HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 737 Craft Distilleries
SPONSOR(S): Commerce Committee, DiCeglie
TIED BILLS: IDEN./SIM. BILLS: CS/CS/SB 46
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 17 Y, 0 N Willson Anstead
2) State Administration & Technology 14 Y, 0 N Helpling Topp
Appropriations Subcommittee
3) Commerce Committee 21 Y, 0 N, As CS Willson Hamon
SUMMARY ANALYSIS
In Florida, the Beverage Law regulates the manufacture, distribution, and sale of wine, beer, and liquor by
manufacturers, distributors, and vendors. The Division of Alcoholic Beverages and Tobacco in the Department
of Business and Professional Regulation administers and enforces the Beverage Law.
The bill creates a quota license exemption for craft distilleries located in a community redevelopment area,
subject to certain requirements and limitations.
The bill amends the craft distillery requirements in s. 565.03, F.S., as follows:
 Increases the production limit to qualify as a craft distillery from 75,000 gallons per calendar year to
250,000 gallons per calendar year.
 Limits the amount of distilled spirits that may be transferred to the craft distillery’s souvenir gift shop for sale
to consumers to 75,000 gallons per calendar year.
 Effective July 1, 2026, requires that a minimum of 60% of the craft distillery’s total branded products must
be distilled in this state and contain one or more Florida agricultural products.
 Authorizes a maximum of 10 craft distillery licenses under common ownership, consisting of four with a
production cap of 250,000 gallons and six with a production cap of 50,000 gallons. “Common ownership” is
defined to mean “having a direct or indirect financial interest in two or more distilleries by the same person.”
 Allows craft distilleries to sell distilled spirits manufactured on the premises to consumers by the drink or by
package.
 Clarifies that craft distilleries may only sell directly to consumers in face-to-face transactions.
 Repeals the six bottle limit per branded product per consumer at a craft distillery’s souvenir gift shop.
 Prohibits craft distilleries from shipping alcoholic beverages to consumers.
The bill also requires craft distilleries to keep certain records for three years, and authorizes a craft distillery
permit for tastings at Florida fairs, trade shows, farmers markets, expositions, and festivals.
The bill appears to have no fiscal impact on state government. The bill may have a positive fiscal impact for
certain entities involved in the production or sale of distilled spirits.
The bill provides an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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 FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Beverage Law and the Three-Tier System
In Florida, the Beverage Law1 regulates the manufacture, distribution, and sale of wine, beer, and liquor
by manufacturers, distributors, and vendors. The Division of Alcoholic Beverages and Tobacco
(Division) within the Department of Business and Professional Regulation (DBPR) administers and
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.3
Since the repeal of Prohibition, 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 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.4
Generally, only licensed vendors are permitted to sell alcoholic beverages directly to consumers at
retail, and manufacturers, distributors, and exporters5 are generally prohibited from holding a vendor’s
license.6 Manufacturers, distributors, and vendors are generally prohibited from being licensed or
having an interest in more than one tier. Limited exceptions, subject to certain conditions, include the
ability for a craft brewery to hold a vendor’s license (tap room), a restaurant to hold a manufacturer’s
license (brew pub), and a winery to hold up to three vendor’s licenses.7
Exceptions
Exceptions to the three-tier regulatory system allow certain in-state wineries,8 craft breweries,9 and craft
distilleries to sell directly to consumers.10 Further, certain restaurants may be granted a vendor’s
license to manufacture a limited quantity of malt beverages which can be sold to consumers for
consumption on premises.11
Wineries may receive up to 3 vendor’s licenses on property contiguous to the manufacturing premises
of the winery.12 Section 599.004, F.S., establishes the Florida Farm Winery Program within the
Department of Agriculture and Consumer Services. The requirements for certification include that a
winery produce or sell less than 250,000 gallons of wine annually of which 60% is made from state
agricultural products, maintain a minimum of 5 acres of owned or managed land in Florida which
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. 561.14, F.S.
5 Section 561.01(16), F.S. “Exporter” means any person that sells alcoholic beverages to persons for use outside the
state.
6 Ss. 561.22(1), 561.14(3), F.S. However, see the exceptions provided in ss. 561.221 and 565.03, F.S.
7 See ss. 561.22, 561.24, 561.14(1), and 563.022(14), F.S.
8 See s. 561.221(1), F.S.
9 See s. 561.221(2), F.S.
10 See s. 565.03, F.S.
11 See s. 561.221(3), F.S.
12 See s. 561.221(1), F.S.
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 produces commodities used in the production of wine, be open to the public for tours, tastings, and
sales at least 30 hours each week, and pay an annual application and registration fee of $100.
