2017 Fall ABL INSIDER

THE V OICE OF AMERICA’S BEER, WINE & SPIRITS RETAILERS

ABL INSIDER VOL. 11, NO. 3 | FALL 2017

A PUBLICATION OF AMERICAN BEVERAGE LICENSEES

Trade Practices & The Modern Beverage Alcohol Industry: Striking The Right Balance

VOL. 11, NO. 3 | FALL 2017

contents 3 heritage

10 guest spotlight

4 leading

11 guest spotlight

5 where we stand

12 homefront

November Is Package Liquor Store Month

Working Together to Establish an Open & Frank Dialogue

Change Is Here. What Do You Want to Be?

6-7 legislative updates

End Drunk Driving Act Introduced; Department of Labor May Rescind Tip Pooling Regulations Act Introduced

8 industry voices

Craig Wolf, President & CEO, WSWA

9 industry voices

Craig Purser, President & CEO, NBWA

industry calendar

Jim McGreevy, President & CEO, Beer Institute

Brad Rosen, CEO, Drync

Trade Practices & The Modern Beverage Alcohol Industry: Striking the Right Balance

13 convene

2018 ABL Annual Meeting: Save-the-Date!

14-15 state & industry update 16 associate & affiliate members

September 2017

October 2017 (Cont.)

10th Annual Alcohol Law & Policy Conference

NBWA 80th Annual Convention & Trade Show

September 6-8 | Chicago, IL

September 8 | Indianapolis, IN

Indiana Association of Beverage Retailers Annual Golf Outing

September 11-14 | Billings, MT

Wine, Beer & Spirits Law Conference

September 17-19 | Alton, IL

Illinois Licensed Beverage Association 132nd Annual Convention Wine & Spirits Guild of America Meeting

Wine & Spirits Wholesalers of America Fall Membership Meeting

March 11-13| New Orleans, LA 2018 ABL Annual Meeting

September 26-28 | Washington, DC ABL Fall Board Meeting

June 2018

October 2017

June 11-12 | Fairbanks, AK ABL Summer Board Meeting

October 2-5 | Appleton, WI

Tavern League of Wisconsin Fall Convention & Trade Show

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October 16 | Washington, DC

March 2018

September 22-25 | Boston, MA

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New York State Liquor Store Association 8th Annual Holiday Trade Show #1 New York State Liquor Store Association 8th Annual Holiday Trade Show #2

September 14-15 | Portland, OR

editor MATTHEW EVANS

October 10 | Albany, NY

October 12 | Rochester, NY

Montana Tavern Association Convention

Published by: American Beverage Licensees 5101 River Rd, Suite 108 Bethesda, MD 20816 (301) 656-1494 www.ablusa.org

October 8-11 | Las Vegas, NV

ISSN# 2331-6594 (c) 2017 American Beverage Licensees.

All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher.

AMERICAN BEVERAGE LICENSEES

executive director JOHN BODNOVICH director, trade relations & operations SUSAN DUFFY communications manager MATTHEW EVANS

heritage ABL to Celebrate 8th Annual Package Liquor Store Month in November

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his November, ABL and licensed beverage alcohol retailers nationwide will join together to celebrate the 8th Annual Package Liquor Store Month. The celebration recognizes the dedication, commitment, hard work, and accomplishments of independent package liquor store owners from across the United States.

underestimate of the role they play. They also provide their customers with an education of the various items available to them – including knowing where and how items are produced – as well as how best to enjoy and share them responsibly with friends and family.

Established in 2010, Package Liquor Store Month encourages cities, towns and municipalities to recognize the important and vital role these small businesses play within their local communities.

The term “Package Store” dates to the early 20th Century and is defined by Merriam-Webster’s Dictionary as “a store that sells bottled or canned alcoholic beverages for consumption off the premises.” The local nature of package liquor stores continues to this day and distinguishes them from corporate, “Big Box” off-premise retailers.

As the retail environment continues to evolve – with “Big Box” retailers’ ever-increasing efforts to dominate the landscape – package liquor stores represent some of the last independent retailers on Main Street. As licensed beverage alcohol retailers, package liquor stores work diligently every day to ensure beverage alcohol products are sold responsibly and only to those of legal drinking age.

“In celebrating independent package liquor stores, ABL also recognizes that distilled spirits are not the only industry products most of those stores provide,” said ABL Executive Director John Bodnovich. “While the vernacular has shifted and many people refer to their local licensed beverage retailers simply as ‘liquor stores’ or ‘bottle shops’ instead of package stores, independent beverage retailers often sell a wide variety of wine and beer as well.”

Within the Three-Tier System, retailers serve as the public face of the beverage alcohol industry. As such, to view these retailers merely as sellers of beverage alcohol to consumers is a vast

endeavors and community organizations and groups.”

Through a combination of providing an expansive array of beverage alcohol products, in-store tasting and educational events, and knowledgeable customer service, independent package liquor stores set themselves apart from other off-premise stores. Employees at these Main Street brick-and-mortar businesses are continuously trained to conduct safe and responsible face-to-face sales of beer, wine and spirits to adult consumers.

Package liquor stores are also leading the fight to prevent underage access to alcohol.

By participating in programs such as We Don’t Serve Teens and Cops in Shops, package liquor stores work hand-in-hand with law enforcement, the government and their communities to prevent underage access to alcohol. Recent studies also reflect the positive steps beverage alcohol retailers have taken to combat underage access alcohol. Among “underage drinkers” (1220 years of age), more than 91 percent did not purchase alcohol themselves the last time they consumed alcohol .

Package Liquor Store Month November

Across the country, off-premise beverage alcohol retailers also play an important and dynamic role within the greater economy – both at the state and federal levels – with an overall economic impact of $87.9 billion in 2016. These retailers further account for more than 551,000 jobs, $33.12 billion in wages and benefits (averaging $39,800 annually), while also paying $7.76 billion in federal taxes and $6.22 billion in state and local taxes2.

“Independent package liquor stores are more than mere purveyors of beer, wine, and spirits in the cities and towns where they operate,” said ABL President Steve Morris. “Rather, they are an integral part of their communities – working to prevent underage access to beverage alcohol products and providing various forms of support to local events, civic

Mark your calendar and plan on joining ABL this November in celebrating the 8th Annual Package Liquor Store Month, and remember to visit www.ablusa.org to download promotional materials!

#PLSMonth 1: SAMHSA Report to Congress on the Prevention and Reduction of Underage Drinking (Dec. 2013) 2: ABL 2016 Economic Impact Study (Aug. 2016)

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leading Working Together to Establish an Open & Frank Dialogue

O STEVE MORRIS President American Beverage Licensees

ver the past few months, there have been several developments within the beverage alcohol industry where ABL has been an active participant and working for you – America’s independent beer, wine and spirits retailers.

