STORAGE NAME: h0499.IPA
DATE: 3/27/2025
1
FLORIDA HOUSE OF REPRESENTATIVES
BILL ANALYSIS
This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent.
BILL #: CS/HB 499
TITLE: Malt Beverages
SPONSOR(S): Yeager
COMPANION BILL: SB 1818 (Collins)
LINKED BILLS: None
RELATED BILLS: None
Committee References
Industries & Professional Activities
13 Y, 2 N
SUMMARY
Effect of the Bill:
The bill allows malt beverage manufacturers who produce less than 31,000 gallons per year to sell and deliver their
malt beverages directly to vendors. The bill also allows malt beverage manufacturers, who produce less than
31,000 gallons a year to end contracts with distributors under certain conditions.
Fiscal or Economic Impact:
The bill may have a positive fiscal and economic impact for malt beverage manufacturers who produce less than
31,000 gallons per year by allowing them to sell directly to vendors and to end their distribution agreements
within a certain time-period.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
ANALYSIS
EFFECT OF THE BILL:
The bill creates an exception to the “three-tiered system” by allowing malt beverage manufacturers, who produce
less than 31,000 gallons in a calendar year, to sell and deliver their malt beverages directly to vendors. (Section 1)
The bill allows malt beverage manufacturers to terminate, cancel, not renew, or discontinue a distribution
agreement without paying reasonable compensation to the distributor, if the manufacturer:
Produced less than 31,000 gallons of beer in the 12-months prior to entering the agreement;
Provides written notice to the distributor at least 24 months before the termination, cancellation,
nonrenewal, or discontinuance of the distribution agreement; and
Provides the written notice to the distributor not less than 36 months after the effective date of the
agreement, but not more than 38 months after the effective date. (Section 2)
This applies to all distributor and malt beverage manufacturer distribution agreements entered into on or after
July 1, 2025, and may not be waived by any party. (Section 2)
The bill allows a malt beverage manufacturer to request the Division of Alcoholic Beverages and Tobacco
(Division) within the Department of Business and Professional Regulation (DBPR) to certify in writing how much
beer the manufacturer produced in a 12-month period. (Section 2)
The division’s certification is effective for three (3) years and is prima facie evidence of the amount of beer
produced by the manufacturer. A manufacturer may only make one request in any 12-month period. (Section 2)
The bill provides an effective date of July 1, 2025. (Section 4)
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
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RULEMAKING:
The bill authorizes DBPR to adopt rules for malt beverage manufacturers to request written certification of the
amount of beer they produced in a 12-month period.
Lawmaking is a legislative power; however, the Legislature may delegate a portion of such power to executive
branch agencies to create rules that have the force of law. To exercise this delegated power, an agency must
have a grant of rulemaking authority and a law to implement.
RELEVANT INFORMATION
SUBJECT OVERVIEW:
Malt Beverages
In Florida, the Beverage Law
1 regulates the manufacture, distribution, and sale of wine, beer, and liquor by
manufacturers, distributors, and vendors. The Division enforces the Beverage Law.
2
“Alcoholic beverages” are defined in s. 561.01, F.S., as “distilled spirits and all beverages containing one-half of 1
percent or more alcohol by volume.”
“Malt beverages” are brewed alcoholic beverages containing malt. Beer is a brewed beverage that meets the federal
definition in 27 C.F.R. s. 25.11 and contains less than 6 percent alcohol by volume. The terms “beer” and “malt
beverage” have the same meaning in the Beverage Law.
3
Section 561.14, F.S., specifies license and registration classifications used in the Beverage Law:
“Manufacturers” are those “licensed to manufacture alcoholic beverages and distribute the same at
wholesale to licensed distributors and to no one else within the state, unless authorized by statute.”
“Distributors” are those “licensed to sell and distribute alcoholic beverages at wholesale to persons who are
licensed to sell alcoholic beverages.”
“Importers” are those licensed to sell, or to cause to be sold, shipped, and invoiced, alcoholic beverages to
licensed manufacturers or licensed distributors, and to no one else in this state.
4
“Vendors” are those “licensed to sell alcoholic beverages at retail only” and may not “purchase or acquire in
any manner for the purpose of resale any alcoholic beverages from any person not licensed as a vendor,
manufacturer, bottler, or distributor under the Beverage Law.”
Malt Beverage Manufacturers
According to DBPR, there are 365 malt beverage manufacturers in Florida. Of those 365 manufacturers, 283
manufacturers brewed less than 31,000 gallons of malt beverages in 2024. The top ten malt beverage
manufacturers combined brewed over 330 million gallons of malt beverages in 2024, with the number one
manufacturer brewing over 286 million gallons.
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Three-Tier System and Tied House Evil
Since the repeal of Prohibition in 1933, regulation of alcohol in the United States has traditionally been based upon
what is termed the “three-tier system.” The system requires separation of the manufacture, distribution, and retail
1
Section 561.01(6), F.S., provides that the “The Beverage Law” means chs. 561, 562, 563, 564, 565, 567, and 568, F.S.
2
S. 561.02, F.S.
3
S. 563.01, F.S.
4
S. 561.01(5), F.S.
5
Email from Chris Kingry, Deputy Legislative Affairs Director, Department of Business and Professional Regulation, Info
Request (March 17, 2025). JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
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sale of alcoholic beverages. The manufacturer creates the beverages, and the distributor obtains the beverages
from the manufacturer to deliver to the vendor. The vendor makes the ultimate sale to the consumer.
6
Generally, only licensed vendors are permitted to sell alcoholic beverages directly to consumers at retail, and
manufacturers, distributors, and exporters
7 are generally prohibited from holding a vendor’s license.
