The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Rules
BILL: CS/CS/SB 46
INTRODUCER: Commerce and Tourism Committee; Regulated Industries Committee; and Senator
Hutson
SUBJECT: Craft Distilleries
DATE: March 2, 2021 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Oxamendi Imhof RI Fav/CS
2. Reeve McKay CM Fav/CS
3. Oxamendi Phelps RC Favorable
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/CS/SB 46 revises the licensing requirements for craft distilleries. The bill creates s.
565.02(12), F.S., to provide a quota license exemption for certain craft distilleries to qualify for a
vendor’s license if the craft distillery is located on a property within a destination entertainment
venue, as defined by the bill, and open for tours during normal business hours
The bill also amends s. 565.03, F.S., to increase the production limit for distilleries to qualify as
craft distilleries from 75,000 gallons per year to 250,000 gallons per year. Craft distilleries may
only sell up to 75,000 gallons of branded products in gift shops or tasting rooms and may not
ship products to customers. A maximum of 10 craft distilleries meeting certain requirements may
share common ownership. Effective July 1, 20206, a minimum of 60 percent of a craft
distillery’s total finished branded products must be distilled in the state and contain one or more
of Florida’s agricultural products. Craft distilleries must keep records of all alcoholic beverages
received from within or outside the state for a period of 3 years.
The bill allows craft distilleries to qualify for a permit to conduct tastings at Florida fairs, trade
shows, farmers markets, expositions, and festivals.
The bill takes effect July 1, 2021.
BILL: CS/CS/SB 46 Page 2
II. Present Situation:
Division of Alcoholic Beverages and Tobacco
The Division of Alcoholic Beverages and Tobacco (division) within the Department of Business
and Professional Regulation administers and enforces1 the Beverage Law,2 which regulates the
manufacture, distribution, and sale of wine, beer, and liquor.3
Three-Tier System
In the United States, the regulation of alcohol since the repeal of Prohibition has traditionally
been based upon a “three-tier system.” The system requires separation of the manufacture,
distribution, and sale of alcoholic beverages. The manufacturer creates the beverages; the
distributor obtains the beverages from the manufacturer and delivers them to the vendor. The
vendor (retailer) makes the ultimate sale to the consumer. Manufacturers cannot sell directly to
retailers or directly to consumers.4
Generally, Florida follows the three-tier system. Only licensed vendors are permitted to sell
alcoholic beverages directly to consumers at retail.5 Licensed manufacturers, distributors, and
registered exporters are prohibited from also being licensed as vendors.6 Manufacturers are also
generally prohibited from having an interest in a vendor and from distributing directly to a
vendor.7
Tied House Evil Prohibitions
The system is deeply 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.8 Activities are heavily regulated to prevent a manufacturer or distributor from having a
financial interest, directly or indirectly, in the establishment or business of a licensed vendor.
Three-Tier System Exceptions
Exceptions to the three-tier regulatory system permit in-state wineries,9 breweries,10 and craft
distilleries to sell directly to consumers.11 Restaurants licensed as vendors (brew pubs) may
manufacture a limited quantity of malt beverages and sell directly to consumers for consumption
on the licensed premises of the restaurant.12
1
Section 561.02, F.S.
2
Section 561.01(6), F.S., provides that the “Beverage Law” means chs. 561, 562, 563, 564, 565, 567, and 568, F.S.
3
See s. 561.14, F.S.
4
Id.
5
Section 561.14(3), F.S. However, see the exceptions provided in ss. 561.221 and 565.03, F.S.
6
Section 561.22, F.S.
7
Sections 563.022(14) and 561.14(1), F.S.
8
Jessica C. Starns, The Dangers of Common Ownership in an Uncommon Industry: Alcohol Policy in America and the
Timeless Relevance of Tied-House Restrictions (2017), available at https://www.centerforalcoholpolicy.org/wp-
content/uploads/2017/03/The-Dangers-of-Common-Ownership-in-an-Uncommon-Industry.pdf (last visited Feb. 16, 2021).
9
See s. 561.221(1), F.S.
10
See s. 561.221(2), F.S.
11
See s. 565.03, F.S.
12
See s. 561.221(3), F.S.
BILL: CS/CS/SB 46 Page 3
A winery, even if licensed as a distributor,13 may be licensed as a vendor for a licensed premises
situated on property contiguous to the manufacturing premises of the winery. A winery may not
be issued more than three vendor licenses.14
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.15
Quota License Exceptions
Current law permits certain types of businesses or persons to be licensed 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. Quota license exceptions are
known as “special licenses.”
Section 561.20(2), F.S., provides several exceptions to the number of licenses that permit the
sale of beer, wine, and distilled spirits. The exceptions include restaurants, caterers, hotels and
motels, specialty centers built on government-owned land, bowling establishments, and airports.
The Beverage Law provides a limited exception 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.16
 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.17
 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.18
 A caterer at a horse or dog racetrack or jai alai fronton.19
13
Section 561.14(1), F.S., permits manufacturers to distribute at wholesale to licensed distributors and to no one else within
the state, unless authorized by statute.
14
See s. 561. 221(1), F.S.
15
Section 561.20(6), F.S.
16
Section 565.02(2), F.S.
17
Section 565.02(3), F.S.