Among these developments, I would like to take this opportunity to discuss three in particular: a new music licensing bill in Congress; Utah’s recent 0.05 DUI legislation; and the evolving environment of the craft beer, wine and spirits sector of our industry and what it means for traditional on-premise and off-premise retailers.

Music Licensing: In late July and following a multi-year effort, ABL and its partners in the M.I.C. Coalition voiced their support for a step toward reforming the current music licensing system. On July 20, Reps. Jim Sensenbrenner (R-WI), Suzan DelBene (D-WA), and Blake Farenthold (R-TX), introduced the Transparency in Music Licensing Act (H.R. 3350) in the House of Representatives. The bill, which aims to “establish a database of nondramatic musical works and sound recordings to help entities that wish to publicly perform such works and recordings to identify and compensate the owners of rights in such works and recordings, and for other purposes,” has since been referred to the House Judiciary Committee for review.

The formal introduction of H.R. 3350 serves as a testament to ABL’s effort to serve our members and address their interests on Capitol Hill. ABL has participated in numerous meetings and conference calls with its partners in the M.I.C. Coalition to educate members of Congress about music licensing issues. Now, it is joining likeminded groups to come together as a single voice and to support Congressman Sensenbrenner and his staff as they work to increase transparency within the music licensing ecosystem.

Utah & 0.05 BAC As many of you are probably aware, the Utah State Legislature recently enacted H.B. 155, “Driving Under the Influence and Public Safety Revisions,” lowering the BAC threshold for DUI in the state from the national standard of 0.08 to 0.05.

As beverage alcohol retailers, we are the last to handle beer, wine and spirits before they reach consumers, and play an important role promoting responsibility. For decades, bar, tavern and package store owners have sincerely supported effective and proven anti-drunk driving policies. This has included very strong support of the enforcement of the current 0.08 BAC drunk driving limit.

While ABL typically does not take formal

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positions on issues at the state level, we felt compelled to publicly voice our opposition to this legislation. Accordingly, ABL has formally written to the Utah Interim Transportation Committee requesting they reconsider implementation of the law.

In no way does arbitrarily redefining drunk driving address the problem at its core, and further dilutes current efforts to prevent repeat offenders and those who drive with extreme BAC levels. H.B. 155 effectively criminalizes the activities of law-abiding social drinkers who, by a wide majority, are responsible consumers. It also ignores the many advocates who support a more comprehensive approach to the serious problems of impaired driving. ABL will continue to provide information on the status of this situation as it becomes available.

The Retail Beverage Environment As the beer, wine and spirits marketplace continues to evolve, the retail tier finds itself in relatively uncharted territory: how can we encourage and support industry growth and evolution while simultaneously maintaining our unwavering support for the Three-Tier System?

Increasingly, retail beverage licensees are being forced to defend their traditional roles and the licenses they hold in the face of competitors, who expect to be held to entirely different standards that often don’t comport with standards set for other producers, suppliers and retailers.

When viewed through the lens of the Federal Alcohol Administration Act of 1935 and its regulations pertaining to tied house arrangements, many new alcohol business ventures fall in a “no man’s land” or sorts, appearing to be involved in multiple tiers of the industry – or in formats that have heretofore not existed. Some seek to manipulate loopholes in existing state liquor laws while others attempt to circumvent traditional licensing norms. To hear my fellow licensees talk about what is going on in theirs states, it’s a brave new world.

In an environment where alcohol consumption remains relatively flat, it’s important that we recognize that the pie is not growing. It’s simply being cut up into more, smaller pieces. It’s also important that beverage licensees work with industry partners across all tiers to take a constructive approach to resolving points of contention. By working together and establishing an open and frank dialogue amongst concerned parties, ABL continues to fight for the interests of our members and their small businesses. |

where we stand Change Is Here. What Do You Want to Be?

I JOHN BODNOVICH Executive Director American Beverage Licensees

f there is one thing that most every American can agree on (improbable, I know), it’s that change is coming to how we live our lives faster than it’s ever come before. The idea that change is accelerating is best explained in Moore’s Law, an observation made in 1965 by Gordon Moore, co-founder of Intel. In a paper, Moore posited that technology – in this case, the number of transistors in a dense integrated circuit – doubles approximately every two years. This can be applied to any digital technology. Just think: a mere 10 years ago, there was no such thing as an “iPhone”. Now, the dawn of self-driving cars, drones and artificial intelligence is upon us.

So it goes with the beverage alcohol industry; change is taking place all the time – but seemingly faster than ever. New products: more beer, wine and spirits are available than ever before. New companies: more beverage alcohol producers exist than ever before. And now, thanks in large part to the growth and adaptation of technology (as well as the cultural acceptance), there is pressure for greater access to beverage alcohol in more settings than ever before.

Situational Awareness: What Is Your Plan to Compete Against the Zoo? For existing beverage licensees, be they onor off-premise, the importance of situational awareness is more important than ever. But what does this mean for a beverage licensee?

It starts with taking stock of what they are, what they are good at doing, and how they can differentiate themselves for customers in an increasingly crowded marketplace.

For on-premise licensees, this can mean acknowledging new market entrants are now competing for their customers. At this point, most in the business are aware of the ongoing push by suppliers to obtain retail privileges.

But the question now becomes: are licensees ready for places like zoos, barber shops, movie theaters and grocery stores to become destinations for on-premise drinking? These non-traditional drinking places may be welcome in terms of normalizing responsible drinking and embracing hospitality, but they enter an already crowded market where entertainment dollars are increasingly targeted by a multitude of providers.

On the off-premise side, there are also new retail market entrants who are not shy about challenging existing market norms and regulatory structures. Beverage retailers are not afraid of competition - they compete every day, but do so with an expectation that the playing field will be

level. With national corporations increasingly moving into the retail alcohol sector – coupled with the increasing presence and pressure of internet operators (who are sometimes moving faster than the laws intended to regulate them) – the time is now for licensees to plan for an uncharted future.

How can long-standing independent licensees stay relevant – and in business – in these changing times?

Recapturing the Narrative How we use language can have a powerful effect on colleagues and customers. It is more important than ever for local retailers to maintain (or in some cases recapture) the narrative of being a local community-oriented business.

Other segments of the beverage alcohol industry have done a particularly good job promoting themselves as job creators and ambassadors to their communities. Often, that narrative far exceeds the realities – at least comparably to local bars, taverns and package stores. Part of that is attributable to the newness of some industry companies and the newly minted privileges which they are now enjoying. But another part of it is the fact that sometimes, people take long-standing businesses for granted. To them, your business – be it a Main Street bar or the local wine and spirits shop – is always going to be there to serve them simply because it HAS always been there to serve them. Unfortunately, that is not always the case.

