THE V OICE OF AMERICA’S BEER, WINE & SPIRITS RETAILERS
ABL INSIDER VOL. 12, NO. 2 | SUMMER 2018
A PUBLICATION OF AMERICAN BEVERAGE LICENSEES
GAME ON!
VOL. 12, NO. 2 | SUMMER 2018
contents
3 working for you
10-11 meeting highlights
4 leading
12-13 meeting spotlight
ABL Statement on NAS Report on Alcohol-Impaired Driving
Sports Betting in the States? You Can Bet on It
5 where we stand
Disruption: More Than Just a Buzzword
Photos from ABL’s 2018 Annual Meeting in New Orleans
2018 ABL Top Shelf Award Recipient & Brown-Forman Retailers of the Year Honored at Annual Meeting
13 member spotlight
ABL New Member: United Beverage Retailers of Arkansas
6-7 legislative update
Congress and the Courts Remain Active
14 music licensing
ASCAP & BMI Consent Decrees: What You Need to Know
8 industry voices
Craig Purser, President & CEO, NBWA
15 state issue update
Supreme Court Rules on Sports Betting in Murphy v. NCAA
9 meeting highlights
Photos from ABL’s 2018 Annual Meeting in New Orleans
industry calendar
16 associate & affiliate members
JUNE 2018
SEPTEMBER 2018
Beverage Alcohol Retailers Conference
Indiana Association of Beverage Retailers Annual Golf Outing
June 3-5 | Denver, CO
September 7 | Indianapolis, IN
June 4 | Auburn, IL
Illinois Licensed Beverage Association Annual Golf Outing
June 11-12| Fairbanks, AK
September 16-18 | Spring�ield, IL
Illinois Licensed Beverage Association 133rd Annual Convention
September 23-26 | San Diego, CA
ABL Summer Board Meeting
NBWA 81st Annual Convention
June 11-13 | Milwaukee, WI
September 24-27 | Sitka, AK
Beer Institute Annual Meeting
Alaska CHARR Convention
June 13 | Monroe, CT
Connecticut Package Stores Association Golf Tournament
June 17-21 | Kona, HI
OCTOBER 2018
October 1-4 | Wisconsin Dells, WI
Tavern League of Wisconsin Fall Conference & Trade Show
NCSLA Annual Conference
June 19 | Monroe Township, NJ
New Jersey Liquor Store Alliance 8th Annual Golf Outing
October 9 | Mt. Vernon, VA
16th Annual Spirit of Mt. Vernon
AUGUST 2018
October 9 | Albany, NY
Mississippi Hospitality & Beverage Assoc. Convention & Trade Show
New York State Liquor Stores Association Trade Show
New York State Liquor Stores Association Trade Show
August 4-5 | Philadelphia, MS August 12-13 | Houston, TX
Texas Package Stores Assoc. 71st Annual Convention & Trade Show
Published by: American Beverage Licensees 5101 River Rd, Suite 108 Bethesda, MD 20816 (301) 656-1494 www.ablusa.org editor MATTHEW EVANS
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October 11 | Rochester, NY
October 15-17 | Washington, DC ABL Fall Board Meeting
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
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leading Sports Betting in the States? You Can Bet on It.
A
STEVE MORRIS President American Beverage Licensees
s many of you are by now aware, the Supreme Court of the United States (SCOTUS) recently ruled in favor of New Jersey in the state’s six-year legal battle over sports betting that would come to be known as Christie v. National Collegiate Athletic Association (later amended to Murphy v. NCAA after Phil Murphy (D) was elected Governor of New Jersey in 2017 and replacing Chris Christie). At its simplest, the lawsuit centered around New Jersey’s 2011 referendum to legalize sports betting in the state – which passed with 64% of voters voting in favor of the measure. The following year, the state legislature enacted the Sports Wagering Act of 2012, which legalized sports betting at the state’s racetracks and casinos. Soon thereafter, however, the NCAA and the four primary professional sports leagues (NBA, NFL, NHL & MLB) sued the state of New Jersey, arguing the state was violating the Professional & Amateur Sports Protection Act of 1992 (PASPA), which largely outlawed sports betting outside the state of Nevada.
