Peter Schorsch
The restaurant and bar industry isn’t for the faint of heart, and a local bill advancing through the House could make staying afloat that much harder for some Broward County establishments.
HB 4039, sponsored by Rep. Chip LaMarca, would provide an exemption to the state’s three-tier alcohol distribution system within the Sunrise Entertainment District in Broward.
The Legislature typically votes in line with an area’s delegation on local bills, and for good reason — time is limited, so getting into the weeds on a hyperlocal issue would be a disservice to the millions of Floridians who will never feel an impact either way.
But while HB 4039 is limited to Broward County now, it runs afoul of another, far more important, norm: Don’t pick winners and losers.
So, into the weeds we go.
Florida’s three-tier system splits the alcoholic beverage industry into separate silos — manufacturers make beverages, distributors sell them wholesale, and vendors sell them to consumers.
The system isn’t unique, with most U.S. states enacting similar rules post-Prohibition. Although there have been exceptions and carve-outs over the past century, it remains the standard in all but one state (for the curious, it’s Washington).
While imperfect, the three-tier system effectively squashed some of the seedy practices that were commonplace during the bootlegging era. Most relevant to HB 4039, the three-tier system prevents brands from moneyhatting their way into exclusive arrangements with retailers and venues. It also blocks preferential treatment, such as a supplier or distributor building a bar inside a favored restaurant or paying for renovations at a favored retailer, including civic centers and sports venues.
Years ago, the Legislature gave Broward County three alcohol licenses, and the logic behind it tracks. It applied to what were, at the time, three publicly owned venues, and it was intended to save local taxpayers money by sparing them from paying the costs associated with obtaining licenses on the open market — costs borne by all private-sector businesses in the industry.
Were all of that still true, HB 4039 wouldn’t raise any eyebrows, but the situation has changed. Now, all three licenses have been contracted to a single private entity, and if they are afforded the same exemptions, the license holders would be able to seek and accept payments from big-name brands in exchange for exclusivity, locking out competition.
The significant financial benefits for the exclusive concessionaire company that would result from eliminating competition on these properties would put competing venues at a disadvantage and harm consumer choice.
If allowed to continue, the unlevel playing field would jeopardize the livelihoods of the many Floridians who work at competing venues as well as the locked-out distributors and suppliers up the chain. Simply put — your favorite neighborhood haunt would have a hard time pulling in customers when the place next door is being subsidized by the highest bidder.
Setting aside the anti-consumer implications, of which there are many, the exemption violates a plain read of Article III, Section 11 of the Florida Constitution which expressly prohibits local laws granting a privilege to a private corporation. So, add unconstitutional to the mix.
HB 4039 stumbled in its first committee. After it was temporarily postponed, a move that often but not always signals that legislation is flawed, it advanced through the Intergovernmental Affairs Subcommittee on an 11-4 vote.
The bill now heads to the House Industries & Professional Activities Subcommittee, which has placed it on the agenda for its April 1 meeting.