Section 561.24, F.S., prohibits the licensing of a manufacturer as a distributor or exporter. Wineries that
qualify as a certified Florida Farm Winery are the sole exception to this prohibition. Additionally, the
Division may issue permits for a certified Florida Farm Winery to conduct tasting and sales of its wines
at Florida fairs, trade shows, expositions, and festivals. The permit is limited to the length of the event.
The certified Florida Farm Winery is required to pay all entry fees and must have a winery
representative present during the event.
Quota Licenses
Section 561.20, F.S., limits, by county, the number of alcoholic beverage licenses that may be issued to
permit the sale of liquor (distilled spirits) to one license per 7,500 residents within the county. These
limited alcoholic beverage licenses are known as “quota” licenses. New quota licenses are created and
issued when there is an increase in the population of a county. The licenses can also be issued when a
county initially changes from a county which does not permit the sale of intoxicating liquor to one that
does permit their sale. The quota license is the only alcoholic beverage license that is limited in
number; all other types of alcoholic beverage licenses are available without limitation. A person, firm, or
corporation may not have an interest, directly or indirectly, in more than 30 percent of the number of
quota licenses in a county.13
Quota License Exemptions
Current law permits certain types of businesses or persons to be licensed to sell beer, wine, and liquor
without any limitation on the number of such licenses which may be issued in a county, i.e., such
licenses are not subject to the quota in s. 561.20, F.S. Exemptions from the quota license system are
known as “special licenses.”
Section 561.20(2), F.S., provides several exemptions to the number of licenses that permit the sale of
beer, wine, and distilled spirits. The exemptions include restaurants, caterers, hotels and motels,
specialty centers built on government-owned land, bowling establishments, and airports.
The Beverage Law provides a limited exemption to the quota license limitation to permit the division to
issue an alcoholic beverage license (for the sale of beer, wine, and liquor) to:
 An operator of railroads or sleeping cars and a vendor in railroad transit stations.14
 Operators of steamships and steamship lines, buses and bus lines, or airplanes and airlines
engaged in interstate or foreign commerce or flying between fixed terminals and upon fixed
schedules in this state.15
 Persons associated together as a chartered or incorporated club, if not organized for the
purpose of evading license taxes and meeting certain conditions, including any golf club
operated by or on behalf of any incorporated municipality in this state, and any veterans' or
fraternal organization of national scope.16
 A caterer at a horse or dog racetrack or jai alai fronton.17
 A vendor who operates places of business where consumption on the premises is permitted,
which premises are located within a theme park complex and meeting specified conditions.18
 A marine exhibition park complex meeting specified conditions.19
 A state-chartered legal entity not for profit organized principally for the purpose of supporting or
managing the affairs of a symphony orchestra.20
13 S. 561.20(6), F.S.
14 S. 565.02(2), F.S.
15 S. 565.02(3), F.S.
16 S. 565.02(4), F.S.
17 S. 565.02(5), F.S.
18 S. 565.02(6), F.S.
19 S. 565.02(7), F.S.
20 S. 565.02(8), F.S.
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  The operator of a passenger vessel engaged exclusively in foreign commerce.21
 A state-chartered legal entity not for profit organized principally for the purpose of operating a
theater with live performances and not fewer than 100 seats.22
 The John and Mable Ringling Museum of Art direct-support organization.23
Alcoholic Beverage Deliveries
Vendors, but not manufacturers or distributors, are allowed to make deliveries away from their place of
business for sales actually made at their licensed place of business. Telephone, electronic, and mail
orders received at a vendor’s licensed place of business are construed as a sale actually made at the
vendor’s licensed place of business. Deliveries may be made in vehicles that are owned or leased by
the vendor, or in a third-party vehicle pursuant to a contract with a third party with whom the vendor has
contracted to make deliveries, including, but not limited to, common carriers.24
A craft brewery which also holds a vendor’s license is specifically prohibited from making deliveries
under this law.25
Distilleries and Craft Distilleries
Section 565.01, F.S., defines the terms “liquor,” “distilled spirits,” “spirituous liquors,” “spirituous
beverages,” or “distilled spirituous liquors” to mean “that substance known as ethyl alcohol, ethanol, or
spirits of wine in any form, including all dilutions and mixtures thereof from whatever source or by
whatever process produced.”