18
Section 565.02(4), F.S.
19
Section 565.02(5), F.S.
BILL: CS/CS/SB 46 Page 4
 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.20
 A marine exhibition park complex meeting specified conditions.21
 A state-chartered legal entity not for profit organized principally for the purpose of
supporting or managing the affairs of a symphony orchestra.22
 The operator of a passenger vessel engaged exclusively in foreign commerce. 23
 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.24
 The John and Mable Ringling Museum of Art direct-support organization.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,26 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
distillery must notify the division in writing of its decision to qualify as a craft distillery.27
All distilleries engaged solely in the business of manufacturing distilled spirits, or engaged in the
business of blending and rectifying distilled spirits, must pay a state license tax for each plant or
branch operating in Florida. Distilleries pay $4,000 annually for the license tax and craft
distilleries pay $1,000. Persons who engage in the business of distilling spirits may also rectify
and blend spirituous liquors without paying an additional license tax.28
Retail Sales by Craft Distilleries
A craft distillery is allowed to sell to consumers branded products29 distilled on the licensed
premises. The products must be in factory-sealed containers that are filled at the distillery and
sold for off-premises consumption.30 The sales must occur at the distillery’s souvenir gift shop
located on private property contiguous to the licensed distillery premises.31 The craft distillery is
not required to obtain, in addition to its manufacturer’s license, a vendor’s license in order to sell
distilled spirits to consumers.
20
Section 565.02(6), F.S.
21
Section 565.02(7), F.S.
22
Section 565.02(8), F.S.
23
Section 565.02(9), F.S.
24
Section 565.02(10), F.S.
25
Section 565.02(11), F.S.
26
Section 565.03(1)(c), F.S.
27
Section 565.03(1)(b), F.S.
28
Section 565.03(3), F.S.
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
Section 565.03(2)(c), F.S.
31
Id.
BILL: CS/CS/SB 46 Page 5
A craft distillery must report to the division within five 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.32
A craft distillery may not ship, arrange to ship, or deliver distilled spirits to consumers, except in
a face to face transaction. However, a craft distillery may ship, arrange to ship, or deliver
distilled spirits to manufacturers of distilled spirits, wholesale distributors of distilled spirits,
state and federal bonded warehouses, and exporters.33
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.34 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.35
A craft distillery must submit beverage excise taxes on distilled spirits sold to consumers in its
monthly report to the division.36
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.37 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.38
Deliveries by Licensees
Section 561.57(1), F.S., permits an alcoholic beverages vendor to make deliveries away from its
place of business for sales made at the licensed place of business. Telephone, electronic, or 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.
32
Section 565.03(2)(c)3., F.S.
33
Section 565.03(2)(c)4., F.S.
34
Section 565.03(2)(c)5., F.S.
35
Section 565.03(2)(c)6., F.S.
36
Section 565.03(5), F.S. Section 565.12, F.S., requires manufactures and distributors to pay an excise tax on alcoholic
beverages, with the tax rate per gallon depending on the percent of alcohol by volume of the beverage. Section 565.13, F.S.,
requires every distributor selling spirituous beverages within the state to pay the tax to the division monthly on or before the
10th day of the following month.
37
Final Order on Petition for Declaratory Statement, In Re: Petition for Declaratory Statement Before the Division Of
Alcoholic Beverages and Tobacco, On behalf of Drum Circle Distilling, LLC, DS 2017-071 (DABT Case No. 2017-052675),
January 19, 2018, (on file with Senate Committee on Regulated Industries).
38
Id.
BILL: CS/CS/SB 46 Page 6
Deliveries made by a manufacturer, distributor, or a vendor away from its place of business may
only be made in vehicles owned or leased by the vendor, or in a third-party vehicle pursuant to a
contract with a third party, including, but not limited to, common carriers.39
By acceptance of an alcoholic beverage license and the use of vehicles owned by or leased by the
vendor, the vendor agrees the vehicle is subject to be inspected and searched without a search
warrant by employees of the division or law enforcement officers to ascertain compliance with
all provisions of the alcoholic beverage laws.40
Common carriers41 may transport alcoholic beverages.42 The recipient’s age and identity must be
verified at the time of delivery. All deliveries by a licensee or a third-party must comply with s.
562.11, F.S., which prohibits selling, giving, serving, or permitting to be served alcoholic
beverages to a person under 21 years of age.43
A “permit carrier” is a licensee authorized to make deliveries under s. 561.57, F.S.44
Alcoholic Beverage Tastings
Section 563.09, F.S., permits manufacturers, distributors, and importers of beer to conduct
sampling activities that include the tasting of beer on the licensed premises of vendors authorized
to sell alcoholic beverages for consumption on premises and, if the licensed premises is an
establishment with at least 10,000 square feet or a package store, on the licensed premises of
vendors authorized to sell alcoholic beverages for consumption off premises. A vendor may also
conduct a tasting on its licensed premises using beer from its own inventory.
Section 564.08, F.S., permits licensed wine distributors and vendors to conduct wine tastings at
any licensed premises authorized to sell wine or spirituous beverages by package or for
consumption on premises without violating s. 561.42, F.S., provided that the conduct of the wine
tasting is limited to and directed toward the general public o