18 spring Insider (FINAL)

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

ABL INSIDER VOL. 12, NO. 1 | SPRING 2018

A PUBLICATION OF AMERICAN BEVERAGE LICENSEES

Naviga�ing �he Fu�ure 2018 ABL Annual Meeting Preview ISSUE March 11-13 Legislative Updates (p. 6-7)

Speaker Spotlight (p. 12-13)

Session Spotlight (p. 14-15)

VOL. 12, NO. 1 | SPRING 2018

contents

3 working for you

ABL Statement on NAS Report on Alcohol-Impaired Driving

4 leading

Join Us in New Orleans for the 2018 ABL Annual Meeting

10 meeting highlights

Keynote Address: Tom Cole, Republic National Distributing Co. Top Shelf Award: Mark Brown, Sazerac Company, Inc.

11 out & about

Your Going-Out Guide to New Orleans

5 where we stand

12-13 speaker spotlight

Taking It to the States

Annual Meeting Speaker Bios & Background

6-7 legislative updates

Changes in the Tax Cuts & Jobs Act of 2017; Music Licensing Database Bill Adds Cosponsors in House

8 industry voices

Craig Wolf, President & CEO, WSWA

14-15 session spotlight

Annual Meeting Session Overviews

16 associate & affiliate members

9 industry voices

Craig Purser, President & CEO, NBWA

industry calendar

February 2018

May 2018

Sociable City Summit: Learn How to Plan & Manage Nightlife in Your City

Massachusetts Package Stores Association Annual Spring Event

February 18-20 | New Orleans, LA

March 2018

2018 Beverage Alcohol Retailers Conference

2018 ABL Annual Meeting

June 4 | Auburn, IL

March 18-20 | Arlington, VA

Illinois Licensed Beverage Association Annual Golf Outing

NABCA 25th Annual Symposium on Alcohol Beverage Law & Regulation

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

April 2018

April 9-12 | Milwaukee, WI

TWL 83rd Annual Spring Conference & Trade Show NBWA Legislative Conference

Illinois Licensed Beverage Association Legislative Lobby Day

April 30 | Las Vegas, NV

September 16-18 | Spring�ield, IL September 23-26 | San Diego, CA NBWA 81st Annual Convention

September 24-27 | Sitka, AK

WSWA 75th Annual Convention & Exposition

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Connecticut Package Stores Association Golf Tournament

Illinois Licensed Beverage Association 133rd Annual Convention

April 25 | Spring�ield, IL

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June 13 | Monroe, CT

September 2018

April 22-25 | Washington, DC

editor MATTHEW EVANS

June 2018

June 3-5 | Denver, CO

March 11-13| New Orleans, LA

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

May 9 | Randolph, MA

Alaska CHARR Convention ISSN# 2331-6594

(c) 2018 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

working for you ABL Issues Statement on NAS Report on AlcoholImpaired Driving; State & Local News Archive Now Available to Members

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BL Issues Statement on NAS Report on Alcohol-Impaired Driving On January 27, 2018, ABL Executive Director John Bodnovich issued the following statement regarding the National Academy of Sciences (NAS) study “Getting to Zero Alcohol-Impaired Driving Fatalities: A Comprehensive Approach to a Persistent Problem”.

contributions of the alcohol industry – and any groups that receive funding from the industry – when it comes to fighting impaired driving.”

“To suggest that local bars, taverns and package stores have no role to play in this fight ignores those who are already on the front lines of preventing impaired driving and limits our societal efforts to address this problem.”

For more than five years, ABL has brought ABL Weekly subscribers a widerange of news stories on topics and issues specific to each state, including: licensing initiatives; regulatory developments; direct-to-consumer shipping; three-tier issues; marijuana legalization; Sunday sales; impaired driving; grocery and convenience store sales; mobile alcohol ordering and delivery; and more.

“Along with groups focused on public safety who support the strong enforcement of the .08 BAC level, ABL opposes the study’s call to arbitrarily lower the BAC limit to .05. Doing so would effectively criminalize the activities of law-abiding, responsible social drinkers.

It would also dilute current efforts to stop repeat offenders and those who drive with a BAC of nearly twice the legal limit, who represent the majority of drunk drivers.”

“Independent beverage business owners, with strong ties to their local communities, have long been engaged in efforts to oppose and stop drunk driving.

They view themselves as partners with policymakers, local law enforcement and other stakeholders committed to addressing impaired driving.”

“Therefore, it is disappointing that much of today’s report takes a step back, instead of a step forward, in addressing the complexities involved with impaired driving. The report reflects a battery of recycled recommendations and, more disturbingly, represents a squandered opportunity to be inclusive and forwardlooking when it comes to drugged and distracted driving.”

“It also raises serious questions about what the $2 million spent on the report could have funded to more directly address impaired driving.”

“Perhaps most troubling is the study’s unserious suggestion to reject meaningful

“Despite the tone and recommendations in this report, beer, wine and spirits retailers will seek to build on the historic decline in alcohol-related traffic fatalities over the past three decades. Beverage licensees will continue to work within their communities and with public officials to support effective drunk driving policies while opposing those that undermine the important steps already taken in this fight.”

State & Local News Archive Now Available to ABL Members As part of a growing effort to assist its state affiliate members with information and resources, ABL recently announced that it has launched a new State & Local News Archive.

The archive provides ABL members with a repository of state and local news stories pulled from past issues of the ABL Weekly, the association’s weekly e-newsletter, and is the most recent addition to the content-rich membersonly section of the association’s website, www.ablusa.org.

The archive currently contains all ABL Weekly state and local news stories from 2017, and will be updated on a monthly basis to provide members with the latest news from their respective states.

“ABL is focused on addressing the needs of our state association members and one of those needs is for reliable news and information from other states where similar policy and regulatory debates are taking place,” said ABL Executive Director John Bodnovich. “This archive is another resource that will assist ABL members as they interact with members of the media, state and local legislators, government agencies and state regulators.”