A “distillery” is a manufacturer of distilled spirits, and a “craft distillery” is a licensed distillery that
produces 75,000 or fewer gallons of distilled spirits per calendar year on its premises. A craft distillery
must notify the Division in writing of its decision to qualify as a craft distillery.26
A distillery engaged solely in the business of manufacturing distilled spirits, or a person engaged in the
business of blending and rectifying distilled spirits must pay a state license tax of $4,000 for each plant
or branch operating in Florida. The license tax for a craft distillery is $1,000. Persons who engage in the
business of distilling spirits may also rectify and blend spirituous liquors without paying an additional
license tax.27
According to the Division, 61 of the 64 licensed distilleries operating in Florida produce less than
75,000 gallons of distilled spirits.28
A craft distillery is allowed to sell to consumers branded products,29 distilled on the licensed premises,
in factory-sealed containers that are filled at the distillery and sold for off-premises consumption only.
The sales must occur at the distillery’s souvenir gift shop located on private property contiguous to the
licensed distillery premises, and included on the sketch submitted with the license application. Sales
must be in face-to-face transactions with consumers who are making a purchase of no more than six
individual containers of each branded product.30 The craft distillery is not required to obtain a vendor’s
license to sell to consumers from their souvenir gift shop.
21 S. 565.02(9), F.S.
22 S. 565.02(10), F.S.
23 S. 565.02(11), F.S.
24 S. 561.57(1) & (2), F.S.
25 Ss. 561.221 (2)(d), and 565.57(1), F.S.
26 S. 565.03(1)(b) & (c), F.S.
27 S. 565.03(2)(b), F.S.
28 Department of Business and Professional Regulation, Agency Analysis of 2020 HB 583, p. 5-6 (Dec. 6, 2019).
29 Section 565.03(1)(a), F.S., defines “branded product” to mean “any distilled spirits product manufactured on site, which
requires a federal certificate and label approval by the Federal Alcohol Administration Act or federal regulations.”
30 S. 565.03(1)(c), F.S.
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 The Division must approve any subsequent revisions to a craft distillery’s sketch to verify that the
souvenir gift shop location operated by the craft distillery is “owned or leased by the craft distillery and
on property contiguous to the craft distillery’s production building.”31
Section 565.03, F.S., imposes the following requirements and prohibitions for craft distilleries:
 A craft distillery may not ship, arrange to ship, or deliver distilled spirits to consumers, but may
ship, arrange to ship, or deliver distilled spirits to manufacturers of distilled spirits, wholesale
distributors of distilled spirits, state or federal bonded warehouses, and exporters.
 A craft distillery may not transfer its license or any ownership interest to any individual or entity
with a direct or indirect interest in another distillery licensed in any other state, territory, or
country. However, a craft distillery may be affiliated with another distillery that produces 75,000
or fewer gallons per calendar year of distilled spirits on its premises or in any other state,
territory, or country.
 A craft distillery must report to the Division within 5 business days after it has reached the
75,000-gallon production limit and cease making sales to consumers on the day after it reaches
the production limit.
 A craft distillery must submit beverage excise taxes on distilled spirits sold to consumers in its
monthly report to the Division.
 Containers must comply with the container limits in s. 565.10, F.S., which prohibits the sale and
distribution of distilled spirits in any size container in excess of 1.75 liters or 59.18 ounces.
Declaratory Statement
On January 19, 2018, the Division issued a declaratory statement interpreting s. 565.03(2)(c), F.S., to
permit a craft distillery to sell to consumers, at its souvenir gift shop, a product comprised of a blend of
liquors distilled on the premises of the craft distillery and liquors distilled by other manufacturers away
from the premises. The craft distillery may then, at the craft distillery, fill individual containers with the
final, blended liquor product for sale at its souvenir gift shop.32 However, a craft distillery may not sell to
consumers a product comprised of a blend of only liquors distilled by other manufacturers away from
the craft distillery’s licensed premises.33
Beverage Tastings
Section 565.17, F.S., permits licensed distributors of spirituous beverages and vendors to conduct
spirituous beverage tastings at any licensed premises authorized to sell spirituous beverages by
package or for consumption on premises without violating s. 561.42, F.S., provided that the conduct of
the spirituous beverage tasting is limited to and directed toward the general public of the age of legal
consumption.
Community Redevelopment Areas
The Community Redevelopment Act of 1969 authorizes a county or municipality to create a community