Beverage licensee can no longer afford to take communal goodwill for granted. In the increasingly competitive beverage market, complacency must be wiped away and replaced with promotion, marketing and creativity. And perhaps most importantly, constantly reminding customers, elected officials and the media that you are a “heritage” beverage licensee. You are a “Main Street” business. You are a “local” establishment. You are a “family-owned” operation. It may sound like commonsense, but this narrative of who you are and what you do, is vitally important.

Authenticity Is the New Luxury I’m fortunate that I get to interact with beverage licensees from across the country. ABL members are salt-of-the-earth people. Many of them work behind bars and counters, providing hands-on service and getting to know their customers without pretense of preconceived notions. (continued on pg. 7)

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legislative update “Craft Beverage Modernization” Update; End Drunk Driving Act Introduced; and Department of Labor May Rescind Tip Pooling Regulations

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OP Tax Bill Plans on Hold Until Budget Resolution is Agreed Upon Much has been made about House Republicans’ plans to reform the tax code through a sweeping reform bill that would simplify taxes while reducing corporate tax rates that are viewed by party leaders as burdensome and out of line with other industrialized countries. However, it remains unclear when the Trump Administration and Congressional GOP leaders will be able to move on tax reform - thanks to a shrinking legislative calendar, a host of other legislative priorities, and a yet unseen bill from the House Ways & Means Committee.

The next step for Congress on the path to a tax reform debate is passing a budget resolution, which could happen sometime this fall. As of now, Congressional Republican leaders don’t yet have the votes to bring the fiscal 2018 budget resolution to the floor.

It has been their plan to use a reconciliation bill framed by that budget to move tax legislation and, thanks to Senate rules, allow for passage in the upper chamber by a simple majority.

House conservative hard-liners want more details on the tax plan – including whether it will be revenue-neutral – before agreeing to a budget resolution.

For beverage licensees, a major tax reform bill could have an impact in a handful of different ways: Border Adjustability Tax – Formerly a potential source of revenue to off-set rate reductions, Republican leaders have taken this off the table, thus eliminating a highly contentious issue that had pitted dueling business factions against each other, and making passage of a reform package more unlikely. Had border adjustability been implemented, it likely would have meant an increase in prices of imported beverage alcohol products.

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Estate Tax – As part of the tax reform principles introduced by House Ways & Means Committee Chairman Kevin Brady (R-TX), the Estate Tax would be fully repealed as part of the tax plan. Beverage licensees have has long held the belief that the best way to protect all family-owned businesses from the estate tax is by repealing it permanently.

S-Corp/Pass-Through Entities – Most ABL members’ businesses are structured as “pass through entities” for federal income tax purposes.

These sole proprietorships, partnerships and LLCs and S corporations are not subject to income tax. Instead, the owners are directly taxed individually on the income, considering their share of the profits and losses.

As Congress debates lowering corporate rates from 35 percent to as low as 15 percent, beverage licensees are urging legislators to make sure that pass-through rates are kept comparable to corporate rates to encourage more job creation.

It remains unclear how potential tax legislation would address pass-through taxation rates and it is unlikely that the public will know much more about it until language is released.

“Craft Beverage Modernization” Update The broader conversation about tax reform on Capitol Hill could also determine the fate of another piece of tax legislation that is supported by nearly all alcohol industry supplier trade associations. As of September 10, the Craft Beverage Modernization and Tax Reform Act (CBMTRA) (S. 236; H.R. 747) has attracted 46 Senate and 258 House cosponsors.

The bill, which would provide federal excise tax relief to alcohol producers, is supported by the American Craft Spirits Association, Beer Institute, Brewers Association, Distilled Spirits Council, WineAmerica and the Wine Institute.

The lead lawmakers on the bills are Senate Finance Committee Ranking Member Ron Wyden (D-OR) and Senator Roy Blunt (R-MO); and Reps.

Erik Paulson (R-MN) and Ron Kind (DWI) in the House.

“Death Tax Repeal Act” Update The Death Tax Repeal Act (S. 205; H.R. 631) now has 99 House co-sponsors and 35 Senate co-sponsors. The text of this legislation may be included in a larger tax reform package being worked on by House Republicans. ABL has signaled its support of the legislation via letters from the Family Business Estate Tax Coalition and the Family Business Coalition.

End Drunk Driving Act Introduced

by Rep. Kathleen Rice (D-NY) On July 24, Rep. Kathleen Rice (D-NY) introduced the End Drunk Driving Act of 2017 (H.R. 3374), which has been referred to the House Transportation and Infrastructure Committee. As of September 10, the bill does not have any cosponsors and no similar legislation has been introduced in the Senate. Rep. Rice is a career prosecutor from Long Island who in 2006 was named the “state’s toughest DWI prosecutor” after leading a number of public initiatives to fight drunk driving.

Rep. Rice initially announced that she would introduce the bill in December 2016. It: Requires that within 10 years, all new cars sold in the U.S. must be equipped with advanced technology that prevents the car from moving if the driver’s BAC is at or above the legal limit; Boosts funding for the Driver Alcohol Detection System for Safety (DADSS) program to help ensure the technology is fully developed within 10 years; and Withholds highway funding from states that don’t have mandatory use of ignition interlock devices for all offenders.

Overtime Rule Dead Following Judge’s Ruling On August 31, Judge Amos Mazzant struck down an Obama Administration rule that would have required employers to pay overtime to most salaried workers

legislative update who earn less than $47,476 annually, a marked increase from the current annual salary limit of $23,660. Judge Mazzant ruled that the Department of Labor improperly looked at salaries instead of job descriptions when determining whether a worker should be eligible for overtime pay.

Judge Mazzant found that the Obama Administration’s proposed overtime rule went beyond Congress’ intent in determining who should be exempt from overtime pay. “If Congress was ambiguous about what specifically constituted an employee subject to the [executive, administrative and professional] exemption, Congress was clear that the determination should involve at least a consideration of an employee’s duties,” Mazzant concluded.

Judge Mazzant initially froze the rule on November 22, 2016 from taking effect on December 1, 2016. Numerous business groups and 21 states had legally weighed-in in opposition to the rule at that time. Since taking office,

the Trump Administration has asked for public comment on changing the overtime threshold instead of mounting a vigorous appeal to the judge’s ruling.

Department of Labor May Rescind Tip Pooling Regulations On July 20, the Trump Administration announced that it plans to address “Tip Regulations Under the Fair Labor Standards Act (FLSA)”, a 2011 Obama Administration regulation that limits tip pooling. It is generally expected that the Trump Administration will recommend that the Obama-era rule, which prohibits employers from pooling or sharing tips among staff that traditionally receive tips with other non-tipped employees, be rescinded thus giving on-premise establishment owners and operators more ways to distribute tips among staff.

