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Alcohol Regulation (FL): Overview

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Alcohol Regulation (FL): Overview Resource ID: w-020-0266 Alcohol Regulation (FL): Overview VALERIE L. HABER, GRAYROBINSON, P.A., WITH PRACTICAL LAW COMMERCIAL TRANSACTIONS Search the Resource ID numbers in blue on Westlaw for more. A Practice Note providing guidance for parties The Florida licensing process and how to maintain a license. considering entering the alcohol beverage Advertising and marketing of alcohol beverages in Florida. business in Florida, particularly at the retail For purposes of this Note, “alcohol” or “alcohol beverages” (often referred to as “alcoholic beverages” under Florida law) includes level. This Note provides an overview of the beverages containing at least one-half of 1% of alcohol by volume, regulatory structure for the manufacturing, such as distilled spirits, wine, beer, and other malt beverage products (§ 561.01(4), Fla. Stat.). It does not include alcohol when it is used distribution, and retail sale of alcohol beverages for non-beverage purposes, such as when ethyl alcohol is used for in Florida; Florida’s three-tier system including industrial purposes, like ethanol fuel. manufacturers, distributors, and retailers; the REGULATORY STRUCTURE AND AGENCIES control versus non-control models states use to In most states, alcohol is regulated at each of the following levels: regulate alcohol beverages; Florida’s tied-house The federal level for manufacturers and distributors (more rules including issues and exceptions; Florida’s commonly referred to as “producers” and “wholesalers”, licensing process including types of licenses, respectively, at the federal level) (see Federal Regulation). The state level (see State Regulation). qualification and disclosure requirements, The local level (see Local Regulation). ongoing maintenance requirements, and license transfers; and an overview of advertising and FEDERAL REGULATION The Federal Alcohol Administration Act (FAA Act) (27 U.S.C. §§ 201 marketing for alcohol beverages in Florida and to 219a): at the federal level. Requires manufacturers, importers, and distributors of alcohol beverages, including distilled spirits, wine, and malt beverages (such as beer), to obtain a permit from the Department of the The production, distribution, and sale of alcohol beverages is heavily Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB) before regulated in Florida. The laws, regulations, rules, and potential issues engaging in business. that must be considered before entering the alcohol business can Provides authority to the TTB to regulate labeling and advertising be difficult to understand. This Note provides parties considering of alcohol beverages. entering the alcohol beverage business, particularly at the retail Prohibits certain trade practices that could give manufacturers level, with an overview and a basic understanding of certain key and distributors of alcohol beverages undue influence over alcohol areas related to alcohol regulation in Florida, including: beverage retailers. The regulatory structure of alcohol regulation in Florida. The FAA Act created what is now commonly referred to as the Florida’s three-tier system. “three-tier system.” This system provides for three independent Where Florida fits within the non-control versus control model of levels for alcohol distribution: the manufacturer tier, the distributor alcohol regulation. tier, and the retailer tier. This system is used in a variety of forms in Tied-house rules and potential issues. most states, including Florida (see Three-Tier System; Practice Note, © 2019 Thomson Reuters. All rights reserved. Alcohol Regulation (FL): Overview Alcohol Regulation: Overview: Three-Tier System (W-019-9723)). zalcohol licenses of similar types; or The intended purpose of the three-tier system is to eliminate zalcohol establishments and places of worship, schools, “tied-houses” (see Tied-House Rules and Exceptions; Practice municipal buildings, or parks. Note, Alcohol Regulation: Overview: Tied-House Regulation (§ 562.45(2)(a), Fla. Stat.) (W-019-9723)). Unless otherwise regulated by local law, no on-premise alcohol STATE REGULATION establishment can be located within 500 feet of the real property Division of Alcoholic Beverages and Tobacco comprising a public or private elementary school, middle school, or secondary school (§ 562.45(2)(a), Fla. Stat.). In Florida, the Florida Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (DABT), is the Sanitary conditions (§ 562.45(2)(a), Fla. Stat.). agency charged with issuing alcohol beverage licenses and regulating Types of entertainment and conduct allowed in an on-premise state alcohol beverage laws (§§ 561.02 and 561.08, Fla. Stat.). alcohol establishment (§ 562.45(2)(b), Fla. Stat.). The