers operate under a tourism exemption.  It allows a brewer (tier one) to sell beer to a customer as a vendor (tier three).  This exemption was originally intended to allow theme parks to sell beer to its park visitors. However, craft breweries have been issued licenses under this exemption, without having to prove their tourism aspect.  Thus, they are operating outside the context of the law.

SB 1714 addresses this ambiguity by eliminating the tourism requirement.

Now, allow me to state clearly what Senate Bill 1714 does NOT do.

This bill will not put craft breweries out of business.  It simply protects the three-tier system and ensures they are operating within the law.

This bill does not seek to protect only distributors.  It seeks to protect all industry partners, from the manufacturer to the distributor to the retailer.  Without proper regulation and without separating the manufacturer from the retailer, history has taught us that trouble often follows.

This bill does not institute a tariff on craft breweries, as some have suggested. The claim that a craft brewery would have to pay a “tariff” on their own beer that never leaves their premise is baseless.

The bottom line is the three-tier system provides the proper legal protections for the manufacturing and consumption of alcoholic beverages in our state.  The tiers must remain separate, similar to the three branches of government.

It does not undermine craft breweries. In fact, it creates a regulatory framework in which the operation of craft breweries is legal and can continue to grow, while providing a safeguard for our three-tier system.

I am proud of the hard work, innovation, and entrepreneurial spirit of our Florida craft breweries and I invite any of them to share with me their thoughts and concerns in a professional and respectful manner as it relates to Senate Bill 1714 and the recently filed amendment.

Florida Sen. Kelli Stargel represents Senate District 15. Column courtesy of Context Florida.