In addition to the State & Local News Archive, ABL also released a Policy News & Updates Archive, containing national and regional policy updates on such topics as music licensing, swipe fee reforms, BAC regulations, tax reform, and employment regulations. |

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leading Join Us in New Orleans for the 2018 ABL Annual Meeting

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STEVE MORRIS President American Beverage Licensees

s ABL prepares to travel down to New Orleans for the ABL Annual Meeting, I wanted to take this opportunity to highlight some of the great programming that we have put together for attendees.

Honors Gala om Monday, March 12 in recognition of all that Mr. Brown has done for the industry and his community.

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Taking place March 11-13, 2018 at Harrah’s New Orleans Hotel & Casino in New Orleans, Louisiana, we have been hard at work putting together an exciting program that will focus on a range of issues affecting on- and off-premise beverage licensees and their businesses.

With over 10 educational sessions, nearly 20 speakers, and multiple hospitality events and networking opportunities planned, the ABL Annual Meeting is sure to provide attendees with multiple takeaways that retailers will be able to apply directly to their businesses.

Highlights of the program we have in store for attendees include:

The Brown-Forman Retailer of the Year Awards will be presented on Monday, March 12 during the ABL Honors Gala.

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Keynote Address The 2018 ABL Annual Meeting Keynote Address will be delivered by Tom Cole, President & CEO of Republic National Distributing Company. Mr. Cole’s will share his unique perspective on industry issues, including the recently announced merger of RNDC with Breakthru Beverage Group.

Networking Opportunities The ABL Annual Meeting is the association’s marquee annual event and provides beverage retailers with the ability to share their insights and experiences with fellow retailers.

Whether it’s sharing strategies for running a successful business over a cocktail or at one of the hospitality-related events, attendees can pick-up valuable ideas for improving their businesses.

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Emerging Trends ABL prides itself on providing its members with the latest information on a range of issues directly impacting their businesses.

To this end, attendees will hear from experts on issues and topics including traffic safety, impaired driving policy, music licensing, recreational marijuana regulation, news on the beer business, and more!

I would also like to take this opportunity to thank the members of ABL’s Annual Meeting & Fundraising Committee for their hard work and dedication to ensuring a first-class annual meeting: Andy Abernathy; Peter Bouharoun; Dan Clausner; Terry Harvath; James Hurston; David Jabour; Bob Kreston; Jeff Kreston; Paul Santelle; and Ben Weiner – as well as ABL staff members John Bodnovich, Susan Duffy and Matt Evans.

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ABL Top Shelf Award Established in 2005, the ABL Top Shelf Award recognizes and honors individuals who have demonstrated excellence throughout their career in the beverage alcohol industry.

Past recipients have included representatives of the supplier and wholesale tiers, from within an association, or in a broader role within the industry.

In closing, I just want to reiterate that I strongly encourage all ABL members to plan on joining us in New Orleans for the 2018 ABL Annual Meeting. I look forward to heading down from Montana next month to enjoy all that New Orleans (and the ABL Annual Meeting) have to offer, and I sincerely hope to see you there! |

This year, ABL will honor Mark Brown, President & CEO of the Sazerac Company, Inc. with the Top Shelf Award at the ABL

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Retailer of the Year Awards Since ABL was established in 2002, the Brown-Forman Retailer of Year Awards have been an integral part of the ABL Annual Meeting. Presented to retailers nominated

by ABL’s state affiliate members, the Retailer of the Year Awards recognize beverage retailers who have demonstrated excellence in responsible and innovative retailing. These recipients often serve as leaders within their local communities and strive to exhibit responsibility in beverage retailing.

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where we stand Taking It to the States

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JOHN BODNOVICH Executive Director American Beverage Licensees

BL’s mission has always been to represent its members at the federal and national levels.

This means that ABL devotes time and resources to talking with members of Congress and others in the federal government about the issues that matter most to its members. With the association headquartered just outside of Washington, DC, ABL staff can easily voice its views and concerns to legislators on a regular basis.

When it comes to state alcohol issues, ABL has long fought to preserve the 21st Amendment and the rights of states to determine how beverage alcohol is commercially handled within their borders. This has been the underpinning of a national association whose members operate in regulatory environments with as many as 50 different sets of state laws.

What seems like a good idea to beverage retailers in one state may (for good reason) be a bad idea for retailers in a neighboring state, and ABL respects those unique differences that empower local lawmakers, regulators and beverage industry businesses.

Given the cultural and societal differences of states and their residents, it only makes sense that they would treat beverage alcohol, with the traditional role it plays in culture and society, in a similar fashion. Aesthetically, it’s also nice to know that there are still local customs and culture that sustain vibrancy – despite an increasingly globalized and homogenized world.

For those who lament that the current system is stifling progress, one needs only look at the remarkable growth of producers, brands, consumer choice and value that pervade the retail alcohol marketplace today. Far from an impediment, the current system has empowered start-ups and fostered a “Golden Age” of beverage alcohol, where now the enviable problem seems to be too many choices.

Sharing Information, Perspective While ABL spends much of its time on advocating on federal issues, intensifying scrutiny of state and local laws by public bodies and private interests – within the industry and from the outside – seek to bend laws and regulations to suit their business models. As a result, this has caused state legislators, regulators and elected leaders to look more closely at existing laws and seek to “benchmark” how they measure up to other states.

A common refrain I hear from ABL members is that they are constantly told how antiquated and out-of-touch their state alcohol laws are compared to other, more enlightened places.

Belying these confident proclamations is, more often than not, a dearth of actual facts and reliable information.

To combat myths and assumptions that are sometimes taken as gospel in these debates, ABL looks to the reach and the expertise of its members and state affiliates (who know their state alcohol laws better than just about anyone) to compile information and data on laws and regulations so that state alcohol policy debates are based on fact, not fiction.

ABL has also increased its efforts to travel to brief state officials on what the “norms” are when it comes to beverage alcohol laws in other states, while also providing a national perspective. In December, ABL was invited to brief the Maryland House of Delegates Committee on Economic Matters on alcohol licensing and regulatory issues in other states.

This opportunity to frame the issues Maryland legislators and beverage retailers are working on, in the context of what is taking place in other states, is helpful to everyone involved.

Coming Together with Industry Another point of collaboration on state issues has been to work with other alcohol industry trade groups that share ABL’s concerns about alcohol policy and regulatory matters.

