By Matt Kelly
This legislative session, Florida lawmakers are considering reforms that would revamp many of the state’s regulations on alcohol. A measure to legalize a popular beer container size, the 64 oz. growler, has sparked a debate over the larger issue of the three-tier beer regulation system. Powerful special interests have complicated every step in the process, with distributors and craft brewers battling it out to secure an advantage. As the leading sector of the beer industry, craft beer should be allowed to prosper without regulatory restrictions. Recent developments in the legislature indicate that craft beer is indeed winning the battle.
Specialty breweries have revitalized the beer industry and provided customers with far greater choice. While overall beer sales fell 1.9% nationally last year, craft beer sales grew 17.2%. Apparently, customers like the variety that craft beer affords, and are voting with their wallets.
The overall economic impact of Florida’s craft beer industry is still small compared to that of Oregon, Colorado, and California, where hundreds of craft brewers produce millions of barrels annually. Yet recent growth has been significant. A 2014 study by economist Timothy Taylor and his colleagues at the University of Florida found that the number of craft breweries in Florida expanded from just six to more than 50 between 2007 and 2013. The authors say the industry’s potential is still greater. They project a statewide capacity of 550 microbreweries in coming years, generating $2.5 billion in sales revenue and as many as 40,000 jobs.
An important catalyst to the national rise of craft beer has been the relaxation of the three-tier regulatory system of beer regulation. Many states have established a self-distribution exemption for small brewers who produce less than a certain volume annually. Rep. Greg Steube, R-Sarasota has said that Florida’s uncompetitive regulations are largely responsible for the lag in economic impact.
Ambiguities with the state’s allowance for breweries to sell their beer on their premises in “taprooms” instigated a lawsuit earlier this year. Distributors and retailers intended to shut down these brewery-operated taprooms, but the case was later dropped.
Florida’s ban on the growler, however, has been the chief hindrance to craft beer’s growth. Any alcoholic beverage container size up to 32 ounces and more than 128 ounces is permissible, but increments in between are strictly outlawed. Sellers can be slapped with a second-degree misdemeanor for violating this requirement.
But why is the growler so important to craft beer? Bottling and canning can be prohibitively expensive for small brewers, so the use of refillable 64 oz. growlers has allowed them to avoid this added marginal cost. Bart Watson, an economist with the Brewers Association, has said the cost-effective container has been essential to craft beer’s explosion in popularity.
Outlawing this popular container size in Florida has hindered a fledgling industry that’s flourishing across the country. However, the Florida legislature could soon change that. Senator Latvala’s (R- Clearwater) bill, SB 186, which would legalize growlers and clarify the rules on taprooms in the state, has passed the Senate and awaits a vote in the House.
If Florida wants to be a business-friendly state, it should have policies that make it easier for entrepreneurs to innovate and serve their customers. Ending the growler ban would do just that, paving the way for further economic growth in craft beer.