Current regulations state: “Tips are the property of the employee whether or not the employer has taken a tip credit under section 3(m) of the FLSA. The employer is prohibited from using an employee’s tips, whether

(continued from pg. 5)

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hat’s why ABL members are well-positioned to embrace authenticity and use it as a means of competing against those for whom the beer, wine and spirits business is a secondary consideration. “Disruptors” may focus on convenience, but that may also mean that they don’t focus on product selection and knowledge, as well as overall customer service. This provides traditional beverage licensees with an opening to talk about what sets them apart.

Maybe it’s that your bar is owned by a third-generation family member and the signature cocktail that they are known for hasn’t changed in 50 years. Or maybe it’s a package store’s long-standing reputation for carrying a wide selection of wines. Focusing on what makes your business authentic and real – not just a carbon copy of a business that can be found five states away – is appealing to customers and consumers who are seeking an authentic experience.

And if convenience is your business model, then embrace that too! Not all customers are created equal in terms of what they want, so there needs to be different businesses to meet consumer needs. Are you a “beer bar”? Are you a convenient corner bottle shop? Being authentic about it – and then aiming to be the best beverage business of your kind – should be part of the plan.

The Status Quo Is Always Changing The Three-Tier System and the preponderance of beverage alcohol laws and regulations around the country have served the industry and consumers quite well. We live in a golden age of beverage alcohol, with an unparalleled selection of

or not it has taken a tip credit, for any reason other than that which is statutorily permitted in section 3(m): As a credit against its minimum wage obligations to the employee, or in the furtherance of a valid tip pool.”

From the Department announcement:

of

Labor

“Section 3[m] of the FLSA, 29 U.S.C. 203[m], provides in part that an employer may take a partial credit [tip credit] against its minimum wage payment obligation to a tipped employee based on tips received and retained by the employee. The Department’s regulations limit an employer’s ability to use an employee’s tips regardless of whether the employer takes a tip credit under Section 3[m] or instead pays the full FLSA minimum wage directly to the employee.

In this Notice of Proposed Rulemaking, the Department will propose to rescind the current restrictions on tip pooling by employers that pay tipped employees the full minimum wage directly.”

As of early September, a Notice of Proposed Rulemaking – the next step in the process to rescind the regulations – has not been issued. |

products and outlets from which to purchase and/or enjoy those products. But to say that things are static would be misleading.

A handful of states – Indiana, Maryland and Massachusetts immediately come to mind – are in the process examining their alcohol laws through formal panels and study committees.

Still more states have recently completed reviews, and other states can be expected to conduct their own in the not-toodistant future.

This means that retail beverage licensees will need to continue working to educate regulators and policy makers about the service they provide. They will need to explain the role they play in the American beverage alcohol ecosystem, which is the envy of the world. They will need to anticipate and plan for changes – just like the iPhone – that would have been unthinkable ten years ago.

Most importantly, licensees need to determine what they want their businesses to look like in another ten years and then figure out a way to get there legislatively, regulatorily and business-wise. Recognizing strengths, and having these conversations now before market, regulatory and legislative forces force retailers’ hands, is the only way to prepare for sustainable future success.

It’s still vitally important to defend what has made independent beverage alcohol retailers successful and an asset to our country, but now is also the time to go on the offensive and make the asks that will allow you to continue to create jobs, sustain a family business and do your part in maintaining the civic fabric of your communities. |

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industry voices Recent Court Rulings Continue to Uphold Primary State Authority & Three-Tier System

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ver the spring and early summer, a host of important court rulings have upheld important three-tier system principles like primary state authority and the strict enforcement of tied-house laws.

CRAIG WOLF President & CEO Wine & Spirits Wholesalers of America

In this column, I’d like to update you on a few case highlights, each that supports the authority and importance of the three-tier system and state authority over licensees.

Retail Digital Networks In June, the U.S. Court of Appeals for the Ninth Circuit, in a 10-1 rare en banc decision, reinforced the legitimacy of the three-tier system of distribution and state authority under the Twenty-first Amendment.

At its heart, the case, Retail Digital Network, v.

Prieto tested a state statute prohibiting inter-tier payments for advertising, and underscored the importance of consumer protections provided by the three-tier system. In its ruling, the court stated that the law in question “serves the important and narrowly tailored function of preventing manufacturers and wholesalers from exerting undue and undetectable influence over retailers. Without such a provision, retailers and wholesalers could side-step the triple-tiered distribution scheme by concealing illicit payments under the guise of advertising payments.”

This was an issue that WSWA and other beverage alcohol industry groups strongly supported. WSWA, NBWA and a host of other organizations submitted amicus briefs to the court. The ruling echoed our arguments and made clear the constitutional protection for the three-tier system and especially the tied-house regulations implemented by state regulators as a means to effectively govern the industry and prevent abuses.

Lebamoff Enterprises Another important case arose in Illinois. In the case of Lebamoff Enterprises v. Rauner, a federal district court judge held that state law prohibiting an out-of-state retailer from directly shipping beverage alcohol to an in-state consumer, did not violate the U.S. Constitution’s Commerce Clause. This ruling also reinforced the important consumer protection and regulatory benefits of the three-tier system and the primary authority of a state regulatory entity to enforce the law over companies under its jurisdiction.

This case is significant because it prohibits outof-state retailers from operating outside the

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authority of the state’s beverage law agency, and ensures that there is no unfair advantage to outof-state direct shippers.

In the ruling, the presiding judge noted that “plaintiffs’ claims of discriminatory treatment is an attempt to circumvent the Illinois statutory scheme designed to protect the Illinois public”—a clear victory for the well-regulated three-tier system in which ABL and WSWA members operate. This case has been appealed to the U.S. Court of Appeals for the Seventh Circuit. WSWA and other industry groups are exploring the potential for amicus briefs in support of the earlier ruling and the principle of primary state authority.

Cadena A third case generating attention came from Texas.

In Cadena v. Texas Alcoholic Beverage Commission, a Mexican convenience store chain attempted to obtain a Texas retail wine and beer off-premise licensed as part of its planned expansion into the Texas market. Texas ABC denied the application after finding that the chain’s parent company held a non-controlling interest in companies that held Texas manufacturer permits—a violation of state tied-house laws. Under Texas law, members of one tier of the alcohol industry may not hold any interest in a member of another tier.

The Texas Supreme Court issued a ruling supporting lower state court findings that the ABC ruling was lawful. The state high court held that the term “interest” should be interpreted broadly and would include a relationship such as the one between the retail chain and its parent company ownership. Importantly, the court found that actual control was not necessary for the statute to apply.

