Despite being one of Miami-Dade's longest-standing craft breweries, nowadays you can only purchase M.I.A. beer by the can at the brewery's Doral taproom — or out of state.
"'Why can't you buy M.I.A. Beer Company beers locally anymore?' It's a question I've heard many times in the past six months, and one I'm finally ready to discuss," M.I.A. managing partner Eddie Leon tells New Times. "The simple answer is that we no longer have a distributor that can deliver our beer in Florida."
So why not just find a new distributor?
It's not that simple.
For M.I.A., distribution of its beer in Florida has become a complicated legal situation that ties into the state's three-tier system and the franchise laws that control beer distribution.
Initially drafted in the 1930s, these franchise laws were written to serve small, independent distributors that, in those post-Prohibition times, relied on only a few large beer brands such as Budweiser and Coors. When the laws were written, Florida's independent craft beer scene hadn't yet come into existence, and in the 1980s, when the laws were last amended, the state's craft brewing industry was in its infancy.
Four decades later, Fort Lauderdale-based Tarpon River Brewing managing partner and Florida Brewers Guild legislative chairman Adam Fine tells New Times that the industry dynamic has flipped.
"There are now hundreds of small breweries, and only a handful of large distributors that — under current Florida statutes — hold franchise rights over the breweries they represent," Fine explains.
That's because by law, once both parties have signed, a contract between brewer and distributor continues in perpetuity — as in forever. There are precious few exceptions, and most of them favor the distributor.
"The way the law is written, it's virtually impossible for a brewery to leave a distributor when there's a dispute," says Fine. "That isn't the case for wine or spirits. There's no other business I can think of that is restricted and held hostage in this way."
Such is the plight of M.I.A., which signed with Cavalier Distributing, an Indiana-based company that currently represents 15 Florida craft breweries, in 2016. At the time, Eddie Leon says, his brewery's sales grew rapidly in South Florida and expanded into regions like Tampa and Orlando.
"The industry was thriving, and our goal was to hit 120,000 cases yearly. So we reinvested, bought more equipment, and ramped up production," the brewer recounts. "In 2017, we almost hit our mark, selling just under 100,000 cases."
When COVID-19 hit in 2020, M.I.A. lost onsite sales. Leon didn't expect distribution sales to plummet as well, but retail sales dropped 40 percent that year. The subsequent two years were even worse.
"I knew at the rate we were going, it wasn't good," the brewer says. "According to my projections, if it kept going this way, we wouldn't be selling any beer at all pretty soon."
To address the continued sales decline, and in accordance with Florida Statute 563.022, M.I.A. asked Cavalier to propose a "corrective action plan" to readdress the brewery's sales strategy. Cavalier had 30 days to respond with a plan and 90 days to set matters right.
"When Cavalier failed to take action, they were technically in breach of their duties, and we could, in theory, terminate the business relationship," Leon says.
To that end, M.I.A. sent a notice of termination to Cavalier in April 2022, stating that the distributor had failed to comply with the distribution agreement.
Cavalier disagreed, stating M.I.A. did not have good cause to terminate the agreement and was in breach of contract.
In a letter dated May 5, 2022, Cavalier alleged that M.I.A. had failed to participate in annual meetings, develop its own plan for brand growth, and provide Cavalier with sales information to help promote its products or a production calendar within a commercially reasonable timeframe.
"M.I.A.'s termination of the agreement violates Florida law and gives rise to substantial liability," Cavalier's attorney, Patrick Kasson, wrote. "Although Cavalier would like to resolve this matter cordially, I am also writing to place M.I.A. on notice of the claims against it."
In July, Cavalier filed suit against the brewer. In practical terms, the ongoing litigation precludes the brewery from signing with another distributor.
The prospect of going to court brings its own set of complications.
"It's highly likely we'd win at trial, but our company most likely would not survive being out of distribution during that process," Leon adds. "We want to be among the first to stand up and take action. My goal is to set a precedent for these types of relationships moving forward."
