Beer brewers and distributors at odds over growler legislation

Craft beer is booming, but will the political machinations of industry heavyweights flatten the market?

Posted by Mitch Perry on Thu, Jan 16, 2014 at 2:40 PM

FILLING STATION: Bartender Don Arscott fills 32-oz. and 128-oz. (1 gallon) containers at Cigar City Tasting Room’s growler bar.
  • Chip Weiner
  • FILLING STATION: Bartender Don Arscott fills 32-oz. and 128-oz. (1 gallon) containers at Cigar City Tasting Room’s growler bar.

Florida’s craft brewing scene has flourished in recent years, with new breweries and brewpubs opening up or expanding at a dizzying rate in the Tampa Bay area over the last half-year alone. With that explosive growth, tensions have grown between the burgeoning industry and the Big Beer establishment.

The differences are epitomized by what we’ll call the growler wars.

A growler is a reusable bottle filled at the tap at craft brewers’ tasting rooms, allowing customers to take the beer home with them. The dispute in Florida is about size: 32-ounce growlers are fine in the Sunshine State, but 64-ouncers are banned. Florida is one of only three states in the nation — the others are Texas and Oklahoma — to have such a ban in place. Last year, Clearwater state Senator Jack Latvala introduced a bill that would have made the larger size legal.

The growler wars have been depicted in various publications (including this one) as a fight between the cool, indie-oriented craft brewers and the stuffier beer establishment, represented in Tallahassee by the Florida Beer Wholesalers Association, an association of 25 independent distributors. Not only did that group oppose the growlers, it also helped shape an amendment to Latvala’s straightforward bill that would have severely slowed the growth of tasting rooms, restricting take-home sales to only the smallest of startup breweries. That amendment died in committee, as did the original bill to allow 64-ounce growlers.

Naturally this created some negative feelings among the craft beer contingent toward the FBWA.
But last month, during an interview at Largo-based Great Bay Distributors, FBWA Executive Director Mitch Rubin made the surprising assertion that, contrary to popular opinion, his organization actually is not against the 64-ounce growler. Seated around a large conference table with several officials from Great Bay, which distributes beer to Pinellas, West Pasco, Hernando and Citrus counties, Rubin said their sole focus now is not on growlers, but on preventing craft brewery tasting rooms from selling beer not brewed on their premises.
“Look, part of our problem last year in our opposition is we had to look like a bunch of doofuses arguing against a 64-ounce container because we can’t tell the world that the law is unclear,” Rubin says.

He went on to say that for strategic and tactical reasons his association “had to be” opposed to the 64-ounce growler, but that his concerns are more existential — that craft breweries are selling products other than their own homegrown brews via so-called “guest taps,” which are anathema to the FBWA. Because to Rubin, that means those establishments are now retailers instead of just brewers, wreaking havoc on the three-tier system.

Let’s stop right there. Unless you’re in the industry, you might not know what the three-tier system is, so let’s review:

The three-tier system was created by the federal government post-Prohibition. It established that brewers would have to go through a distributor to get their product to retailers in order to ensure orderly market conditions, as well as promote temperance and raise money through taxes.

There have always been exceptions, of course, and the biggest one in Florida law has been the so-called Busch Gardens exception. Established in 1963, it allowed the Tampa theme park to sell its Anheuser-Busch beer on the park’s premises.

And that exception paved the way for tasting rooms to exist.

But while that horse may be out of the barn, Rubin and friends are adamant that tasting rooms should serve only that particular brewery’s product, and not any other brands.

“We don’t care as long as the beer is brewed on the premises, sanitized and sealed,” says Great Bay’s Ron Petrini about tasting rooms.

“What the breweries are sliding by the media is they just want to change the size and keep what they’re doing in a kind of unregulated fashion, which is selling other manufactured beers from their facilities,” Rubin asserts.

Attorney Josh Aubuchon is executive director of the Florida Brewers Guild, representing the craft brewing industry in Tallahassee. He expressed surprise and disappointment when informed by CL that the FBWA just wants to eliminate guest taps and does not want to contest 64-ounce growlers.

“It would be great in meetings with legislators in discussing this if he would make that known,” he said, referring to Rubin as a “master at disinformation and just throwing a whole bunch of information out there to confuse people.”

Aubuchon thinks the whole dispute about guest taps is “ludicrous,” and says such a provision would infuriate some of his members. But at the same time he says that if that’s Big Beer’s main concern, “that’s easily remedied.”

But Tampa area Representative Dana Young says she thinks Rubin’s arguments are “absurd.” Young is one of the co-sponsors of the 2014 version of the bill that succinctly calls for allowing the filling of any size container, as well as allowing tastings for any malt beverage product. (Currently beer, unlike wine and liquor, cannot be sampled at retail outlets under Florida law.)

“I don’t understand the angle that he’s coming from,” Young says.

Her point is that the distributors still have to deliver the product from one brewery to another. If, say, Cigar City Brewing and Green Bench Brewing wanted to trade kegs of their respective product, they’d have to go through a distributor to do so. (Other distributors in the Tampa Bay area include J.J. Taylor, Pepin Distributing and Brown Distributing Company.) “This is a marketplace we have in place now,” Young says, calling Rubin’s argument a “paper tiger.”