These rulings uphold key principles of the three-tier system that ABL, WSWA and so many industry allies support: primary state authority and strict enforcement of tied-house provisions.

These principles undergird a system that delivers the widest array of products available anywhere in the world in a manner that protects public safety, ensures regulatory oversight and tax collection, and guarantees product integrity.

While new cases will surely arise in the days ahead, our adherence to these principles will not change and we will continue to work with industry partners to uphold them. |

industry voices Analyzing a Rapidly Changing Beer Industry to Address Familiar Challenges

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rewer-owned tasting rooms and taprooms want to stay open until 1:00 AM, and want existing independent retailers to carry their products, too. They want to sell food and compete directly with licensees that have painstakingly built their brands, as well as the hundreds of new brewers that consumers enjoy.

CRAIG PURSER President & CEO National Beer Wholesalers Association

Increasingly, the beer industry is experiencing tension between divergent economic interests.

Breweries (big and small), wineries and distilleries are trying to steer more consumers into their direct-to-consumer sales channels. These drinking occasions do not take place in taverns, restaurants and stores of existing ABL members.

Yet alcohol consumption per capita is stagnant.

So, something must give.

The U.S. economy has grown for 100 consecutive months, quickly becoming one of the longest economic expansions on record (the current record is from March 1991 to March 2001 at 120 months). Since June 2009, the economy has added 16 million jobs; growing at a 1.7 percent CAGR. Almost 90 percent of these new jobs are in the service sector, with retail, business services and health services leading the way. Jobs in manufacturing and construction account for less than 10 percent of gains during the current expansion; but there is a subset of the general economy that shines brighter than the general employment trends: Alcohol beverages.

In 2010, the United States had 2,343 permitted breweries*, 609 permitted distillers and 6,851 permitted wineries for a total of 9,803 permitted manufactures. All together, they employed approximately 75,000, according to the Bureau of Labor Statistics. Fast forward to June 2017, the United States boasts more than 8,300 permitted breweries, 2,341 distillers and 12,604 permitted wineries for a total of 23,246 permitted manufactures of alcohol beverages— more than double the number of manufactures in just seven years. Employment grew from roughly 75,000 people in 2010 to more than 146,000 in June 2017, for an 8.1 percent CAGR. During this time, per capita consumption has remained flat.

*Permitted breweries includes those outlets that have secured a brewer’s permit from TTB; these are not actual breweries in production.

Demographics are driving the economics of alcohol beverage. For 2017, almost one in four people in the country are 21 or older. While the majority of the millennial generation older than 21, there are still 12,000 new consumers turning 21 years of age every day. These new consumers are changing the landscape of retail every day and helping to create a new, innovated and fragmented marketplace—a new marketplace

that is impacting independent licensed alcohol beverage retailers in more ways than we may realize. Consider that the industry has not seen a real or measurable increase in total alcohol consumption. In fact, when we measure the total demand for alcohol on a per capita basis from 2000 to 2016, the total quantity is fixed around 2.5 gallons per person 21 years of age and older.

In short, more outlets and more choice do not create greater demand for alcohol.

Alcohol is a Significant Part of this Economic Expansion and that is Not Going Unnoticed With so much economic and demographic activity surrounding the alcohol industry, it is no surprise that the public and private sectors are taking notice. At the federal level, the Small Business Administration has issued loan approvals for more than $1 billion to support small alcohol producers. State-sponsored economic development has seen similar trends. While much more difficult to track, hundreds of millions of dollars in state economic development monies, including basic tax abatements, are identified by the Good Jobs First Subsidy Tracker Database.

Finally, the proliferation of alcohol tourism is impossible to ignore with seasonal festivals and beer, wine and distillery trails; many of which are sponsored and promoted by state and local economic and tourism offices.

Interest in this changing marketplace is at an alltime high. Manufacturers are expanding retail channels with on-premise tasting rooms and togo sales. Direct to consumer sales at taprooms and brewpubs grew by more than 50 percent in 2017, according to data from the U.S. Tax and Trade Bureau. The fragmentation of the industry continues into new retail channels as laws change—salons and barber shops serve free beer and wine without a license, if the drinker is of age and purchasing a service; and movie theaters and golf driving ranges see alcohol beverage sales as a significant way to increase revenues.

Independent Retailers and Independent Distributors Need to Work Together The competition for consumer time and dollars is heating up as we head into the final months of 2017. New retail channels will continue to pressure existing independent alcohol beverage retailers, increasing the importance of distributor partners at the local and state level.

Distributors will be key to helping independent retail businesses excel during these changes. |

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guest spotlight Time Is Right to Reform the Federal Beer Excise Tax

S JIM McGREEVY President & CEO Beer Institute

eptember is officially here, which means that both Congress and President Trump have returned to Washington, DC after leaving town for much of August. Congressional leadership and the president have set out a broad agenda over the next several months, and they both agree that a top priority will be reforming our nation’s tax code.

Paulsen, R-Minn., and Ron Kind, D-Wis. the legislation has already garnered 252 bipartisan cosponsors in the House of Representatives and 46 bipartisan cosponsors in the Senate. All of these members of Congress support a fair tax structure and modernized regulations that will allow the beer industry to continue to innovate, create jobs, and grow the economy.

Fortunately, there is legislation that has bipartisan support to reform an outdated tax structure.

The Craft Beverage Modernization and Tax Reform Act (S. 236/H.R. 747) is bipartisan and comprehensive legislation that provides fair and equitable reform of the federal excise tax on beer that will provide tax relief to all brewers and beer importers.

Reforming our nation’s tax code is a mammoth effort. As Congressional leadership begins to transform the discussion of tax reform into a final bill, they should look at ideas that have broad support.

From the barn to the bar, our nation’s brewers and beer importers support more than 2.2 million American jobs and generate more than $350 billion in economic activity. The beer industry today includes nearly 5,000 breweries in operation in the United States – the highest total since the 1870s.

However, even though brewers, importers and retailers are working to make sure that consumers have a choice of beer styles and brands, an outdated tax code is preventing the beer industry from reaching its full economic potential.

Originally signed by President Abraham Lincoln to help fund the Civil War, the federal excise tax on beer has increased 1,800 percent from when it was adopted to its current rate. In fact, it has been 25 years since the federal beer excise tax was last changed. Today, on average, more than 40 percent of what American beer drinkers pay for a beer goes towards taxes.

The beer industry has never been more dynamic, and the Beer Institute’s member companies work closely with on- and off-premise retailers to meet the demand for our nation’s most popular alcohol beverage. However, the excessive and burdensome tax rates that brewers and beer importers are forced to pay prevents the industry from meeting its full potential by reinvesting in operations through technology and innovation.