committees, the association has decided to take a squarely neutral position on the issue of sports betting. Similar to the association’s decision to take a neutral position on the legalization or recreational cannabis at the state level, ABL believes the question of legalized sports betting should be determined by individual states themselves. ABL formally takes the position that if legalized, fully-licensed beverage retailers should not be prohibited from participating in the sports gaming marketplace, ABL staff has been hard at work reviewing the issue as it currently stands; what states are likely to be the first to legalize and implement sports betting systems; active legislation at the state level focusing on sports betting; and more. ABL’s goal is to provide our state affiliates with the information they need to make informed decisions regarding their respective associations’ support of – or opposition to – the question of legalizing sports betting in their state. To this end, ABL released a report providing an overview and analysis of the issue on June 18, via the Members-Only section of the ABL website (www.ablusa.org/members-only). The report contains information from a variety of sources and include links directly to these sources, for easy referencing. Once you have had a chance to review the report, we welcome you to reach out to the national office with any questions or requests for additional information. You can contact them via email with any inquiries at info@ablusa.org. |
For more information on the case and SCOTUS’s ruling, I encourage you to read the feature on Page 15, which provides a more detailed overview. For purposes of this column, however, I want to take the opportunity to discuss ABL’s position on the issue of sports betting and what you can expect to see in the coming months. Following thorough and deliberative consultation with ABL’s Government Affairs and Executive
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“If legalized, fully-licensed beverage retailers should not be prohibited from participating in the sports gaming marketplace.” - ABL President Steve Morris
where we stand Disruption: More Than Just a Buzzword
H
ere are some brands you may be familiar with: iPhone, Uber, Instacart, Airbnb, WhatsApp, Tinder, Spotify, DropBox, Instagram, Tumblr, Pinterest, Hulu and BuzzFeed.
JOHN BODNOVICH Executive Director American Beverage Licensees
The question: What do they all have in common? The answer: None of these brands existed 11 years ago. Not one. And yet today, they are some of the most recognizable names in business, media and technology. The ubiquity of these brands in the marketplace, on our mobile devices and in our lives reflects the speed with which commerce in changing in America. In the age of technology, consumers are increasingly empowered with more information than ever before, and that information informs their perceptions and purchase decisions. In a nutshell, it is causing DISRUPTION.
“You keep using that word. I do not think it means what you think it means.” - Inigo Montoya Disruption is the buzzword du jour, with entire conferences devoted to what it means and how it is changing everything we do and how we live. But what does it mean for beverage licensees? Is it just modern shorthand for how to address normal changes and evolution in the industry and with consumers? Or is it something more permanent that is ignored at one’s own peril? The beverage alcohol industry is not immune to disruption, though the reliance interests embedded in 80 years of licensed and regulated commerce have made it little less susceptible to overnight, wholesale change…for now. But disruption is having an impact on how ABL members do business. Faced with issues and choices that have been foisted upon businesses by regulatory and market forces (including changing consumer attitudes and expectations), beverage retailers must decide whether to take steps to address and adapt to disruption or risk being passed up by customers whose spending and shopping habits, and overall use of time are changing. There is no single “playbook” or set of solutions that every bar, tavern or package store can adopt to survive and thrive in a quickly changing, disruptive market. But there are some
general principles they can build around when developing the strategy that will work best for their business model. 1. Realize Who You’re Competing With. (HINT: It’s not just other alcohol retailers.) People’s time and attention are becoming bigger commodities than the discretionary spending dollars in their pockets. That means customers are looking for experiences that transcend a basic transaction of goods and services for currency. Whether that experience is sampling a product to learn more about it before they purchase it or enjoying products in a setting that makes that consumption memorable or special, beverage licensees should be evaluating their business practices against more than just their historical competitors. This means taking a look at how they are competing with non-traditional retailers (including tasting/tap rooms, movie theaters, grocery stores and other places) that sell experiential alcohol engagement as a secondary consideration to their core business. 2. Don’t Jump into the First Life Boat. Tempting as it may be to seek the first port in a storm, trade-offs and long-term consequences should be considered at the outset. Take, for example, the looming challenges that massive online retailers pose to traditional retailers – including package liquor stores. In the race to compete, some brick-and-mortar retailers have engaged third-party services that provides a virtual point-of-sale experience so that a store has an e-commerce presence. But at what cost? Are these retailers entering into a race to the bottom on pricing that degrades brands and margin? Is the wholesale surrender of a retailer’s sales and customer data – to what are essentially “big data” companies – a bridge too far for some beverage retailers? While the challenges ahead are intimidating, taking time to evaluate options and think through long-term outcomes is essential. 