Opposition to threats to increase alcohol taxes are just one area where ABL and its state affiliate have come together on issues at the state and local level. Working with likeminded groups, such as the Distilled Spirits Council and other trade associations opposed to raising alcohol taxes, has prevented business-sinking tax hikes that would hurt hospitality business owners and workers.

ABL also works with the National Alcohol Beverage Control Association (NABCA) to identify issues that transcend “control” states and “private” states. By working together to improve customer experience – while also maintaining an alcohol marketplace where accountability and responsibility are of the utmost concern – we are helping to preserve the beverage alcohol ecosystem.

(Continued on Pg. 11)

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legislative update Changes in the Tax Cuts & Jobs Act of 2017; Music Licensing Database Bill Adds Cosponsors in House

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hanges in the Tax Cuts & Jobs Act of 2017 In December 2017, Congress passed, and the President signed the Tax Cuts & Jobs Act of 2017. The law makes extensive changes to the Internal Revenue Code of 1986, including provisions related to alcohol, the estate tax and pass-through businesses.

Estate Tax – The Tax Cuts & Jobs Act of 2017 temporarily doubles the exemption amount for estate, gift and generationskipping taxes from $5.6 million to $11.2 million per individual and $22.4 million per couple, effective January 1, 2018, and good for tax years 2018 through 2025. With the law’s sunset language, without further Congressional action, the exemption would revert to the $5.6 million base (indexed for inflation) in 2025.

Federal Excise Tax – The Tax Cuts & Jobs Act of 2017 makes several changes to federal excise taxes on alcohol beverages.

These changes are effective January 1, 2018 through December 31, 2019. An effort by alcohol suppliers and their trade groups to make these changes permanent is already underway.

S-Corp/Pass-Through Entities – The Tax Cuts & Jobs Act of 2017 also temporarily gives the majority of companies organized as “pass through” entities (e.g. S corporations, LLCs, partnerships and sole proprietorships) a 20 percent reduction of their income tax. However, the deduction comes with

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caveats, including: •

In general, the deduction cannot exceed 50% of your share of the W-2 wages paid by the business;

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Alternatively, the limitation can be computed as 25% of your share of the W-2 wages paid by the business, PLUS 2.5% of the unadjusted basis (the original purchase price) of property used in the production of income;

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The W-2 limitations do not apply if you earn less than $157,500 (if single; $315,000 if married and filing jointly);

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Certain “personal service businesses” -- i.e., accountants, doctors, lawyers, etc...

-- are not eligible for the deduction, unless their taxable income is less than $157,500 (if single; $315,000 if married and filing jointly).

Music Licensing Database Bill Adds Cosponsors in House Since its introduction last year, the Transparency in Music Licensing & Ownership Act (H.R. 3350) has added cosponsors in the House of Representatives as ABL and its members make outreach to legislators.

The bipartisan legislation is sponsored

by Rep. Jim Sensenbrenner (R-WI) and would require the creation of a database containing music licensing and ownership information, to be overseen by the U.S. Copyright Office.

That information would be made available in a machine-readable format to end-users (bars, restaurants, taverns), who would be on a steering committee overseeing the database and to ensure that it meets the needs of the retail community. Most importantly, it would allow courts to consider end-user reliance on the database in infringement cases.

Practically speaking, for beverage licensees this database would provide, for the first time ever, the ability to access reliable information regarding music licensing in a single, online location.

It would also allow retailers to make informed, rational business decisions about which PRO licenses best meets their needs. Though this would require due diligence on the part of business owners, an online database would increase transparency and potentially reduce the need for businesses to have multiple licenses just to protect themselves.

Music Modernization Act of 2017 Introduced; Could Affect Rates for Beverage Licensees Representative Doug Collins (R-GA) and Senator Orrin Hatch (R-UT) have released similar bills in the House and Senate, respectively, that would bring major changes to the music licensing landscape. The Collins bill (H.R. 4706) was introduced in late December 2017 while the Senate version, with it nine original cosponsors, was introduced in the upper chamber on January 24.

The bills are sweeping in scope and include many technical changes that would directly benefit publishers and songwriters, as well as streaming and digital music services, by creating a blanket license for those music providers.

Of interest to beverage licensees who purchase blanket licensees for their businesses from PROs like ASCAP and BMI are changes to the 114(i) section of

legislative update federal copyright law. The legislation as currently written would repeal section 114(i) of the copyright act, allowing rate courts to consider sound recording performance royalty rates when determining musical work performance royalties.

Currently, Section 114(i), which was originally put into law at the behest of songwriters and publishers, and is now opposed by those same groups, limits the scope of evidence the federal rate court may consider when setting songwriter royalties. While bars and restaurants don’t negotiate rates in federal court, it is reasonable to assume that if sound recording rates are considered in setting composition rates, and those rates go up for some licensees, they will likely be raised for all licensees.

Second Circuit Finds for BMI in “Fractional Licensing” Challenge to Consent Decree On December 19, 2017, the Second Circuit Court of Appeals affirmed

the ruling a lower court that BMI is not prevented by a consent decree from offering fractional licensing of song compositions. It is unclear as to whether and how BMI will change its licensing practices as a consequence.

It also remains to seen whether the Department of Justice (DOJ) has an appetite to petition for en banc review and/or appeal to the Supreme Court.

A few years ago, during a review of the consent decrees governing ASCAP and BMI, the DOJ concluded that 100 percent licensing, or “full-works licensing,” was required under the consent decrees. 100 percent licensing applies to songs with multiple writers where ownership is divided. For years, on-premise licensees have purchased “blanket licenses” which they believe have given them the right to legally play music covered by those licenses without risk of infringement. Songwriters and publishers, through BMI, now argue that they have always engaged in fractional licensing and that the music user must

get a license from all owners of a song in order to play it.

ABL co-filed an amicus curiae brief in the case, supporting the DOJ’s interpretation that the consent decrees do not allow for fractional licensing, citing (among other things) the very nature and understanding of “blanket licenses” that beverage licensees purchase from performance rights organizations (PROs).