The Craft Beverage Modernization and Tax Reform Act is a sensible solution that will benefit everyone whose job depends on a vibrant and innovative beer industry.

Introduced in January by Senators Ron Wyden, D-Ore. and Roy Blunt, R-Mo., and Reps. Erik

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The Craft Beverage Modernization and Tax Reform Act is one such proposal. The legislation has the support of the entire beverage alcohol supplier sector, including the Beer Institute, Brewers Association, Distilled Spirits Council of the United States, American Craft Spirits Association, Wine Institute and WineAmerica.

Several important ally organizations have backed the legislation as well, including the American Farm Bureau, Can Manufacturers Institute, Glass Packaging Institute, National Association of Manufacturers, National Barley Growers Association, National Beer Wholesalers Association and the Wine and Spirits Wholesalers Association.

It is hard to find many ideas that both Democrats and Republicans from California to Georgia agree on, but policy makers at all levels understand that brewers and beer importers are helping to create and support jobs, and our country needs a tax system that benefits this industry instead of hindering it.

Beer brings people together. Whether it is gathering with friends and coworkers at the end of the day or home with friends and family, responsibly enjoying a beer enhances all occasions. Congress and President Trump have an opportunity to create a tax code that will spur economic growth. Brewers, beer importers, suppliers as well as on- and off-premise retailers are a critically important part of the U.S. economy. We will all benefit from passage of this commonsense legislation. |

guest spotlight Did Amazon Just Kill Liquor Retail As We Know It?

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his summer, Amazon moved one giant step closer to world domination and disruption of several industries – including beverage alcohol.

BRAD ROSEN CEO Drync

With it’s pending acquisition of Whole Foods, Amazon will gain more than 330 new liquor licenses across 41 US states, undoubtedly shifting the way consumers shop for beverage alcohol in store and online.

At the center of it all, will be mobile. Amazon is admittedly now a “mobile first” company - more than 72% of their customers buy on mobile today.

Let’s consider the impact of this: Amazon accounts for 40% of all e-commerce and 64% of U.S. households are Amazon Prime subscribers.

So, when Amazon says they are mobile-focused, you can be certain your competition is not just down the street, or on the web, it is in your customers’ pockets.

Amazon’s Whole Foods acquisition also aggressively furthers its development into physical retail. Amazon is poised to redefine brick and mortar shopping, making it a seamless omni-channel experience — they have already started with Amazon Go stores in test markets like Seattle.

And consumers want this: 77% of U.S. shoppers are already using their smartphones to help them shop while in a store.

Convenience and low-pricing — enabled by efficiencies, economies of scale, ultra fast delivery, and personalized service: THIS is the new retailer paradigm and Amazon is taking us there, whether we want to go or not.

Let me paint a picture for you: Imagine Whole Foods filled with products 40% cheaper than they are today and no checkout lines. Consumers simply walk out the door with bags full of groceries and their credit cards get charged automatically.

Alternatively, consumers order from their phone or laptop and everything is delivery, or packaged and ready for pickup at a kiosk or drive-thru.

Regardless, they just spent 50–75% less time shopping at a fraction of the price.

So, what does this mean for beverage alcohol? First, let me re-iterate that 330 Whole Foods across the U.S. sell wine. If one is in your state and you own a liquor store, it is time to start

thinking hard about how you are going to keep your customers.

For several years, Amazon has been perfecting the art of local delivery with Amazon Fresh and Amazon Prime Now. The Whole Foods acquisition gives them delivery hubs nationwide to aggressively compete on grocery and alcohol delivery.

Their market saturation dwarfs even the largest same-day grocery delivery competitors like Peapod and Instacart (10% owned by Whole Foods, btw), not to mention the smaller alcohol delivery players. And with 80% of Amazon users purchasing at least once a month, their user retention blows just about everyone out of the water.

How in the world do you compete with this?

The short answer is: customer experience.

89% of executives believe that customer experience will be their primary mode of competition this year. Consumers not only expect their shopping experience to be seamless and pleasant — they expect to be “wowed.”

To stand out, you not only have to go above and beyond, you need to be where your customers are, which in large part is on their phones.

Americans spend a whopping 90% of their digital time on their phones, and 87% of that time they are using apps.

Having your own mobile app allows consumers to buy quickly, easily, and at their convenience.

This is what consumers have come to expect.

Furthermore, mobile data also gives you valuable insights to help you stock items that sell, offer targeted, relevant promotions and drive repeat traffic to the store.

Drync makes white label apps specifically for liquor retailers and has seen top-line sales grow by 4% YoY after app launch — a meaningful number for most. (Read: https://medium.com/@drync) I’ve witnessed many major societal “tipping points” in my time — moments in time where technology and new thinking have caused a substantial shift in the way humans interact with the world around them. What Amazon did this summer will have similar, far-reaching implications for generations to come in terms of convenience, spend, and how we interact with brands. A huge part of this will involve mobile.

If you are not on mobile, consumers will find someone else who is. |

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homefront Trade Practices & The Modern Beverage Alcohol Industry: Striking the Right Balance

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s defined by Merriam-Webster Dictionary, “trade practices” are a “method of competition, operating policy (as the use of standards of size, shape, and quality of materials), or business procedure common to members of a line of business or industry that may be formally adopted sometimes as a rule under government auspices.”

Within the highly-regulated ThreeTiered System that defines the American beverage alcohol industry, trade practice laws have been implemented both at the federal and state levels to ensure a level playing field for all participants producers, distributors and retailers alike – while also striving to strike a balance between a free market and legitimate concerns over public health and safety.

At the federal level, the Federal Alcohol Administration Act of 1935 includes provisions that “regulate the marketing promotional practices concerning the sale of alcohol beverages; and regulate practices such as exclusive outlets, tied house arrangements, commercial bribery, and consignment sales.”

States also take an active role in regulating trade practices - though in many instances these prohibitions are included in larger consumer protection statutes. They apply to a wide range of businesses and are not necessarily specific to the beverage alcohol industry.

For beverage retailers, these long-held trade practices assist them in maintaining their independence within the system by preventing producers and distributors from unduly interfering with retail operations. In the past year alone, we have seen multiple instances of trade practice violations across the country, including in: California: An enforcement action alleging trade practice violations against a beer wholesaler was recently settled.

Florida: TTB investigated an alleged “pay-to-play” scheme in the state, and is the largest trade practice enforcement operation that TTB has initiated to date.

Massachusetts: The Alcoholic Beverages Control Commission initiated an enforcement action against an Anheuser-Busch InBev (ABI)-owned distributor in connection with an alleged pay-to-play scheme.

New Jersey: Following trade practice violations leveled by the state’s Division of Alcoholic Beverage Control, a beer

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wholesaler agreed to pay roughly $2 million in fines.

