Wednesday, April 23, 2014

Tears for Beer

Here we go again. It was not that long ago that we wrote about Crony Beer.  Now that the Florida legislation is in session, the legislators and big beer distributors yet again are hard at work to extract rents from craft brewers.  This time, they're getting closer to protecting their business and restrict your choice for beer.
Craft brewers lost another skirmish with the established beer industry on Monday.
The Senate Rules Committee backed a bill (SB 1714) in a 9-4 vote that would require the smaller brewers to buy back their bottled products to sell on premises once the breweries reach a certain size.
Is there any other business forced to buy back its own product from a third party adding no value to sell it to willing consumers?

It looks like the craft brewers, trying to use common sense, walked right into a trap set up for them by the crony legislator and big beer.  Florida has actual laws on the books that regulate the size of containers that craft brewers may sell on premise.  They may sell a 32 oz. container.  The may sell a 128 oz. container.  But never, ever sell a 64 oz. "growler".  The law will be after you like the Bureau of Land Management chasing cattle and saving tortoises.

One of these bottles is illegal in Florida
The craft brewers, seeking to sell "growlers", got what they wanted ... and something extra.
In the latest version of the bill, craft brewers could sell bottled, canned and kegged beer at their breweries, as long as they did not manufacture 2,000 kegs or more per year. Additionally, all craft brewers would be able to sell their products on tap and in 64-ounce growlers.
If they exceeded 2,000 kegs, the brewers would have to sell their bottled and canned products to distributors and then buy them back if they wanted to sell them on premises.
However, the bill did eliminate a controversial provision that would pay the distributors even though the bottled beer was never moved from the craft brewery.
The bill also would prohibit craft brewers from transferring their beer from one brewery to another for sales.
The get rid of one arbitrary constraint with the 64 oz. growler, but then trade that for another arbitrary limit of 2000 kegs, after which, the craft brewers must pay rent directly to big beer for the privilege of selling their own beer.

Why not pass a law to pay rent to the craft brewers for any brewer that sells over 1 million kegs a year? Why won't we protect the craft brewer business like we protect big, watered down beer?

They'd rather extract money from craft brewers, kill the growth and job prospects, if not their business, and transfer money to big beer.

The craft brewers are truly small business.  They don't have the big beer money, and have not sought to buy off the politicians to protect their business.
In their testimony, the craft brewers said the 2,000-keg limit was too low and would thwart the industry’s development.
David Doble, a co-owner of the Tampa Bay Brewing Co., said 14,000 kegs was a “break even” point for a brewer, calling the 2,000-keg limit “absolutely nothing.”
He said the legislation was designed to make the smaller craft brewers compete on the same level as a beer giant like Anheuser-Busch, which produces hundreds of millions of kegs per year. And he said it could threaten his company’s plan for a $5 million expansion in Tampa.
“These people are going to crush us,” Doble said. “We’re going to lose a lot.”
What do our state legislators know about craft brewing that they can decide that 2000 kegs is some magic number?

Joey Redner gets it right:
Call it a sobering civics lesson in the power of campaign cash.
"It's classic crony capitalism," said Joey Redner, the founder of Tampa's Cigar City Brewing, after the Rules Committee vote.
Tampa is gaining recognition among craft brew aficionados as a top 5 craft beer destination, including Cigar City, among several others, such as Tampa Bay Brewing Company, Tampa Cold Storage, Barley Mow Brewing Company in Largo, Saint Somewhere Brewing Company in Tarpon Springs, Peg's Cantina & Brew Pub in Gulfport, New World Brewery in Ybor City and Mr. Dunderbak's and Four Green Fields in Tampa.

There are at least 31 local craft brewers in the Tampa Bay area.  It is a nice local success story of small business growing and gaining publicity for the Tampa Bay.

The must be stopped!

At least one local politician gets it right.
After Monday's vote, more than a dozen craft brewer owners and employees from all over the state huddled with an ally in the Florida House: Majority Whip Dana Young, R-Tampa.
"I see the dramatic impact the craft brewing industry has on Florida and the Tampa Bay region," said Young. "I am willing to expose the absurdity of the Senate's punitive bill and fight any attempts to hurt the industry.'' Though Gaetz fast-tracked the bill in the Senate, it has no House companion, meaning that its future depends on end-of-session wrangling between legislative leaders.
"Why would the Senate want to do this?'' Young asked. "It goes against every free market, small business principle we have."
Why? Here's a clue, from the Times:
Sen. President Don Gaetz, R-Niceville, brought attention to this pay-for-play dynamic when he told the Associated Press in March that he didn't object to microbreweries. However, he said, they are an issue to one of his friends, Anheuser-Busch distributor Lewis Bear. Distributors contributed at least $8,000 to Gaetz's 2012 campaign, with Bear kicking in at least $2,000.
Money is his principle. Free markets?  Who cares?

Capitalism is not pro-business.  It is pro-free markets, and pro-consumer.  That includes your beer.

The market for beer is changing thanks to craft brewers.  They are creating a new class of local, freshly brewed beers, and the markets... you and I... are liking what we taste.

Big beer is yesterday's beer.  But they are trying to fight the changes in the markets. They are fighting against you and me, and our choice.

They've found some willing conspirators in the state legislature. The old fashioned way.  Money talks.

This is nothing but the definition of cronyism.


  1. They guys are idiots. Look at the rapid growth of craft breweries . They average something like 14-20% YOY in growth. Craft beer doesn't really even compete with large beer. They are a completely different product.

    Free craft beer. Stop stifling small businesses who are making a great product that every local community embraces.