Representatives from Cavalier Distributing and the Florida Beer Wholesalers Association declined to comment for this story.
Is It High Time to Change the Law?
For Mike and Brooke Malone, the couple behind Vero Beach-based Walking Tree Brewery, the state's franchise laws are more than outdated — they're proving to be increasingly unfair."It blows my mind that as a brewery owner, I have no control over this part of my business," Mike tells New Times. "We need a way to negotiate contracts that work for both sides, not just the distributor. That's really what we, as brewery owners, want to see change: to see both parties have equal rights and a normal business relationship."
Brooke Malone, who also serves as president of the Florida Brewers Guild (FBG) trade group, adds that many of the state's 374 independent craft breweries support several reforms outlined in the guild's "Freedom for Beer" campaign. Created in association with the Craft Brewers of Florida Political Committee, the campaign aims to tackle the crucial statutes that govern craft beer manufacturing in Florida: franchise law, self-distribution, licensing fees, and brand registration.
As part of the initiative, members of the FBG, along with a host of Florida craft brewery owners and lobbyists, have visited Tallahassee twice this year to meet with state lawmakers.
Adam Fine had hoped to tackle big-picture items like franchise law and self-distribution. But the FBG ultimately chose a more modest goal: to clarify how the state assesses brand registration fees of malt beverages via House Bill 1459 and Senate Bill 658. If adopted, the new legislation would specify that brewers would pay brand registration fees only for beers sold outside their taprooms, rather than the current law, which is ambiguously written.
According to former FBG board member and Riverview-based Leaven Brewing Co. co-owner Jillian Lynch, the effort could immediately impact small breweries that produce large numbers of experimental, one-off beers.
"A lot of us want laws that are clear and uniform. Right now, we're all getting different answers with things like brand registration, and that's definitely something we want to see addressed," Lynch tells New Times. "I have two core and four seasonal beers that I register and pay for, but I know other brewery owners who are being told any beer they've ever made must be registered — which could translate to thousands of dollars. If I were to register every brand I ever created, that would suffocate my creativity because I'd have to turn every new beer into the financial decision of, 'Do I want to pay for that?'"
Fine says the decision to hold off on wholesale changes to the law was an intentional, incremental strategy.
"While franchise-law reform and self-distribution are the most important issues facing small brewing businesses, they are also met with the most resistance from the distributors who find protection in these existing laws," he explains.
"Franchise law is on the to-do list. Right now, educating the legislators is key," agrees Joshua Aubuchon, who acts as general counsel and lobbyist for the FBG. "This year, we have 40 new members in the House alone, and for many of them, this will be the first time even hearing about these issues. There's going to be some work getting them up to speed — even sharing examples like the problems facing M.I.A. — to really show the necessity for the changes we hope to make."
Over the years, many states have amended franchise laws regarding beer to be more equitable, including an option for self-distribution. In those states, breweries are permitted to sell at least some of their beer — often within a short radius of the brewery's location — directly to bars, restaurants, or liquor stores without the intervention of a distributor.
"To date, 39 states have passed self-distribution legislation for breweries under 60,000 barrels," Brooke Malone notes. "Is Florida going to be the last?"
Fine says prohibiting self-distribution for small breweries has become the elephant in the room.
"We believe that a working three-tier system is healthy for the alcoholic-beverage industry in Florida," says Fine. "However, in its current state, it hinders the ability of small breweries to grow and be successful before committing to a lifelong decision. We believe that with open dialogue, we could reach an agreement that would benefit both sides. Unfortunately, one side is not willing to discuss these changes because they already have the benefits of the existing laws."
"Distributors are not evil," M.I.A.'s Eddie Leon hastens to add. "They are a critical part of our industry and have the difficult job of selling, delivering, and maintaining inventory of freshly brewed beer. We see Cavalier's actions as a blatant abuse of franchise law, one that clearly shows the problems with this type of system in Florida. It's time for these laws to be amended. Put simply, it's not fair business practice."