18 States Increase Minimum Wage Levels in 2018 On January 1, 2018, minimum wage levels increased in 18 states across the country. Below, we provide an overview of these increases and the new current levels in each of these states. |

$10.00/hr (+$1.00) $11.50/hr (+$0.50)

$10.50/hr (+$0.50)

$8.30/hr (+$0.15) $9.65/hr (+$0.35) $8.85/hr (+$0.20)

$9.25/hr (+$0.35)

$10.40/hr (+$0.70) $10.10/hr (+$0.50)

$8.30/hr (+$0.15) $11.00/hr (+$0.50)

$10.20/hr (+$0.90)

$8.60/hr (+$0.16)

$7.85/hr (+$0.15)

$10.50/hr (+$0.50)

/hr .25 5) $8 $0.1 (+

$9.84/hr (+$0.04)

$10.10/hr (+$0.85)

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industry voices Looking Beyond the Headlines

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s we begin the year, I’d like to spotlight some of the positive attributes I see from all three tiers in our industry. Too often, this good news is missed in an era of 140 characters and quick headlines.

CRAIG WOLF President & CEO Wine & Spirits Wholesalers of America

First and foremost, the WSWA Economic Database tells us that the beverage alcohol industry is an economic powerhouse.

Our data reveals that U.S. wineries employ more than 55,000 workers; distilleries some 20,000; and wine and spirits distributors more than 74,000 workers across the country. Retailers employ more than one million people. And, workers across all three tiers earn more than $40 billion in annual wages and generate a direct economic impact from their paychecks of more than $120 billion. Only two states in the union have budgets larger than that amount—and it’s larger than the GDP of almost half the states.

Second, the U.S. beverage alcohol industry is expanding. Regional hubs of food and beverage are thriving, showcasing the best each state has to offer to tourists and residents seeking a true food-beverage-craft-and-local story, meeting and learning from the people who made their product, and experiencing its production firsthand.

These hubs often develop around local or craft breweries, distilleries and wineries, and growth is taking place all across the country. And these suppliers depend not just on local residents and tourism for business but also on distributors as well as taverns, independent retailers and state stores. The relationship between independent retailers and these suppliers is often a key part of their shared success—independent retailers have the knowledge and vested local interest to give the attention and focus these craft and local brands deserve.

Third, it is a renaissance era for our industry— we are busy and our work is diverse. The Alcohol and Tobacco Tax and Trade Bureau (TTB), a primary industry regulator, approves labels for some 200,000 SKUs annually—clearly signifying a robust and innovative market. The U.S. beverage alcohol market is truly the envy of the world—offering the widest selection and variety available anywhere in the world, fueled by a double-barreled combination of craft/regional brands as well as thriving national/global brands.

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One wholesaler told me recently that 40 percent of his top sellers today were not in their portfolio a decade ago.

Even as consolidation continues among large national, multi-state distributors (as well as retailers and suppliers) we see a steady expansion of local, regional and specialty-market wholesalers coming to the WSWA Convention and Exposition, engaging with the association, and participating with state distributor and industry organizations.

Entrepreneurs are finding opportunity and success. The same is true of regional, craft and independent suppliers and of course local/regional independent retailers.

Fourth, we’re stronger and more united than ever.

While many big box and warehouse retailers are established in large strip center locations, nearly every new urban in-fill, downtown revitalization and urban redevelopment project in dozens of major cities includes a brewery, winery, tasting room, local independent retailer—or mix of several of these local merchant and storefront operations. Consumers are connecting with their products like never before—and local retailers and merchants are connecting with their customers as never before.

While there is some trepidation concerning the rapid pace of change in the marketplace, the industry remains strong. At its core, each tier of the industry is committed to these principles: building relationships with customers and suppliers; growing authentic brands with compelling messages; and helping support our communities. And of course, we all remain committed to opposing underage access and abuse of our products, strict anti-underage sales and access provisions, and strong anti-DUI enforcement.

In life, change is the only constant. But our industry is thriving and growing - and that’s a trend I see continuing in the months and years ahead. |

industry voices Amid All the Change, Beer Remains the Beverage of Choice his year, NBWA is celebrating our 80th anniversary. And I have to admit that we T are proud to join our members – America’s independent beer distributors – in raising a glass in celebration to this milestone.

CRAIG PURSER President & CEO National Beer Wholesalers Association

The celebration includes a toast to this great system – the independent, three-tier system – that helps all tiers (suppliers, distributors and retailers) and all segments (beer, wine and liquor) grow and thrive.

As we celebrate today, we applaud the great beer distributors who came before us... the generations who lived through World War II, the Civil Rights movement, Vietnam, Watergate and the Cold War. They also experienced the birth of rock and roll and witnessed the first man on the moon. Some distributors probably wore bellbottoms back in the day!

All of this is a reminder that America’s beer distributors have been around for decades and decades. They have been directly involved in their businesses and engaged in their home communities, building solid relationships with industry partners – including local, independent retailers – and generating institutional knowledge that can be established only with years and years of experience.

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Today, those relationships and all of that experience help distributors serve as a stable voice and reliable partner amid a sea of change – change that is occurring in all segments and all tiers of the licensed beverage industry.

Just one generation ago – in the 1980s – fewer than 50 breweries were producing beer in the U.S. Today, there are more than 5,000! Think about that – it’s hard to find any other industry with so many new entrants to the marketplace.

And it’s not just brewers experiencing such growth. More wineries and distilleries are opening for business, too.1 Nearly 24,000 alcohol suppliers are producing alcohol beverages in the U.S. today – significantly higher than the 9,800 suppliers operating nationwide in 2010. That tells us that more than 60 percent of all alcohol suppliers have been around less than seven years.

That is generating healthy industry competition and vast consumer choice, but it also means there are many suppliers that have not yet built the relationships or the institutional knowledge that most distributors have built over the decades.

The distribution tier is seeing its own changes.

Beer distributors went from having an average of 200 unique products (SKUs) in their warehouses to storing nearly 1,000 products in a sevenyear period. And as the products increased, the inventory started turning less often, down from 19 times a year to less than 14 in the same period. That means that distributors have a more crowded warehouse and more inventory on their hands. Additionally, distributors are running more routes, covering more square miles and delivering beer for more customers living in their territory.