8
Manufacturers, distributors, and vendors are generally prohibited from being licensed or having an interest in
more than one tier. Limited exceptions exist, subject to certain conditions, such as the ability for a malt beverage
manufacturer to hold a vendor’s license, a restaurant to hold a manufacturer’s license (brew pub), and a winery to
hold up to three vendor’s licenses.
9
The three-tier system is rooted in the perceived evils of the “tied house” in which a bar is owned or operated by a
manufacturer or the manufacturer exercises undue influence over the retail vendor.
10
Florida’s “Tied House Evil Law,” s. 561.42, F.S., prohibits a manufacturer or distributor of alcoholic beverages from
having a financial interest, directly or indirectly, in the establishment or business of a licensed vendor, and
prohibits a manufacturer or distributor from giving gifts, loans, property, or rebates to retail vendors.
Exceptions to the Three-Tier System for Malt Beverage Manufacturers
Section 561.221(2), F.S., allows a malt beverage manufacturer to receive up to eight vendor’s licenses for the sale of
alcoholic beverages on property consisting of a single complex that includes a brewery, which may be divided by
no more than one public street or highway. These vendor’s licenses are an exception to the three-tier system
described in ss. 561.14 and 561.22, F.S., and to the tied house evil restrictions in s. 561.42, F.S.
A malt beverage manufacturer with multiple manufacturing licenses may transfer the malt beverages that it
produces between its breweries, up to 100 percent of the yearly production of the receiving brewery. Alcoholic
beverages that the malt beverage does not make must be obtained through a distributor, an importer, sales agent,
or broker.
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Business Relations between Distributors and Malt Beverage Manufacturers (Franchise Law)
Section 563.022, F.S., governs the relationship between malt beverage manufacturers and their distributors. Malt
Beverage manufacturers are required
12 to enter into a “beer distribution agreement” or “franchise agreement” with
a distributor to sell their product in this state. The agreement must be in writing and conform to statutory
requirements.
13
The Franchise Law specifies that distributors, but not manufacturers, are prohibited from waiving any of the rights
granted to them under the Franchise Law.
14
Under the Franchise Law, a manufacturer may not terminate cancel, terminate, fail to renew their agreement, or
refuses to consent to the sale of a distributor’s interest in the distributorship without good cause regardless of the
time period specified in the agreement. A malt beverage manufacturer who cancels, terminates, or fails to renew an
6
S. 561.14, F.S.
7
S. 561.01(16), F.S. “Exporter” means any person that sells alcoholic beverages to persons for use outside the state and
includes a ship’s chandler and a duty-free shop
8
S. 561.22(1), F.S.; s. 561.14(3), F.S. However, see the exceptions provided in ss. 561.221 and 565.03, F.S.
9
See s. 561.14(1); s. 561.22, F.S.; s. 561.24, F.S.; 561.42, F.S.; and 563.022(14), F.S.
10
See Andrew Tamayo, What's Brewing in the Old North State: An Analysis of the Beer Distribution Laws Regulating North
Carolina's Craft Breweries, 88 N.C. L. REV. 2198 (2010), http://scholarship.law.unc.edu/nclr/vol88/iss6/6. (last visited March
22, 2025).
11
S. 561.221(2), F.S.
12
S. 563.022(15), F.S. The Franchise Law applies to all written or oral agreements between a manufacturer and beer
distributor in existence on June 4, 1987, as well as agreements entered into or renewed after June 4, 1987.
13
S. 563.022(19), F.S.
14
S. 563.022(13), F.S. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
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agreement without good cause is required to pay reasonable compensation to the distributor for the diminished
value of the distributor’s business.
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“Good cause” exists if:
The distributor fails to comply with a reasonable and material provision of the agreement;
The manufacturer provided written notice to the distributor within 18 months of the failure;
The distributor was given a reasonable opportunity to make a good faith effort to comply with the
agreement; and
The distributor was given 30 days to submit a corrective action plan, and an additional 90 days to cure in
accordance with the plan.
16
A manufacturer also has “good cause” to terminate, upon 15 days’ notice, if the distributor:
Files for bankruptcy, is insolvent, or is otherwise unable to remain in business.
Has their state or federal license revoked for more than 60 days.
Is convicted of a felony, but only if it has an adverse effect on the good will or interest of the
distributor or brewer.
Commits fraudulent conduct on a matter material to the manufacturer.
Intentionally sells the manufacturer’s products outside of their exclusive sales territory.
Fails to pay for products 15 business days after receiving a demand for immediate payment.
Sells, transfers, or assigns their interest in the distributorship without the written consent of the
brewer.
17
The burden is on the manufacturer to show that it has acted in good faith, that the notice requirements have been
complied with, and there was good cause for the termination, cancellation, nonrenewal, or discontinuance.
18
If a manufacturer sells or transfers their interest in the brewery, their successor is also bound by the terms and
conditions of the distribution agreement.
19 The Franchise Law allows a manufacturer to get out of a distribution
agreement if they go out of business or stop making the products covered by the agreement, upon not less than 30
days’ prior written notice.
20
In the event of a dispute arising under the Franchise Law, the prevailing party is entitled to recover costs and
attorney fees.
21
BILL HISTORY
COMMITTEE REFERENCE ACTION DATE
STAFF
DIRECTOR/
POLICY CHIEF
ANALYSIS
PREPARED BY
Industries & Professional Activities
Subcommittee
13 Y, 2 N 3/26/2025 Anstead Brackett
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S. 563.022(5)(b) and (17), F.S.
16
S. 563.022(7), F.S.
17
S. 563.022(10), F.S.
18
S. 563.022(8), F.S.
19
S. 563.022(16), F.S.
20
S. 563.022(11), F.S.
21
S. 563.022(18)(c), F.S. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
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