3. Don’t Be Afraid to Call Out Nonsense. As non-traditional alcohol retailers continue to push into the alcohol space by cajoling or muscling their way into otherwise efficient, well-regulated markets, the rules are increasingly being changed in the middle of the game. While there is nothing wrong with consensusbased evolution that lifts the boats of consumers and businesses, not every proposal to change existing norms is a good one. When disruption goes so far as to threaten the fundamental basics of an alcohol ecosystem that has developed into the most diverse and beneficial to consumers that the world has ever seen, it’s important that beverage licensees stand their ground and point out the harm and unintended consequences that change for change’s sake can bring. Continued on Page 14
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legislative update From Sports Gaming & Menu Labeling to Online Sales Tax & Swipe Fees, Congress and the Courts Remain Active
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PORTS GAMING On May 14, the Supreme Court struck down a federal law that prohibits gaming on individual sporting events in all states throughout the country. The ruling is a landmark shift for the gaming industry and major sports leagues. The lawsuit was brought by the state of New Jersey, with support from 18 other states, and challenged the 1992 law – the Professional and Amateur Sports Protection Act (PASPA) – which forced states to outlaw sports gaming. Americans place $150 billion a year in illegal sports bets, according to the American Gaming Association. The rush is now on to implement sports gaming in casinos and racetracks in New Jersey and other states that already permit other forms of gaming. A handful of states have passed – or have active legislation – that would allow for sports gaming but were waiting for the Supreme Court decision before they could move forward. Unlike cannabis legalization, there are no sports book banking obstacles and it does not appear that there are enough votes in Congress to pass legislation to push back on the Supreme Court decision, though anti-sports gaming bills may well be introduced. MENU LABELING On May 7, the long-delayed Food and Drug Administration (FDA) final rule on menu labeling went into effect. Under the rule, which stems from a provision in the Affordable Care Act, restaurants and similar retail food establishments that are part of a chain with 20 or more locations (doing business under the same name and offering for sale substantially the same menu items) must provide consumers with the number of calories contained in standard items on menus and menu boards. For self-service foods and foods on display, calories must be listed in close
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proximity and clearly associated with the standard menu item. Businesses must also provide, upon request, the following written nutrition information for standard menu items: total calories; total fat; saturated fat; trans-fat; cholesterol; sodium; total carbohydrates; sugars; fiber; and protein. While the menu-labeling requirements alleviate some problems for chain restaurants operating in multiple states and facing a potential patchwork of menu labeling laws, they have received push back from segments of the food and beverage industry including pizzerias and craft brewers. Some of those opposed to the regulations were hopeful that the Trump Administration would move to stop the requirements as part of its de-regulatory push, but that has not been the case. ESTATE TAX The Family Business Coalition circulated a letter on April 25 backing the Death Tax Repeal Act of 2018 (H.R. 5422), a bill from Rep. Jason Smith (R-MO) to get rid of the estate tax, arguing that “permanent repeal” is “the only solution for family businesses and farms.”
out on billions of dollars in tax revenue, and brick-and-mortar retailers who are put at a competitive disadvantage by online retailers who can build nonpayment of sales taxes into their prices. The case hinges on a 1992 Supreme Court decision, Quill Corporation v. North Dakota, which said that the Constitution prohibits states from collecting sales taxes from businesses that are not substantially connected to the state. In the balance and of concern to the Supreme Court justices are increasing burdens on small businesses, liability for back taxes and other unforeseen consequences to the online marketplace. The case captures elements of multiple modern U.S. legal conundrums including the scope of the Commerce Clause and the impact of technology on business and law. ADA REFORM Despite the successful passage of the ADA Education and Reform Act (H.R. 620) in the House in February, momentum for tweaking the American with Disabilities Act (ADA) has stalled in the Senate.
Rep. Smith is assuming the mantle of House “death tax” champion upon Rep. Kristi Noem (R-SD) retiring from Congress. One challenge now developing for repeal supporters: Republican backers of repeal believe that last year’s tax law, which doubled the estate tax’s exemption, blunted some of the momentum for getting rid of the levy entirely.
Sen. Tammy Duckworth (D-IL), herself a disabled veteran, was joined by 42 other Democratic Senators in a letter to Senate Majority Leader Mitch McConnell (RKY) in which they pledged to block a Senate vote on the ADA Education and Reform Act. With 43 Senators opposing the bill, there is enough opposition to filibuster the legislation, dimming its chances of reaching the Senate floor.