While trade practice laws within the industry cover a wide range of topics, there are two which are paramount to ensuring a healthy, level playing field for beverage alcohol retailers: exclusive outlet and tied-house.

Trade practice laws related to “exclusive outlet” prevent a producer or distributor from requiring a retailer to exclusively purchase their products and/or prohibit the retailer from purchasing products from other producers or distributors.

Further prohibited is “exclusion in part,” which, for example, would prevent a producer or distributor from requiring a tavern or bar to purchase all draft products from one company and bottled or canned products from a different company.

“Tied house” regulations prevent crossover within the Three-Tiered System – keeping retailers separate from the producer or distributor tiers. In the current beverage alcohol industry, there have been an increasing number of questions raised when it comes to tied house laws – often centered around the rapid growth of tasting rooms and producer facilities.

By and large, the retail tier – both onpremise and off-premise – has been supportive of the recent growth of small brewers, vintners and distillers.

But it’s important to keep in mind what has brought us to this “Golden Age” of beverage alcohol: a well-defined Three-Tier System flowing from the language of the 21st Amendment to the Constitution. States, with their ability to determine the best laws and regulations for their residents and businesses, have proven to be successful arbiters of alcohol law.

This is not to say, however, that change has not (and will not) continue to occur in the industry. Incremental, consensusdriven change to an industry that has made so many so happy, is a tried and true approach. Attempts to entirely circumvent established and effective norms have the potential to harm what has otherwise been a true American success story.

Beverage retailers are preparing for, and already engaging in, policy debates that encompass cross-tier ownership and the policy rationale for changes to current laws in their states. When an industry entity pushes to expand their presence (and often margins) into another tier, they can expect scrutiny from regulators, legislators and their industry colleagues.

Taking a hard look at changes shouldn’t be antithetical if those involved are truly vested in the long-term viability of a diverse and vibrant beverage alcohol industry.

For the most part, beverage licensees are incredibly supportive of emerging industry companies, products and brands. But there does exist a natural hesitation when a friendly supplier partner suddenly pushes to become a supplier AND a direct competitor. Retail licensees aren’t afraid of fair competition, and compete every day in their markets with other retail businesses. But where to draw the line with emerging business models that may seem “cool” but are otherwise illegal is becoming a more frequent question.

It’s worth noting that regulators – primarily at the state level for retailers – are the ones who must balance established and important trade practice laws with market changes. They must weigh the desire for lower levels of regulation and greater operational freedom against the rules of a system that existing players have invested in, played by, and which have served most of their communities quite well. That’s a tough job, especially with shrinking budgets and multiple industry actors who all have their own idea of what’s best.

The debate is far from over as the industry grapples with what trade practice laws make sense and how we can make sure that there is an industry landscape where all players are operating on a level playing field. To this end, it is important for beverage licensees – both on-premise and off-premise – to let their voices be heard and to speak with state and local officials about the importance of the importance of maintaining and enforcing trade practice laws and regulations that govern the industry. |

convene

Save the Date

MARCH 11 13, 2018 Registration Opens October 2017 REGISTRATION INFORMATION

Registration for the 2018 ABL Annual Meeting is scheduled to open in early October. Registration will cost $299.00 and includes access to all annual meeting sessions, activites and hospitality-related events.

HOTEL INFORMATION

The 2018 ABL Annual Meeting will be held at Harrah’s New Orleans Hotel & Casino. ABL has secured a block of rooms for annual meeting attendees at a nightly cost of $229.00 + $14.99 daily resort fee (Fri-Sat) and $179.00 + $14.99 daily resort fee (Sun-Tues).

LOCATION INFORMATION

Located just blocks from the historic French Quarter, Harrah’s New Orleans Hotel & Casino provides attendees with a centralized location - with easy access to all meeting-related sessions, activites and hospitality-elated events.

WEATHER INFORMATION

Average temperatures for March in New Orleans average a high of 71°F and a low of 52°F. The city experiences approx. 16 days with sunny or partly sunny skies. Rainfall totaling more than 0.5” is rare, occurring only 2-3 days during the month.

ADDITIONAL INFORMATION

For the latest updates and information on the 2018 ABL Annual Meeting, be sure to visit ABL online at www.ablusa.org/ and click the “EVENTS” tab at the top of the homepage!

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state & industry S

TATE Connecticut: Underage Drinking Is Focus of New State Website While most in the beverage alcohol industry are aware of the numerous dangers and consequences associated with underage drinking, the general public is not as readily aware. In an effort to address these dangers headon, the Connecticut Department of Mental Health and Addiction Services (DMHAS) recently launched a new website with various information and resources for children, parents, and the public at-large.

While recent data suggests that substance abuse on the whole has decreased over the past decade, binge drinking among teens continues to be an issue. DMHAS Commissioner Miriam Delphin-Rittmon noted “It’s important that parents take the time to talk to adolescents and young adults about the dangers of underage drinking.” “Parents play a vital role in preventing their children from engaging in underage drinking and other risky behaviors. A close connection to a caring adult helps to keep them healthy and safe, both physically and emotionally.”

Georgia: Savannah to Revise “Bar Card” Ordinance and Enforcement An ordinance that went into effect in Savannah, GA in early 2017 is set to be revised following confusion over, and concern with, how the ordinance was written. As originally passed, the ordinance requires “persons employed as managers, servers, bartenders, door persons, or anyone handling, serving, mixing or dispensing alcoholic beverages in Class A, C or H licensed establishments” to obtain a “service permit.”

To obtain the service permit, individuals must complete a background check, an alcohol safety and training course, submit an application to the city, and pay a $45 processing fee. Based on a review of the city’s website, it appears that both the required “bar card” and enforcement of the service permit provision have been placed on hold until issues and concerns are resolved.

Illinois: Fatal Crashes in State Down 20 Years After .08 Law In 1998, the state of Illinois enacted new legislation which lowered the legal

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threshold for driving under the influence of alcohol to 0.08 BAC. In the nearly 20 years since, the state has seen a decrease in alcohol-impaired car crash fatalities by more than 40 percent. Prior to the passage of the 1998 law, the BAC threshold for DUI in the state was 0.10.

New York: NYC Council Committee Passes “Night Mayor” Bill The Consumer Affairs Committee of the New York City Council recently passed a bill that would establish an “Office of Nightlife” that would be led by a “Night Mayor.” Inspired by similar positions in cities such as Amsterdam, Paris and London, NYC’s Nightlife Mayor would be responsible for overseeing latenight businesses, assist these businesses with navigating the city’s complex bureaucracies, and work to develop new policies and initiatives benefiting the nightlife community.

“This bill accurately reflects the diversity of the NYC nightlife scene and makes it possible to recognize the contributions these spaces make,” said City Councilman Rafael Espinal, who introduced the bill.