What about retailers?2 Well I don’t have to tell you that changes have come to the retail tier, too. In a recent seven-year stretch, 90,000 new licensed retailers opened their doors for business; today, there are nearly 650,000 retailers selling alcohol beverages from coast to coast. And the face of retail is changing, too – some of those newer retailers include fast food restaurants, clothing stores, movie theater, big box stores, barber shops and salons – and yes, taprooms.

All of this change means that beer consumers have more occasions and more choice than ever before. If you are a beer consumer, you’ve never had more access, more opportunity or more variety to enjoy. There’s no other country in the world that offers the selection that we do.

And the consumer is changing significantly in lifestyle and in taste. The legal drinking age share is higher than it’s ever been -- nearly three out of four people in the U.S. are now over 21 years old.

We are living longer, and having fewer children.

The average American household has dropped a full person since the 60s.

But over the years and amid all the change, there are some constants.

Beer remains the beverage of choice, of those who chose to drink alcohol beverages.3 Beer is still the largest segment in the alcohol industry.

And beer distributors are still local, familyoperated businesses, deeply rooted in their communities, working hand in glove with local, independent retailers and brewers of all sizes to build beer brands and deliver consumer choice.

After all, it’s by working together that we will continue to build this thriving industry for future generations.

Cheers! |

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meeting highlights 2018 Keynote Address: Examining the Future of Wholesale Distribution

TOM COLE

President & CEO | Republic National Distributing Company

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BL recently announced that Tom Cole, President & CEO of Republic National Distributing Company (RNDC), has been confirmed as the featured

keynote speaker at the association’s of wines and spirits with sales of upcoming annual meeting, being held approximately $6.5 billion. He has been March 11-13 in New Orleans, Louisiana. in the wine and spirits industry for over 30 years, having launched his career with “With the recent announcement of the Duval Spirits Company in Florida in 1981 merger between RNDC and Breakthru and was named President of Magnolia Beverage Group – which will create Marketing Company in 1991. the nation’s second-largest wholesale distributor, with operations in 27 states He has continued in the chief executive – we feel it’s important to provide our position through several expansions, members with a venue to learn about culminating in the merger of Republic what the merger will mean for them and Beverage Company with National their businesses,” noted ABL Executive Distributing Company. He also serves Director John Bodnovich. “Accordingly, on the board of directors of the Wine we are excited to have Tom provide the & Spirits Wholesalers of America and its year’s keynote address on the future of Government Affairs Committee. wholesale distribution.”

Tom Cole has served as the President A New Orleans resident for the last 24 & CEO of RNDC since its creation in years, Tom is originally from Mt. Vernon, 2006, helping the business grow to be Ohio and a graduate of the University of the nation’s second largest distributor Miami, Florida. |

2018 Top Shelf Award: Sazerac President & CEO to Receive Association’s Highest Honor

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BL recently announced that Mark Brown, President & CEO of Sazerac Company, Inc., will be recognized with the 2018 ABL Top Shelf Award at ABL’s 16th Annual Meeting on March 12, 2018 in New Orleans, Louisiana.

The ABL Top Shelf Award, the highest honor presented by America’s beer, wine and spirits retailers, recognizes those who have demonstrated professional excellence in the beverage alcohol industry, and have had a positive influence in their community.

Brown got his start in the beverage alcohol business at a relatively young age when he began working in his family’s pub business in the United Kingdom in 1971. In 1976, Brown joined British alcohol cider-maker H.P. Bulmer as a salesperson, and by 1978 was Sales Trainer. He came to the United States in 1980, operating as the U.S. Field Sales Manager for Bulmer. From 1981 to 1992 he served as Director of New Products,

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National Sales Manager and, eventually, tiers of the industry and the community Vice President of Sales and Marketing surrounding his adoptive home of New Orleans.” with Sazerac.

Brown left Sazerac and joined BrownForman (no relation) as Senior Vice President and COO of the Select Brands Group for two years. He then spent the next three years as President of the Advancing Markets Group, before returning to Sazerac in June 1997 in his current role as President & CEO, where the company’s portfolio includes brands such as Fireball Cinnamon Whiskey, George T. Stagg, Pappy Van Winkle, Sazerac Rye, and Southern Comfort.

“Mark Brown is synonymous with the beverage alcohol industry – an industry that Mark has been a part of not just professionally for more than 30 years, but really for his entire life,” said ABL President Steve Morris. “ABL is honored to present Mark with the 2018 Top Shelf Award in recognition of his dedication and commitment to the thriving three-

The ABL Top Shelf Award will be presented at the ABL Honors Gala on March 12, which is part of the ABL Annual Meeting in New Orleans, Louisiana on March 11-13, 2018. |

MARK BROWN

President & CEO | Sazerac Company, Inc.

out & about Your Going-Out Guide to New Orleans FRENCHMEN STREET: If you want an authentic New Orleans experience more removed from the touristy areas of Bourbon Street and the French Quarter, head to the lively Frenchmen Street. A popular spot for locals, Frenchmen Street is a four-block stretch of live music, bars, restaurants, night clubs and art galleries.

FRENCH QUARTER: If you want to experience New Orleans properly, it's best to begin your tour here. As one TripAdvisor user put it, "You cannot visit New Orleans without making a stop in the French Quarter." The neighborhood, also known as Vieux Carré, is the heart and soul of this city, and it's also a National Historic Landmark.

GARDEN DISTRICT: Take a walking tour of the Garden District (located a little less than 3 miles southwest of the French Quarter) for a peek at some of the city's most beautiful homes.

Like its name suggests, this historic residential neighborhood is laden with trees, ivy, and yes, gardens.

THE NATIONAL WORLD WAR II MUSEUM (National D-Day Museum): You don't have to be a history buff to enjoy The National World War II Museum, according to recent travelers. "This will move you," one TripAdvisor reviewer noted. Having opened June 6, 2000 (the 56th anniversary of D-Day), the National World War II Museum houses an impressive collection of artifacts and educational films documenting all aspects of the war, from D-Day to the war in the Pacific to the Holocaust.

them from rising water levels, and they're embellished with ornate designs inspired by French and Spanish architecture.