DABT is broken out into three bureaus: Florida local law: The Bureau of Licensing, which is responsible for: Cannot prohibit activities or business transactions of a licensee zprocessing alcohol beverage license applications; that are already regulated under Florida Beverage Law. Must treat businesses with alcohol licenses: zissuing and renewing licenses; and z zmaintaining records relating to licenses, including documenting in a nondiscriminatory manner; and ownership and licensed location changes. zconsistent with the treatment of any other lawful business in The Bureau of Auditing, which is responsible for: the state. zensuring that licensees comply with reporting and tax payment (§ 562.45(2)(c), Fla. Stat.) requirements; and zcollecting and auditing taxes, surcharges, and fees paid by THREE-TIER SYSTEM licensees. Florida Beverage Law classifies licensees in three distinct categories, The Bureau of Law Enforcement, which is responsible for: in line with the three-tier system in place in most states across the country and under federal law. The three tiers (or categories) are: zenforcing the laws and regulations governing alcohol and tobacco sales set out in Chapters 210, 561 through 565, 567, Manufacturers (see Manufacturers). and 568, Fla. Stat.; and Distributors (see Distributors). zinspecting locations during the initial licensing process. Retailers (see Retailers). The DABT controls licensing and maintains enforcement authority The intended purpose of the three-tier system is to eliminate over all tiers: “tied-houses” (see Tied-House Rules and Exceptions; Practice Manufacturers (including importers). Note, Alcohol Regulation: Overview: Tied-House Regulation (W-019-9723)). Distributors. Retailers. For more information on the background and history of the three-tier system, see Practice Note, Alcohol Regulation: Overview: Three-Tier FLORIDA BEVERAGE LAW System (W-019-9723). Florida Beverage Law regulates the manufacturing, distribution, and sale of alcohol beverages within the state (Chapters 561 through 565, MANUFACTURERS 567, and 568, Fla. Stat.). Manufacturers (also sometimes referred to as “producers”) include: Breweries. LOCAL REGULATION Wineries. Florida counties and municipalities are preempted from regulating Distilleries. many aspects of alcohol beverage establishments. In Florida, local regulation is limited to the regulation of: Manufacturers must both: Hours of sale. Florida counties and incorporated municipalities Produce, rectify, or blend alcohol products. may enact hours of sale ordinances (§ 562.45(2)(a), Fla. Stat.). Sell those products to either: If local law does not provide hours of sale, the default hours for zother manufacturers; or sale, consumption, or service of alcohol are limited to 7:00 a.m. to midnight each day (§ 562.14(1), Fla. Stat. (railroads, however, are zlicensed distributors. exempted from these hours)). (§ 561.14(1), Fla. Stat.) Zoning. Florida counties and incorporated municipalities may Certain licensees may sell alcohol beverages to licensed enact ordinances regulating the location of alcohol beverage manufacturers in Florida. These include certain resident and businesses, including requiring a certain minimum distance non-resident: separation between: 2 © 2019 Thomson Reuters. All rights reserved. Alcohol Regulation (FL): Overview Sales agents. These licensees may also sell to distributors in Florida considered franchisees. The beer franchise law is extremely nuanced. on behalf of out-of-state manufacturers (§ 561.14(4), Fla. Stat.). Beer and malt beverage manufacturers, importers, and distributors Importers. These licensees may also sell to licensed distributors should review the law carefully before entering into any type of (§ 561.14(5), Fla. Stat.). distribution agreement. Florida’s beer franchise law requires, among other things, that all DISTRIBUTORS agreements between manufacturers or importers and distributors Distributors (sometimes referred to as “wholesalers”): be in writing. The agreement must specify the distributor’s exclusive Purchase alcohol beverage products from manufacturers. sales territory by both: Sell those products to licensed retailers in the state or to other County. distributors where allowed. Brand. (§ 561.14(2), Fla. Stat.) (§ 563.021, Fla. Stat.) RETAILERS The law also provides rules for terminating distribution agreements. These rules generally provide that manufacturers and importers Retailers (more often referred to as “vendors” in Florida) sell alcohol can only terminate or fail to renew distribution agreements with beverages only at retail (§ 561.14(3), Fla. Stat.). Retailers are further distributors under certain specified circumstances. A manufacturer or classified in the industry as either: importer can only terminate or fail to renew a distribution agreement if:
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