ONLINE SALES TAX On April 17, the Supreme Court heard oral arguments on South Dakota v. Wayfair, straining to determine whether states should be able to compel online retailers to collect sales taxes in states where they do not have a physical presence. The issue is important to states that are losing
MUSIC LICENSING Legislation that addresses some – but not all – issues regarding music licensing is making its way through Congress. The Music Modernization Act (MMA) (H.R. 5447; S. 2334), introduced by House Judiciary Committee Chairman Bob Goodlatte (R-VA), passed the House
legislative update 415-0 on April 25 after being voted out of the House Judiciary Committee with unanimous support on April 11. The Senate version was introduced by Sen. Orrin Hatch (R-UT) on May 10 and received a hearing from the Senate Judiciary Committee (SJC) on May 15. A markup by the SJC is expected. Both bills are compilations of three music licensing bills that have garnered consensus support from music industry groups, as well as the support of streaming music services (Spotify, Apple, Pandora, etc.) The main thrust of the legislation is an overhaul of the system for mechanical music rights royalties through the creation of a blanket licensing system for online streaming services and a single collective (database) for distribution of funds to individual rights holders. The legislation also benefits artists who recorded music prior to 1972 and changes how sound engineers are compensated. The rest of the content delivery industry (venues, broadcasters, etc.) have not taken a position on the legislation, nor has the MIC Coalition. CBMTRA On March 2, the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued guidelines for implementation of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) portion of the tax reform bill. Though it has been broadly reported that all wineries would benefit from reduced federal excise tax rates, TTB guidelines state: Wineries which totally control production and sales from start to finish will get the full benefit (an effective rate of 7 cents per gallon on the first 30,000 gallons produced, for example), while those using custom crush or remote bonded wine cellars will have to pay the full excise tax rate ($1.07 per gallon) on the wines subject to those scenarios. Wine industry advocates point out that the TTB’s interpretation would be a “particularly devastating scenario for many small and medium-sized wineries which have long benefited from the Small Producer Tax Credit (enacted in 1991) that lowered their rate from $1.07 to 17 cents per gallon.” Though the presumed tax credits took effect on January 1, 2018, some temporarily
permitted wineries now face a June 30, 2018 deadline when they will fall under the new tax regime. Alcohol industry suppliers have also launched their lobbying efforts to extend the new alcohol excise tax reductions beyond the current expiration date of December 31, 2019. SWIPE FEES Since ABL and its Merchants Payments Coalition (MPC) partners secured the removal of a provision to repeal the Durbin Amendment from the Financial CHOICE Act (H.R. 10) in June 2017, there has been little news on the debit or credit card swipe fee front. On March 14, the Senate passed the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155), which would be the biggest bank deregulation since 1999 and would roll back parts of the 2010 Dodd-Frank financial overhaul. Over a dozen Senate Democrats voted for the bill, which passed 67-31, and sends it to the House where conservative Republicans are looking to add additional provisions to further roll back the 2010 law. Fortunately for retailers, the Senate bill does not contain any language that would undo the Durbin Amendment and swipe fee laws. OVERTIME RULE According to a recent announcement by the federal government, a new overtime rule proposal may be released in October 2018 as part of the Department of Labor’s fall regulatory agenda. An Obama Administration Fair Labor Standards Act regulation that required employers to pay overtime to all workers making less than $913 per week (which amounts to $47,476/year and was drastic increase over prior $455/week ($23,660/ year) threshold), was invalidated last year by a federal judge. Since then, the Trump Administration started the rulemaking process for a new threshold by issuing a Request for Information in July 2017. Even with the introduction of a proposed rule in October, a final rule might still be years away. Some that a set year.