But Scott Dick, a lobbyist for the Retail Beverage Council, says he agrees with Rubin regarding guest taps. “We’re okay with them selling it for un-premised consumption,” he says. “Where we have concerns is that they want to sell other craft beers at their brewery, and when they do that they become more of a retailer and they bypass the current licensing system.”

Joey Redner of Cigar City Brewing in Tampa says that guest taps never represent more than 30 percent of the products in his tap room, and says if the FBWA wanted to set a limit he could probably live with it.

His paramount concern is that there be no legislation going forward against tasting rooms, which he says are the only way for new breweries to become financially viable. “When you’re selling the beer that you made in your tasting room, you’re keeping those extra margins that would have gone into distribution and retail,” he says, recalling the early lean days of his now extremely popular business model.

Redner definitely likes Young’s legislation allowing beer tastings. It would allow production breweries to avoid the expense of building a tasting room but still provide samples to customers.

Another bill proposed this year in the state Senate (sponsored by Sarasota County’s Nancy Detert) would also permit licensed distributors and vendors (but not manufacturers) to conduct beer tastings on licensed premises. Currently only wine and liquor can be offered up for free tastings at retailers.

The fissure regarding growlers has led to the charge that distributors are resentful of the sudden growth of the craft brewing industry, a perception that Rubin and the folks at distributors like Great Bay reject. They emphasize that, although they distribute Anheuser Busch-InBev products, they actually work with over 330 active brands, including many imports and 19 craft brands, such as the brews manufactured by the Tampa Bay Brewing Company and St. Petersburg’s 3 Daughters.

Rubin says that the notion that the distributor is a roadblock to unfettered access is wrongheaded. He also says that the idea of a “middleman” connotes that the distributor takes an unfair cut of the profits. “The economy wouldn’t support him just taking a cut if he wasn’t adding an incredible value.”

But Josh Aubuchon questions the value of distributors in 2014.

“Why it is necessary to do this? Why is this mandatory?” he asks. “It’s necessary in the sense that breweries don’t want to be buying fleets of trucks and delivering beer everywhere, but does it have to be mandatory under the law? Probably not. Will [distributors] still exist if we get rid of these regulations? Absolutely.”

It should be noted that there have been other cracks in the three-tier system façade. In 2011 voters in the state of Washington repealed the system as it applies to wine sales. And an editorial in the Florida Panhandle’s Panama News Herald opined last November that “the laws are stifling small businesses and innovation and denying consumers what they want, without serving any compelling government interest.”

EASY AS ABC: Shift manager Stacey Todd seals and labels a growler at ABC Fine Wine & Spirits in Tampa.
  • Chip Weiner
  • EASY AS ABC: Shift manager Stacey Todd seals and labels a growler at ABC Fine Wine & Spirits in Tampa.

In the past year, ABC Fine Wine & Spirits has begun selling 32-ounce growlers in four locations, including at its Tampa store on West Kennedy Blvd. Spokesperson Lorena Streeter says that ABC supports 64-ounce growlers, and will sell them if they’re legalized.

“It’s a terrific way to reach out to the craft beer community and engage them because a lot of times the beer that is sold via the growler is not sold in other packages,” she says.

Whatever happens in Florida, the national craft beer trend shows no signs of abating. According to a new analysis by the Brewers Association — the not-for-profit trade association that represents the majority of U.S. breweries — small and independent American craft brewers contributed $33.9 billion to the U.S. economy in 2012. The report also states that craft beer volume grew 15 percent in 2012 and sales grew 17 percent. Craft brewers accounted for 6.5 percent of the total U.S. beer market in 2012, up from 5.7 percent in 2011.

As our region’s craft beer industry continues to grow in national stature (most recently via a story about St. Petersburg in Sunday’s New York Times travel section), that can only mean plenty more beer aficionados will be lining up to fill their growlers.

NOTE: An earlier version of this story incorrectly listed Joe Bardi as the author. The byline has been corrected.

Comments (3)

Showing 1-3 of 3

32oz growler + 32oz growler = 64oz of beer
64oz growlers = illegal
32oz growlers = legal
Boy, we have some stupid laws in this country.

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Posted by Andy Warrener on 01/16/2014 at 3:29 PM

I think it's great that our elected officials are so interested in this market. Whoever said there's no economic opportunity in Tampa?! Just think of all the downstream effect- more body shop work for wrecked cars, more work for lawyers to get their kids off when they occasionally do get stopped for being blind drunk, medical costs associated with alcohol's (few) adverse effects, not to mention hospital bills, and of course all that increase in productivity that alcohol brings to the table.

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Posted by Terre Tulsiak on 01/17/2014 at 7:47 PM

32oz growler + 32oz growler = 64oz of beer
damn you beat me to it

it all sounds like NYC ex-dictator mayor banning large fountain drinks

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Posted by pltctytc on 01/19/2014 at 5:31 AM
Showing 1-3 of 3

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