Though the city's older cemeteries are admittedly dilapidated, with crumbled tombs and patchy grass, the decaying grounds add to the ghostly atmosphere.

NEW ORLEANS MUSEUM OF ART: Since opening in 1911, the New Orleans Museum of Art (known simply as "NOMA") has assembled more than 40,000 works of art — an impressive compilation considering the museum opened with only nine pieces. NOMA's vast collection ranges from early Asian works to European masterpieces from the 16th to 20th centuries. While here, be sure to stroll through the Sydney and Walda Besthoff Sculpture Garden — located adjacent to the museum in City Park.

BLAINE KERN'S MARDI GRAS WORLD: Even if you're not in town for the actual festival, don't miss your chance to go behind the scenes of one of America's most renowned (and most raucous) celebrations. Blaine Kern's Mardi Gras World offers a close-up look at some of the flamboyant floats and costumes used during New Orleans' famous party. One thing to know upfront: This isn't a museum — it's a warehouse workshop where current floats are in the process of being completed and old floats are stored. | Source: U.S. News & World Report

SWAMP TOURS: The Louisiana bayous hold a special place in New Orleans locals' hearts. Stretching from Houston to Mobile, Alabama, the Bayou Country played a crucial role in the development of the United States in terms of communication and transportation. In fact, there would be no New Orleans without the bayous, so you owe it to yourself to take a swamp tour.

CEMETERY TOURS: Some of New Orleans' must-see (albeit morbid) attractions are its cemeteries. Many of the tombs found in these "cities of the dead" are above ground to protect

Taking It to the States

(Continued from Pg. 5)

This fall, I had the privilege of sharing some ABL insights with the National Conference of State Liquor Administrators (NCSLA), as they planned their upcoming annual meeting.

The meeting, which will see hundreds of liquor administrators and industry professionals from across the country gather to talk and learn about what issues their counterparts in other states are dealing with, is often where changes to state alcohol policy are first considered. It is a testament to the relevance and importance of ABL that it was asked to share the independent beverage retailer perspective with such a prestigious group of leaders.

Host Hotel

Source: Google Maps

Sitting This Out Isn’t an Option At a time when many states are considering sweeping changes to their alcohol laws and regulations (most of which could have significant implications for retail beverage licensees who have reliance interests and investments in their licenses, businesses and staff) ABL can’t afford to sit on the sideline.

It’s important as a national association that we help get the facts out about why state alcohol laws and regulations exist and in what context they serve customers and communities. ABL will continue these efforts to make sure its state members are armed with the information that they need when confronted with policy challenges in their states. |

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speaker spotlight JOHN BODNOVICH Executive Director American Beverage Licensees

ohn Bodnovich is Executive Director Jgovernment of ABL and oversees ABL’s federal affairs efforts, grassroots

advocacy, support for sensible retail business policy and public affairs strategies.

During his time with ABL, John has led a number of association programs and initiatives including responsibility campaigns and public awareness and policy efforts addressing alcohol issues.

He is active in leadership roles with the Responsible Hospitality Institute, Responsible Retailing Forum and the Sky Ranch Foundation.

RICK GARZA Director

Washington State Liquor & Cannabis Board

ick Garza has been with the Liquor R Cannabis Board since 1997. During Rick’s career with WSLCB he has also

held the positions of Legislative and Tribal Liaison, Policy Director and Deputy Director.

Prior to joining the Liquor and Cannabis Board, Rick served 13 years as a staff member for the Washington State Legislature, including five years with the Washington State Senate and eight years with the state House. His legislative assignments included Policy Analyst in the state Senate, House of Representatives Staff Director, and adviser to House and Senate leadership.

ELIZABETH FRAZEE Co-Chair MIC Coalition

amed a “Top Lobbyist” by The Hill N newspaper, Elizabeth has a 30 year career in Washington that encompasses over a decade working in high-level jobs on Capitol Hill, executive experience at leading tech and entertainment companies and years of successful representation of companies, trade associations and non-profits as a policy advocate and political strategist.

An expert at managing issue campaigns and running industry coalitions, Elizabeth delivers results for her clients by interweaving a thorough understanding of substantive policy, communications, politics and an impressive network of contacts.

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ABL INSIDER

KEITH BURT Chairman

National Conference of State Liquor Administrators

TOM COLE President & CEO Republic National Distributing Company

eith Burt has been involved in K Oklahoma State government for over 40 years. He has been an Auditor for the

homas Cole has served as the T President of Republic National Distributing Company since its creation in

He joined the Oklahoma Alcoholic Beverage Control (ABC) Board in 1980. In 1985, Oklahoma approved a constitutional change to allow liquor-by-the-drink on a county option basis and renamed the ABC Board, the Oklahoma Alcoholic Beverage Laws Enforcement (ABLE) Commission.

Tom has been in the wine/spirits industry for over 30 years. He launched his career with Duval Spirits Company in Florida in 1981 and was named President of Magnolia Marketing Co. in 1991. He has continued in the chief executive position through several expansions, culminating in the merger of Republic Beverage Co. with National Distributing Company.

Department of Human Services, the Oil and Gas Division of the Oklahoma Tax Commission, and the Department of Mental Health and Substance Abuse Services, where he was the lead Financial Auditor, auditing Mental Health Centers.

DANELLE KOSMAL Vice President Beverage Alcohol Practice The Nielsen Companies

s Vice President of Nielsen’s Beverage A Alcohol Practice, Danelle provides industry thought leadership and best

practice solutions to beer, wine, and spirits clients, industry groups, and the media. She is committed to leveraging Nielsen’s breadth of resources to provide an integrated and holistic understanding of consumer behavior and retail trends across beer, wine, and spirits.

Danelle has more than 15 years of marketing experience, and has been with Nielsen for over 10 years, working across various clients in the food, beverage, and consumer goods industries. Prior to joining the Beverage Alcohol Practice, Danelle led Nielsen’s business at MillerCoors in Chicago.

CHRIS FURNARI Editor Brewbound

2006, helping the business grow to be the nation’s second largest distributor of wines and spirits with sales of approximately $6.5 billion.