labor analysts have speculated new rule could use a threshold between $30,000-$35,000/ Congressional Democrats have
introduced the Restoring Overtime Pay Act (H.R. 4505 & S. 2177), which would institute a $48,412/year threshold. The bills count 53 and 11 cosponsors, respectively, but does not have any Republican support. OMNIBUS LEGISLATION ABL tracked the massive omnibus spending bill that President Trump signed into law on March 23. The $1.3 trillion spending package (H.R. 1625) will keep the government funded through the end of September 2018. Of note to beverage licensees are two funding provisions. One provision funds two NHTSA law enforcement training programs for drugimpaired driving. The Drug Recognition Expert (DRE) and Advanced Roadside Impaired Driving Enforcement (ARIDE) programs prepare law enforcement officers with advanced instruction in detecting and assessing drivers suspected of being under the influence of drugs. The urgency to fund these programs comes as more states legalize – or move to legalize – marijuana, and there is greater recognition that impaired driving issues go beyond just alcohol. The other provision funds the Alcohol and Tobacco Tax and Trade Bureau (TTB) at $111 million, which keeps the agency funding in line with previous levels and recognizes the important role it plays as the chief federal alcohol industry regulator. $5 million of the TTB’s funding is dedicated to enforcement of industry trade practices, which have increased over the past year with multiple joint investigations with state alcohol regulatory and enforcement agencies. Also included in the omnibus was language that amends the Fair Labor Standards Act to prevent employers, managers, or supervisors from collecting or retaining tips made by employees, regardless of whether they earn gratuities on top of a full minimum wage. The new law does allow tip-sharing between tipped and non-tipped employees (e.g. between servers and cooks) if a restaurant pays the full minimum wage to all employees. Obama Administration rules did not allow sharing of tips. |
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industry voices Summer Time Is the Right Time for a Cold Beer at Your Local Independent Retailer
T
he summer beer season is underway and whether you’re headed to the lake or a barbecue, be sure to pack a cooler full of cold beer to provide the perfect adult refreshments.
CRAIG PURSER President & CEO National Beer Wholesalers Association
Beer has always been a highly seasonal beverage, and while each local market is truly different, industry statistics show the is sector driven by hot temperatures, dry skies and plenty of summer activities. The chart below using Fintech data shows the peak summer selling weeks for beer across the country.
a staple for summer bonfires, concerts and baseball games. There are more varieties for consumers to enjoy than ever before and there is surely something for everyone. With the average distributor managing nearly 1000 SKUs, store shelves are full of new products and old favorites. New offerings attracting beer drinkers’ attention include hard seltzers, rosé ciders, beer shandies and fruit-infused beers. Whether you’re looking for orange, mango, grapefruit, pineapple or peach, today’s beer aisles are full of refreshing summer flavors perfect for summer when consumed in moderation. Not only do beer sales peak in the summer, but beer sold in cans also peaks. The convenience of cans makes it popular from the mountains and hiking trails to the beaches to boats.
The chart is indexed to 100 on the vertical axis to represent an average week of sales to retailers. The horizontal axis shows the 52 weeks of the 2017 calendar year. The U.S. sold an average of 54.4 million cases of beer per week during CY 2017. Yes, that’s a lot of beer! However, the seasonal variation around that average is more impressive. Starting early May with Cinco de Mayo all the way through Labor Day, there is an uptick in beer consumption that keeps beer distributors working hard to manage and deliver inventory to retailers. The week of July Fourth is consistently the number one beer holiday for the country, with sales to retailers 40% higher in week 26 than the weekly average. Memorial Day and Labor Day follow closely behind July Fourth as the second and third most important beer holidays. With today’s innovation across the alcohol beverage industry, it’s no wonder that beer is
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For those who want to get even more out of the summer beer season, find inspiration to fire up the grill with beer-centric recipes. BBQ sauce, marinades, burgers and even grilled veggies are even better when you make them with your favorite brew. Local beer distributors and retailers are experts at keeping their fingers on the pulse of the beer market and consumer preferences, and no matter what adventures or occasions are planned this summer, there are many great options from your local distributor to meet beer lovers’ demands. America’s independent beer distributors look forward to working with our local independent retailers to bring the consumer the refreshing beer they want. Cheers! |
industry voices Looking Back: Two Decades of Industry Leadership – Together
M
y career with WSWA began because of a fortuitous request.
While serving as Counsel to the Senate Judiciary Committee in 1998, a fellow attorney asked me to attend a meeting for him. “Something about wine,” he said. CRAIG WOLF President & CEO Wine & Spirits Wholesalers of America
That meeting introduced me to the major players and issues in the in-dustry at the time, and ultimately led to my being offered the role of WSWA General Counsel in 2000. I have remained at WSWA for the past eighteen and a half years, eleven and a half as President and CEO, because of my love of the industry and because of the support and encouragement I draw each day from dis-tributors, as well as our supplier and retailer partners.
