State Distribution Laws
Florida
License Needed to Self-Distribute: No
Statute: Fla. Stat. § 563.022
Florida does not permit brewers to self-distribute their beer to retailers.
Florida also requires brewers to enter into written distribution agreements with their wholesalers and assign them exclusive territories. These agreements must also be filed with the state, though it is the responsibility of the wholesaler to file them.
There are also many provisions that restrict what brewers can include in their distribution agreements. Among other things, brewers are not allowed to:
- establish resale prices for their wholesalers
- force wholesalers to accept beer they haven’t ordered
- delay or refuse to deliver of reasonable quantities of beer ordered by a wholesaler
- terminate or not renew the distribution agreement without good cause
- discriminate in prices offered to different wholesalers
- unreasonably withhold or delay their consent to a transfer of ownership in one of their wholesalers
- restrict free association amongst wholesalers
- change a wholesaler’s quota in bad faith, or
- require their wholesalers to participate in a national advertising fund
In order to cancel or not renew a distribution agreement, a brewer must have good cause for doing so, and provide the wholesaler with adequate notice. Good cause is established when a wholesaler failed to comply with a reasonable and materially significant provision of the distribution agreement. The brewer must also give the wholesaler 30 days to come up with a plan to fix the problem, and an additional 90 days after that to actually fix it. The problem also must have come to the brewer’s attention within the past 18 months (i.e. you can’t sit on the issue and raise it later). If a brewer terminates or does not renew a distribution agreement without good cause, the brewer must pay the wholesaler reasonable compensation for the diminished value of the wholesaler’s business.
Any notice of termination or nonrenewal provided by a brewer must be given to the wholesaler at least 90 days before the termination or nonrenewal date, and include:
i) a statement of the brewer’s intent to terminate or not renew the agreement;
ii) its reasons for doing so; and
iii) the date the termination or nonrenewal will take effect.
Brewers are allowed to terminate a distribution agreement upon 15 days’ written notice, if:
1) the wholesaler fails to pay the brewer within 15 business days of receiving a demand for payment;
2) the wholesaler declares bankruptcy, dissolution, insolvency, or assignment to benefit of creditors;
3) the wholesaler’s license to sell products is revoked for more than 60 days;
4) if a 10% or more owner of the wholesaler is convicted of a felony and fails to sell his or her shares within 15 days of conviction;
5) the wholesaler transfers its business without obtaining prior approval from the brewer;
6) the wholesaler engaged in fraudulent conduct in its dealings with the brewer; or
7) the wholesaler intentionally sells outside of its designated territory.
If the brewer discontinues distributing its brands in the state, it can terminate all of its distribution agreements with Florida wholesalers on 30 days’ notice. If a brewer terminates a distribution agreement for any reason, the brewer may have to buy back its inventory from the wholesaler (though if the wholesaler owes debts to the brewer, this can be used to offset them) and pay any associated shipping costs.