JIM MCGREEVY President & CEO Beer Institute

20-year veteran of policy and political A work, Jim McGreevy serves as president and chief executive officer of the Beer

Institute, the national trade association that represents America’s brewers, beer importers and supply-chain partners – a $350 billion industry that supports more than 2.2 million American jobs. As the national voice for the industry, Jim advocates on policy matters involving Congress, state legislatures, courts and regulatory agencies.

He serves as the official spokesman to the media and elsewhere on matters affecting the beer industry.

In his capacity as president and CEO, Jim serves on the board of the Techniques for Effective Alcohol Management (TEAM) Coalition.

STEVE MORRIS President

American Beverage Licensees

hris Furnari is the editor of Brewbound C and focuses exclusively on the beer business. In addition to overseeing daily

teve Morris is President of American Soperated Beverage Licensees. He has owned and Jorgenson’s Restaurant & Lounge

He is a regular at industry gatherings and has been cited in mainstream media publications such as CNBC, USA Today, The Boston Globe, Mashable and Wired Magazine, among others.

Morris is also actively involved in the Montana Tavern Association (MTA), where he has been a member since 1989 and served as President from 2001-2003. He was also presented with the 2015 Durkee Award, the MTA’s highest honor.

content, Furnari also plans and executes Brewbound’s business networking events -Brewbound Session and Brew Talks.

in Helena, Montana with his wife, Barb, for nearly three decades.

speaker spotlight KRAIG R. NAASZ President & CEO Distilled Spirits Council

raig R. Naasz is the president and CEO K of the Distilled Spirits Council, which is the national trade association representing producers and marketers of distilled spirits sold in the United States.

Naasz previously served as the chief executive of the American Frozen Food Institute, The Fertilizer Institute and the U.S. Apple Association, as well as vice president of the Northwest Horticultural Council. Earlier in his career, Naasz worked as a communications and legislative aide for several members of the U.S. Senate and U.S. House of Representatives, as well as the House Agriculture Committee.

JAMES L. WEBSTER Founding Partner Webster Powell, P.C.

ames is the founding partner of Chicago Jspecializing based Webster Powell, P.C., a law firm in the alcohol and hospitality

BRANDY NANNINI Vice President Government Relations & Traffic Safety Responsibility.org

s Vice President - Gov. Relations & A Traffic Safety, Brandy is responsible for relationships with Members of Congress, State Attorneys General, Federal agencies, governors, state legislators, and agencies, as well as local elected officials. She is also responsible for the organization’s public policy efforts including the development and implementation of policy positions.

Ms. Nannini also directs the organization’s traffic safety programs.

PAUL PISANO Senior Vice President & General Counsel National Beer Wholesalers Association

aul Pisano leads the association’s efforts P in industry, legal and state governmental affairs and serves as a liaison to state distributor associations and outside groups.

Prior to joining NBWA, he served at the Department of Commerce, most recently as Director of Congressional Affairs at the U.S. Census Bureau. He also spent six years working in senior positions on Capitol Hill.

Ms. Nannini has also led state and national public relations and coalition efforts to establish speeding and red light running laws. She is a board member of the Washington Regional Alcohol Program.

Thank You to Our Generous Annual Meeting EVENT Sponsors

industries. With over 35 years of practice in these industries, Jim represents clients in all three tiers of the industry across the United States. Jim served as the co-chairman of the ABA Committee on Alcoholic Beverages.

He has assisted the National Center for Alcohol Law Enforcement in training Wisconsin law enforcement agencies regarding alcohol related incidents and arrests. He was active in the founding and governance of the Chicago Hospitality Resource Partnership, a non-profit resource group that assisted Chicago community neighborhoods in planning, managing and policing hospitality and entertainment districts..

MATTHEW CROMPTON Client Director Nielsen CGA

atthew Crompton is an Client Director M for Nielsen CGA and is responsible for the implementation of Nielsen CGA’s

on premise services in the US. Since joining CGA Strategy in January 2010, Matthew has risen through the CGA ranks becoming an expert in all things On Premise. Matthew has managed and provided consultancy for some of the largest Bev Al manufacturers across Europe including Diageo, Anheuser Busch and William Grant & Sons.

Matthew is now part of the US On Premise Specialist team, providing first-class insight into an often perceived dark market. |

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session spotlight 1

Keynote Address: Examining the Future of Wholesale Distribution Tom Cole | President & CEO | Republic National Distributing Company

The growth of premium wine and spirits – coupled with changes in the distributor tier over the past few years – have been extraordinary, with impacts on all tiers of the industry. As the President of RNDC and a leader in the beverage alcohol community, Tom Cole will share his unique perspective on industry issues, including the recently announced merger of RNDC with Breakthru Beverage Group.

2

Traffic Safety & Impaired Driving Policy Update

Brandy Nannini | Vice President - Government Relations & Traffic Safety | Responsibility.org

Beverage licensees have long been engaged on drunk driving issues in their communities, working with local law enforcement and public safety groups on solutions to this problem. A recent flurry of reports on highway traffic safety – including a National Academy of Sciences report on alcohol impaired driving – have brought impaired driving issues back into the national spotlight. Brandy Nannini, Vice President Government Relations & Traffic Safety for the Foundation for Advancing Alcohol Responsibility (Responsibility.org), will discuss impaired driving policy developments and what they may mean for beverage retailers.

3

Music Licensing

Elizabeth Frazee | Co-Chair | MIC Coalition

With bills before Congress and lawsuits working through Federal courts, there’s a lot going on in the music licensing front. For beverage licensees who pay to play music in their businesses, what happens in Washington and in the legal system can affect their bottom lines and determine the future of live music. Elizabeth Frazee, Co-Chair of the MIC Coalition, will talk about the current state of play for music licensing issues and what the MIC Coalition is doing to bring transparency to an otherwise opaque system.