Our industry has continued its leadership by opposing underage access, fighting for strict DUI and DUID enforcement, and maintaining an unparalleled record of product integrity. We have also helped move new leaders to the front of our ranks. Our young executive program, Council for Leadership Development, has grown from a couple dozen attendees to over 80 each year. This year, Sue McCollum of Major Brands, Missouri, became the first female WSWA Executive Committee member in the 75-year history of the organization, and our member-led Women’s Leadership Council has grown in just two years into a powerhouse of advocacy and outreach.
Over the last two decades WSWA and ABL have accomplished much as allies, and I’d like to use my last column as President and CEO to reflect on what we’ve done.
Our alliance with Drizly signaled that distributors believe there are ways to harness new channels to help suppliers and retailers better reach con-sumers, while maintaining the safeguards inherent in the three-tier sys-tem. The entire industry will be stronger because of Drizly and its three-tier compliant competitors.
When I began my tenure at WSWA, the association employed 12 staff members. Today we employ 23. Our budget at that time was approxi-mately $6 million per year; today it is over $11M per year. The WSWA staff and I have worked to expand our PAC from $340,000 per year to well over $1 million per year by broadening support from every level of ownership, management and operations.
Last year, we launched our “State Law Database,” an online resource that can help customers in all three tiers understand and navigate through the many state-specific laws and regulations in each market across the country. This year, we are poised to launch “SipSource,” a revolutionary depletion data project in partnership with VIP and Nielsen that will ben-efit users in all three tiers.
In recent years, WSWA state affairs efforts have expanded with Attor-neys General, regulators, and legislators to promote the primacy of state authority under the 21st Amendment and support core three-tier prin-ciples. As always, we have sustained a laser focus on key federal priorities, helping to pass resolutions supporting the three-tier system and de-livering increased funding for the Alcohol and Tobacco Tax and Trade Bureau (TTB).
There are many accomplishments on this list, but one of the most im-portant is the strong and sustained partnership between our associa-tions and members.
Individually and as coalition partners, we have raised awareness about the growing scourge of drug-impaired driving by gaining new funding for police officer training and enforcement.
As I move into the next chapter of my life, I look back proudly on what ABL and WSWA have accomplished, and I am encouraged about what the future holds for each organization and its members.
We have worked together to successfully block duplicative alcohol in-dustry regulation under the Food Safety Modernization Act, which would have unnecessarily increased compliance, sales and distribution costs of alcohol—negatively impacting consumers.
The bond between distributors and independent retailers is special to me because of our record together (and because I began my working life as a young man in my uncle’s Baltimore liquor store).
Thank you for the experience of a lifetime. |
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meeting highlights
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meeting highlights
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meeting spotlight 2018 ABL Top Shelf Award Recipient & Brown-Forman Retailers of the Year Recognized at ABL Annual Meeting Presents Sazerac President & CEO Mark Brown with 2018 Top Shelf Award ABL
Brothers/Big Sisters just to name a few of the organizations that Mark has taken the initiative to help.”
American Beverage Licensees (ABL) recognized Mark Brown, President & CEO of Sazerac Company, with the 2018 ABL Top Shelf Award at the association’s recent Honors Gala. The Gala took place on March 12 as part of ABL’s 16th Annual Meeting at Harrah’s New Orleans Hotel & Casino in New Orleans, Louisiana.
Mark also established a program to donate rare bottles of whiskey to various charitable causes around the country for auction, helping to raise hundreds-of-thousands of dollars, and is responsible for the annual Halloween trick-or-treat event at the “Trace,” holiday light displays each winter, and Easter egg hunt each spring.
The ABL Top Shelf Award is the highest honor presented by America’s beer, wine and spirits retailers, and recognizes those who have demonstrated professional excellence in the beverage alcohol industry and have had a positive influence in their community. “Independent retailers recognize and appreciate Mark’s steadfast commitment to our industry, the threetier system and a marketplace where bars, taverns and package stores build brands, service customers and are accountable to their communities,” PICTURED: Sazerac President & CEO Mark Brown ssaid ABL President Steve Morris, the owner of Jorgenson’s in Helena, Montana.
