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Saturday, Oct 25, 2014
Editorials

Editorial: Protecting micro-breweries is good for business

Published:

Tampa’s growing craft beer industry is a post-recession success story deserving of praise and encouragement from a state Legislature run by Republicans who preach free-market principles.

Yet passage of a pending bill that has cleared a key committee and appears headed for a full Senate vote would strike a crushing blow to the entrepreneurs who have staked their personal savings on the industry, creating hundreds of jobs along the way.

Senators should make a statement in support of small-business owners everywhere and reject the provisions in SB 1714 that favor the mega-brewers such as Anheuser-Busch over startups such as Cigar City Brewing and Tampa Bay Brewing Co., both based in Tampa and enjoying phenomenal success.

All the small breweries want is a simple change in state law that would allow them to sell beer on their premises in half-gallon containers called growlers. The growlers are prohibited under the state’s archaic container laws. In fact, only three states outlaw the growlers — Florida, Mississippi and Idaho. Rather than grant that simple change, state lawmakers led by Sen. Kelli Stargel, a Republican from Lakeland, are proposing new restrictions on the microbreweries wanting to sell their product at their facilities.

Stargel’s ploy is an affront to small businesses and the free market.

The proposed law would allow breweries to sell bottles and cans of all sizes, including the half-gallon growlers, on their premises provided they did not manufacture more than 2,000 kegs a year.

Any brewery manufacturing more than that would be forced to sell its product to distributors and then buy it back, most likely at marked-up prices, for resale on their premises.

As Tampa’s brewery owners point out, the 2,000 keg limit is absurd. Tampa Bay Brewing Co.’s owner told lawmakers he needs to sell 14,000 kegs a year to break even. The brewers said the restrictions will hurt their bottom lines, curb expansion and suppress hiring. The restrictions would also protect the large brewers from local competition.

Stargel says the restrictions are meant to ensure an even playing field for all breweries. The megabreweries, which are losing market share to the startups, complain that the smaller competitors are allowed to sell their product in tasting rooms at their facilities without having to first sell to distributors before hitting the retail market. The state’s three-tier system of regulating alcoholic beverages separates the brewers, distributors and retailers and is meant to protect consumers from price fixing. The megabrewers says the small brewers that sell directly to customers on their premises are given an unfair advantage.

But it’s hard to have sympathy for brewers that make millions of kegs a year, and have the political clout to push legislation that protects an outdated system.

Associations backed by the megabrewers are contributing thousands to the re-election campaigns of Stargel and others who will decide the fate of the proposed bill.

Florida’s beer distribution rules need changing. But those changes shouldn’t insulate large brewers from the realities of an evolving market.

Beer drinkers are gravitating to startups that make specialty brews offered fresh on the premises, and that often reflect the community in their names and flavors.

The rules should be changed to encourage that kind of ingenuity, not punish its success.

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