4

Technology TBD Speaker

Whether it’s an online streaming service, digital jukebox, POS system, payroll processing software, inventory management, ID scanners, or promoting your business on social media, technology plays an integral role in nearly every aspect of running both on- and off-premise businesses. This session will provide attendees with information on how best to utilize technology in these changing times - and how to make it work for them. Please Note: Session Topic & Speaker Are Subject to Change

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Industry & Association Leaders

Jim McGreevy | President & CEO | Beer Institute Kraig Naasz | President & CEO | Distilled Spirits Council

With mergers and acquisitions, alcohol excise tax changes, international trade reform, impaired driving and a host of other issues percolating in Washington, DC and the beverage alcohol industry, it’s more important than ever for retail beverage licensees to understand the big picture of their industry. Kraig Naasz, President & CEO of the Distilled Spirits Council and Jim McGreevy, President & CEO of the Beer Institute will join the meeting to share their thoughts on recent policy developments, what their members are focused on and where retailers should be engaged in the coming year.

6

Liquor Privatization & Recreational Marijuana Regulation: The Washington State Experience Rick Garza | Director | Washington State Liquor & Cannabis Board

Following the approval of a ballot initiative in 2011, Washington State ended state control of the wholesale and retail liquors operations, shifting from a “control state” to a “private” model for liquor distribution and sales, beginning in June 2012. Two short years later, following the passage of another ballot initiative, Washington State began regulating the new recreational cannabis industry.

Washington State Liquor and Cannabis Board Director Rick Garza joins the ABL Annual Meeting program to offer a regulatory perspective on these two significant changes and how state alcohol (and now cannabis) regulators developed a regulatory infrastructure for liquor and recreational cannabis.

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ABL INSIDER

session spotlight 7

Knowing Your Customers

Danelle Kosmal | Vice President - Beverage Alcohol Practice | Nielsen Matthew Crompton| Client Director | Nielsen CGA

Staying on top of trends, demographics and changes in the beverage alcohol market is critical if beverage retailers are going to be successful in an increasingly competitive retail landscape. Danelle Kosmal, Vice President, Beverage Alcohol Practice for Nielsen and Matt Crompton, Client Director for Nielsen CGA, will discuss off-premise and on-premise trends and data on consumers and subgroups of consumers that will help beverage licensees better position their businesses for success.

8

Licensing & Regulation TBD Speaker

Licensing and regulation – two words synonymous with the beverage alcohol industry. In this session, attendees will hear from industry veterans and experts on how best to navigate the world of licensing and regulation, and how business owners can work with regulators and legislators to ensure a robust marketplace and level playing field for all. Please Note: Session Topic & Speaker Are Subject to Change

9

Legal Update

Jim Webster | Founding Partner | Webster Powell P.C.

Beverage licensees know that they need to be active with their state legislators and engage with their regulators. Increasingly, however, alcohol policy is finding its way to the courtroom and long-standing state laws are being challenged by those who wish to change the way alcohol is sold in the United States. Jim Webster, Managing Partner of Webster Powell, P.C. will talk about recent and ongoing legal cases that have a direct impact on beverage retailers, and what alcohol law challenges may be next on the docket.

10

What’s Brewing? News & Notes on the Beer Business Chris Furnari | Editor | Brewbound

The growth of the beer industry, if not in volume but certainly in number of breweries, brands and SKUs, has been an inescapable reality for much of the last decade. Retailers have had a front row seat to a flood of local start-ups seeking cooler space and tap handles, legacy breweries getting into the “craft” space, and a host of other developments that have changed the game when it comes to selling beer. Chris Furnari, Editor of Brewbound, joins the program to talk about the beer business, analysis of industry trends and what beverage retailers should be paying attention to in the marketplace.

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Retail Hot Topics Panel

Steve Morris | President | American Beverage Licensees

This year, ABL will hold panel discussion for alcohol retail issues “of the moment” and those that may be just over the horizon. Leading on- and off-premise beverage retailers will cover the most important topics and breaking news of the day in the “Retailer Hot Topics” panel. Moderated by ABL President Steve Morris, the panel will cover a handful of current, developing issues, and bring retail experts to the stage to give you their impressions on what is happening and what it means for the alcohol industry. What issue are you currently struggling with? Is there is an emerging topic you want to hear about? Bring your questions to what will be a lively discussion.

Thank You to Our Generous ABL HONORS GALA Sponsors

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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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Bacardi USA Beam Suntory, Inc. Distilled Spirits Council

GOLD

Breakthru Beverage Group Brown-Forman Pernod Ricard USA Southern Glazer’s Wine & Spirits, LLC Wine Institute

SILVER

Constellation Brands McCormick Distilling Co. Moët Hennessy USA Monarch Beverage Co. Patrón Spirits Company Presidents’ Forum of the Distilled Spirits Industry

BRONZE

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affiliate members ALABAMA Alabama Beverage Licensees Association ALASKA Alaska CHARR

COLORADO Colorado Licensed Beverage Association CONNECTICUT Connecticut Package Stores Association

DELAWARE Delaware Small Business Leadership Council FLORIDA Florida Independent Spirits Association GEORGIA Georgia Alcohol Dealers Association

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ILLINOIS Illinois Licensed Beverage Association INDIANA Indiana Association of Beverage Retailers KANSAS Kansas Licensed Beverage Association

KENTUCKY Kentucky Association of Beverage Retailers

MONTANA Montana Tavern Association

SOUTH DAKOTA South Dakota Licensed Beverage Dealers & Gaming Association

NEW YORK New York State Liquor Stores Association

TEXAS Texas Package Stores Association

NEW JERSEY New Jersey Liquor Store Alliance

OKLAHOMA Retail Liquor Association of Oklahoma

VIRGINIA Virginia Licensed Beverage Association

RHODE ISLAND Rhode Island Liquor Stores Association

WYOMING Wyoming State Liquor Association

MARYLAND Maryland State Licensed Beverage Association

PENNSYLVANIA Malt Beverage Distributors Association of Pennsylvania

MISSISSIPPI Mississippi Hospitality Beverage Association

SOUTH CAROLINA ABC Stores of South Carolina

MASSACHUSETTS Massachusetts Package Stores Association

TENNESSEE Tennessee Wine & Spirits Retailers Association

WISCONSIN Tavern League of Wisconsin

WINE & SPIRITS GUILD OF AMERICA

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