SB-388: Tied House Exception

SB 388 by Hutson & HB 423 by LaRosa

Tied House Evil Exception for “Financial Transactions”

Current Situation. The tied house evil law, section 561.42, prohibits “financial assistance” to retailers by breweries and distributors.  It is called the “tied-house evil” law because it prevents the “evils” associated with retailers being “tied,” or obligated, to a brewery.

Along with the three-tier requirement, the tied house evil law provides the foundation of the regulatory system. It prevents “slotting fees” – the purchase of shelf space in grocery and convenience stores and draught taps in restaurants and bars.

This prohibition against financial assistance fosters consumer choice at retail by preventing big breweries from paying for space and excluding others.

Consequences of Proposal. The bill would destroy Florida’s tied house law with an innocent looking exception for “arms length financial transactions for fair market value” between breweries and retailers.

The bill would destroy small breweries’ access to retail by creating a “pay to play” environment controlled by industry members with the deepest pockets.

Major breweries could “box out” their distributors’ other brands, preventing distributors from doing what they are contracted to do.

Enforcement would be impossible because the law would authorize the payment. The DABT could never prove that the payment was not a “slotting fee.”

The proposal is anti-competitive against craft breweries and reduces consumer choice.

The proposal would transform Florida’s open system of competition and access to market to a system based on “pay to play” favoring deep pockets.

Opponents:

Beer Industry of Florida

Florida Beer Wholesalers Association

Anheuser-Busch InBev

MillerCoors Brewing Company

Wine & Spirits Distributors of Florida