(Corrects spelling of Brewers Association director in paragraph
8 from Gatz to Gatza)
By Barbara Liston
ORLANDO, Fla., April 3 Beer fans line up every
winter at Intuition Ale Works in north Florida for the annual
tapping of Underdark, a world-class dark brew aged for a year in
bourbon barrels that sells out quickly even at $15 a bottle.
Ben Davis, who owns the four-year-old local craft brewery in
Jacksonville, counts on Underdark's two-day spike in revenue to
grow his small business.
But a bill pending in the Florida Senate that would cut into
Underdark's profit has craft beer-makers crying foul.
The law would force craft brewers to sell their bottled and
canned beer directly to a distributor. If they want to sell it
in their own tap rooms, they would then have to buy it back at
what is typically a 30-40 percent mark-up without the bottles or
cans ever leaving the brewery, according to Joshua Aubuchon, a
lawyer and lobbyist for the Florida Brewers Guild.
The rule would not apply to draft beer.
"That to me looks like racketeering," Aubuchon told Reuters.
While other states nurture craft breweries, the smaller
craft brewers say politically influential national distributors
have drawn a line in the sand in Florida to slow the growing
popularity of independents who offer an alternative to the
standard American light lager fare.
U.S. craft brew sales grew 18 percent by volume in 2013,
while overall beer sales dropped about 2 percent, according to
the national Brewers Association, which defines craft breweries
as those producing under 6 million barrels annually.
Still, the craft industry remains small, accounting for
about 8 percent of all beer sold nationally but as high as 20
percent in craft brew-friendly Oregon and in the double digits
in states like Colorado, California and Washington, said Brewers
Association director Paul Gatza.
In Florida, where craft brewers say their market share
remains under 6 percent and most breweries produce under 3,000
barrels annually, the small beer makers are out-gunned in the
legislature, where influential politicians have vowed loyalty to
the national distributors.
Mitch Rubin, lobbyist for the distributors' Florida Beer
Wholesalers Association, told Reuters their goal is to re-write
the state's rules governing the craft brewing industry to create
strict lines between manufacturers, distributors and retailers,
which he said would preserve competition.
Craft brewers say the distributors' clout has resulted in
odd regulation in Florida, including a ban on the use of
64-ounce (half gallon) "growlers," which are reusable jugs that
can be filled directly from a beer tap and sealed for sales
Florida allows the use of quart and gallon growlers, but the
64-ounce size is the most popular in 47 other states where it is
legal. Craft brewers are trying for a fourth straight year to
overturn the ban.
"It's not going to be that big of a deal (to distributors),"
said Joe Redner, owner of Tampa's Cigar City Brewing. "But their
response is always to come over the top with a nuclear option."
The result was a Senate bill filed without a named sponsor
that permits 64-ounce growlers but forces direct sales of all
bottles and cans to a distributor, Aubuchon said.
The bill passed its first committee hurdle last week by 10-0
By contrast, the Brewers Association counts 37 craft
brew-friendly states - Texas and Michigan most recently - that
permit beer makers to distribute their own beer under various
"What it's doing is it's allowing all these new breweries to
pop up. We're seeing more than a brewery opening per day," the
Association's Gatza said.
(Editing by David Adams)