Whiskey & Wheaties | Winners and Losers

On May 24th Florida Governor Rick Scott vetoed SB 106, commonly referred to as the “Whiskey & Wheaties” bill. The proposed legislation would have allowed retailers like Target and Walmart to sell liquor inside their big box stores on the same shelves as their other products.

 

As a former retailer and President of the Florida Independent Spirits Association (the trade group responsible for helping kill the bill) I’ve had a front row seat for the debate in Tallahassee. As the dust settles on the 2017 legislative session, I think it’s only prudent to take a look at the winners and losers.

 

Loser: Walmart and Target

 

Although other retail chains such as Walgreens and Costco were supportive in the effort, Walmart and Target were the main proponents of SB 106. They sent teams of lobbyists to Tallahassee and spent millions of dollars pushing this legislation. One can only assume that Walmart is losing market share to Amazon at an alarming rate and they are attempting to replace that shelf space with products that the online giant has yet to master. Despite all of their efforts (including “making it rain” in the halls of Tallahassee), the voters and Governor of Florida have made it clear: you can’t legislate your way into an industry – if you want to sell spirits in the state of Florida, abide by our laws.

 

Winner: Florida Independent Spirits Association

 

The organization that was formed almost five years ago when the first Walmart-sponsored bill was introduced is made up of independent retailers from all over the state of Florida. In a battle that was comparable to David and Goliath, the little guys have come out on top four years in a row. Stressing the importance of responsibility and keeping alcohol out of the hands of minors, their message has resonated with prevention groups and law enforcement. Most importantly, FISA’s message of supporting small businesses over corporate welfare was a deciding factor in Governor Scott’s decision to VETO the bill.

 

Loser: Sen. Anitere Flores, Rep. Bryan Avila

 

The bill sponsors were allegedly given specific instructions by Senate President Joe Negron and Speaker of the House Richard Corcoran: get this bill passed at any cost. Despite passing the bill out of both the Senate and the House, they did so with very narrow margins. The contentious committee process and heavy-handed tactics used by leadership also created an enormous amount of animosity within party ranks. There is little doubt that the Governor took these factors into consideration when making his decision.

 

Winner: SKD Group

 

When FISA was formed five years ago, they hired SKD Group and chief lobbyist Scott Dick to lead the charge against Walmart and the proposed legislation. A veteran Tallahassee lobbyist, Dick has spent his career working with the alcohol beverage industry.   His knowledge of the political process and relationships with the legislators was a vital component in FISA’s legislative victories. “I cannot say enough about the effort put forth by Scott Dick and his team at SKD Group,” says Chris Knightly, owner of Knightly Spirits in Orlando. “ Without him we would have lost this battle years ago. The independent beverage retailers in the state of Florida owe him a debt of gratitude!”

 

Loser: Florida Restaurant & Lodging Association

 

At first glance this might cause some confusion. You’re probably wondering why the trade association representing Florida’s restaurants and hotels would be included on this list. You’re not alone. The FRLA repeatedly lobbied for SB 106 during the committee process, each time giving vague and puzzling answers when asked by legislators as to why they were involved in a retail liquor store issue. Many theories surfaced during the process but the most convincing rationale was the FRLA would be a political puppet for anyone at the right price. Members of the FRLA took notice and started to question why their membership dollars and lobbying resources were being spent to support a legislative issue that has nothing to do with their industry.

 

Winner: Publix, ABC Fine Wine & Spirits

 

Publix is not only the largest Florida-based retailer and employer, it also sits atop the list of number of liquor stores in the state (approximately 180). Publix was opposed to the proposed legislation for good reason – they’ve spent millions of dollars creating retail outlets based on current Florida law. ABC has fewer outlets (approximately 130) but the family owned company based out of Orlando is probably the largest retailer of wine and spirits by volume in the state of Florida. CEO Charles Bailes III was the most vocal opponent of the bill, citing the obvious hazards of providing easier access to alcohol by minors.

 

Loser: Pernod Ricard

 

With the exception of DISCUS (who repeatedly and wrongfully insists that distilled spirits are no different than beer or wine), most industry suppliers and distributors stayed out of the fray and remained neutral. Except for Pernod Ricard. As the emails and phone calls opposing the bill flooded the Governor’s office, Pernod Ricard submitted a letter of support for the bill and encouraged the Governor to sign it into law. Whether decision makers at Pernod Ricard thought the bill would pass and wanted to gain favor with Walmart or they truly support the concept of corporate welfare, it was a huge tactical error on their part. The 1,200 plus independents across the state of Florida – whose businesses were put in jeopardy by the proposed bill – are not letting them off the hook. Several of the largest independent retailers have greatly reduced the footprint of Pernod Ricard brands – some even eliminating them altogether from their shelves. With Absolut sales already struggling in the state of Florida, Walmart might have to make it their propriety brand of vodka.

 

Winner: Florida Consumers

 

Despite Walmart and Target’s unfounded claim of “convenience for the consumer,” the big winner in this battle is the Florida consumer. Big box store are notorious for selling only the top SKU’s and eschewing innovation. If there is one thing the alcohol beverage industry can agree on it’s that innovation is born in the independent market. The craft beer craze was cultivated in small, niche retail stores while small, start-up brands that are now behemoths (think Tito’s) were introduced in the independent market because the big box chains were unwilling to take away shelf space from brands like Smirnoff and Absolut. Consumers have more choices and new brands are allowed to flourish because of independent retailers. #ShopSmall #ShopLocal are the new hashtags of choice.

 

 

Reality Check

 

Whether you agree or disagree with this list, the probability exists that this piece of legislation will return again in the future. Governor Scott is finishing his second term and the leadership in the House and Senate will not look much different in the years to come.   More specifically, it is unlikely that Target and Walmart will simply lick their wounds and go away.

 

The nagging question for the alcohol beverage industry in Florida is simple: how will the independent retailers react? Will they continue to operate their stores in the same antiquated manner as they have in the past, or will they take advantage of this opportunity and embrace technology so they can compete with the ever-growing chain presence? ABC Fine Wine & Spirits got their wake up call years ago and have been evolving ever since: state-of-the-art eCommerce website, investments in online marketing, updating the appearance of their stores and introducing services the grocery stores can’t provide (think Growler stations).

 

At Dramshop Media, we service clients all over the country and the growing trend is undeniable: evolve or die. eCommerce website, online marketing, customer rewards programs – all mandatory in today’s retail marketplace. Will the independent retailers of Florida take that first evolutionary step? With all of the effort that has gone into defeating “Whiskey & Wheaties,” we certainly hope so.

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