Oklahoma: State’s Cigarette Tax Ruled Unconstitutional In early August, the Oklahoma Supreme Court ruled that S.B. 845 – which sought to add a $1.50 per pack “assessment fee” on cigarettes – is unconstitutional, arguing that the bill did not follow established requirements for tax increases or revenue raising measures in the state. The measure was opposed by retailers, distributors and consumers. In response to the court’s ruling, Oklahoma Governor Mary Fallin has discussed the possibility of calling a special session to resolve the issue.

In its ruling, the court noted that “as a threshold matter, Petitioners present compelling contextual evidence in support of their claim that the Legislature’s primary purpose in enacting SB 845 was to raise new revenues. The State Respondents urge us to ignore that evidence, and understandably so; it strongly indicates SB 845’s passage was motivated by the Legislature’s need to raise revenue so that it could satisfy its constitutional obligation to enact a balanced budget.”

Texas: Retailer Set to Match Hurricane Harvey Donations In effort to help with recovery from Hurricane Harvey, Twin Liquors, based in central Texas and co-owned and operated by longtime ABL member David Jabour, recently announced it would match up to $20,000 in donations from customers.

“It’s very important for us to support those in need and we want to do everything we can to provide relief to the storm-torn communities and families of Texas,” said Margaret Jabour, vice president of Twin Liquors. “We encourage customers to come out and support those affected by this devastating hurricane.” All proceeds raised – including the matching of donations – will go to the American Red Cross.

Utah: Liquor Stores Testing New Retail Technology That Could Improve Selection Under a program piloted by the Utah Department of Alcoholic Beverage Control (DABC), three liquor stores in the state are using new technology to track sales patterns at the stores, in the hope that the system will improve the current ordering system used by the state. The system – dubbed “Symphony” – not only analyses sales figures, but also tracks potential sales in various pricepoints and types of beer, wine and spirits.

DABC Executive Director Sal Petilos noted “We can look at what SKUs (products) don’t exist at a store, but have the highest sales potential. In many cases, the products in the weak category — like a pinot noir in the $20-$30 range — already are in stock at the state warehouse and could be sent to the store to improve availability and selection.”

The piloted program will be reviewed by the state liquor commission in the fall, and will decide at that time whether to roll out the system statewide.

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NDUSTRY Transparency in Music Licensing and Ownership Act The MIC Coalition, a partnership of associations (including ABL) committed to a transparent and sustainable music licensing system, announced its enthusiastic support for bipartisan legislation introduced by Rep. Jim Sensenbrenner (R-WI) to establish a

state & industry searchable, digital database of historical and current copyright ownership and licensing information.

The Transparency in Music Licensing and Ownership Act is a major step forward in creating a music licensing system that is open and accessible to those who both own and license music.

The proposed legislation would create for the first time a public database that provides all stakeholders in the music marketplace with access to authoritative and fully searchable records of music ownership and licensing information, free-of-charge to users and updated in real time.

The MIC Coalition, which represents millions of entities across the nation that support artists and songwriters through their promotion and licensed use of music, believes that transparency is a necessary baseline in creating a more sustainable and equitable system.

This legislation is an essential step to promoting a vibrant economy for music and greater fairness in the music marketplace overall.

With Millennial Tastes Shifting, Beer Loses Market Share to Spirits and Wine In late July, Goldman Sachs released a new report which noted that Millennials are increasingly moving away from beer (both micro- and macro-brews) in favor of wine and spirits. At the macro-brew level, sales have decreased nearly 3 percent, with micro-brew levels falling roughly 2.5 percent over the last year.

Conversely, sales of wine are expected to grow by over 1 percent, and sales of

spirits are expected to increase by more than 2.5 percent.

There is, however, a silver lining when it comes to the beer sector: the imports are projected to grow more than 7 percent in 2017 (and a further 6 percent in 2018).

Casino Industry Doubles Down on Responsible Gaming Initiative In early August, the American Gaming Association – the casino and gaming industry’s largest lobbying group – issued new guidelines which it hopes will promote responsible gambling. The new guidelines urge gaming operators to provide additional training for their employees, while also increasing transparency with respect to gaming patrons.

“We appreciate that this is an issue that must be top-of-mind industry-wide for all employees, from those that interact daily with consumers on the gaming floor to the senior executive leadership and the boards of directors,” noted Elizabeth Cronan, American Gaming Association Senior Director of Gaming Policy.

Visa’s War on Cash Is a Thing Whether you realize it or not, it is becoming increasingly clear that Visa has declared a war on cash. And who could blame them, really? Every purchase a consumer makes using cash is one less transaction that could be processed

by Visa. In formalizing this war, the company recently launched a pilot program to provide up to 50 businesses with $10,000 to upgrade their payment systems – on the condition they stop accepting cash.

putting cash out of business. Globally, payments by cash and check are actually increasing. Americans still use physical dollar bills in 32% of transactions, and [we] want to change that.”

How Do You Build a Drunk-Driving Program That Works? Focus on the Alcohol Many drunk-driving initiatives used by court systems across the country tend to focus on the individual’s driving, in that offenders have their driving privileges revoked, their ability to operate a motor vehicle restricted to certain hours, or have some form of interlock device installed in the vehicle. While many of these initiatives were implemented with good intentions, research suggests a new approach is highly effective (and equally controversial): restricting an offender’s access to alcohol in the first place.

Called “24/7 Sobriety,” the program is the brainchild of Larry Long, a former county prosecutor from South Dakota.

Under the program, offenders had their drinking monitored on a daily basis (typically in the mornings and evenings), and any individuals found to have consumed alcohol would immediately be arrested and held in jail for anywhere from 12 to 36 hours.

In the decade since the program was initially launched, it has been adopted by a number of other jurisdictions – both within the state and elsewhere, with impressive results: more than 99 percent of daily tests are passed by offenders in the program. By requiring alcohol to be removed from their lives – or face the immediate penalty of short-term incarceration, program participants were far less likely to be arrested for any offense (alcohol or otherwise) one, two and three years after completing the program. |

Speaking to the Wall Street Journal, Visa CEO Al Kelly noted “We’re focused on

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American Beverage Licensees 5101 River Rd, Suite 108 Bethesda, MD 20816 (888) 656-3241 www.ablusa.org info@ablusa.org

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American Beverage Licensees is the preeminent national trade association for retail alcohol beverage license holders across

the United States. Its members are comprised of on-premise and off-premise retailers who annually help infuse billions of dollars into the American economy. ABL represents the interests of American small business owners and a historical part of the American way of life. Many members are independent, family-owned operators who assure that beverage alcohol is sold and consumed responsibly by adults. | DIAMOND

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