ABL congratulates Mark Brown on his well-deserved award and thanks him for his continued commitment to the beverage alcohol industry and support of noble causes within his community. |
From 1981 to 1992, Mark served as Director of New Products, National Sales Manager and, eventually, Vice President of Sales and Marketing with Sazerac. Brown left Sazerac and joined Brown-Forman (no relation) as Senior Vice President & 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.
ixteen Brown-Forman Retailers of the Year Recognized for Their Continued SCommitment to the Beverage Alcohol Industry at ABL Annual Meeting
As part of ABL’s 16th Annual Meeting at Harrah’s New Orleans Hotel & Casino in New Orleans, Louisiana, sixteen beverage retailers from across the United States were recognized as Brown-Forman Retailers of the Year in a ceremony at the ABL Honors Gala on March 12. Recipients were nominated by their state beverage associations for their success and dedication to the beverage alcohol industry. “The Brown-Forman Retailer of the Year Awards provide us with an opportunity to recognize and honor our members – those individuals who serve as the face of the beverage alcohol industry to the consumer,” said ABL Executive Director John Bodnovich. “When selecting these members for their awards, there are numerous aspects of small business ownership that are taken into account; among these are: excellence in advocacy, responsible sales and service practices, community engagement, and their support of their state affiliate.”
As with all Top Shelf Award recipients, community involvement has played a major role in Mark Brown’s life – both personally and professionally. “Not only has Mark grown Sazerac’s portfolio, but he has developed one of the most amazing corporate cultures you can find in any company. Mark has made Sazerac accountable to the community and that is part of what this award is about,” said Sazerac Chairman Bill Goldring. “Sazerac also makes significant financial investments and Mark has personally committed his time and treasures to various charities including the Louisville zoo, the humane society, cancer causes, and Big
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PICTURED: 2018 Brown-Forman Retailers of the Year & Their Business Partners b
member spotlight For more than two decades, the Brown-Forman Retailer of the Year awards have celebrated and recognized independent retail beverage business owners who engage in responsible sales and service of beverage alcohol, and who are committed to their state beverage associations. ABL congratulates all of the honored businesses and licensees for their outstanding and continued contributions to the industry and their communities.
United Beverage Retailers of Arkansas Becomes Newest ABL State Affiliate Member
“Thanks to the continued support of Brown-Forman and their sponsorship of the Retailer of the Year awards, ABL is able to honor the top on- and off-premise beverage retailers from the nearly 30 state retail beverage associations that ABL represents nationwide,” Bodnovich added.
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Brown-Forman, one of the world’s leading distilled spirits producers, has remained a steadfast sponsor of the awards, recognizing the importance of vibrant independent alcohol retailers, and continuing their support of those who are the last to handle beverage products before they reach the hands of consumers. In attendance to present awards to this year’s recipients was Teddy Graziano, Brown-Forman’s Louisiana State Manager, who thanked each of the recipients for their hard work and efforts to positively define the industry. |
Bringing its growing membership roster to the national association, Arkansas’s beverage licensees now join in the efforts of promoting and supporting the retail tier of the beverage alcohol industry in Washington, DC, just as ABL and its members will lend their collective strength to beverage retailers in the “Natural State.”
Save the Date
2019 ABL Annual Meeting
n May, ABL welcomed the recently-formed United Beverage Retailers of Arkansas (UBRA) as the association’s newest state affiliate member.
“In recent years Arkansas’ beverage retail industry has seen significant changes that are contributing to an increasingly competitive market for retailers, among other challenges,” said UBRA President John Akins. “United Beverage Retailers of Arkansas was formed to bring together independent beverage retailers across the state to provide education, training and networking opportunities that enhance their ability to successfully navigate the changing landscape, and to provide its members with unified representation before legislative and regulatory bodies.” When asked what drew UBRA to ABL, Akins noted, “through the partnership with ABL, UBRA will gain access to invaluable knowledge and resources that will allow UBRA to better serve Arkansas retailers and more effectively represent their interests.” By joining ABL, UBRA becomes the latest organization recognized as an ABL state affiliate, growing ABL’s member ranks to 28 associations from 28 states. ABL now represents beverage alcohol retail associations in nine of eleven states in the South region of the United States, including Alabama, Arkansas, Florida, Georgia, Mississippi, South Carolina, Tennessee, Texas and Virginia.
March 24-26, 2019 Bally’s Las Vegas Hotel & Casino
“UBRA was formed to advocate for beverage retailers in Arkansas and ensure fair regulation for beverage licensees. As they work to bring the voice of their members to the leaders in Little Rock, they will now have a voice to represent them in Washington, DC on a range of national issues directly impacting beverage retailers,” said ABL Executive Director John Bodnovich. “We are thrilled to add their perspective and clout to our national association as we work on issues that affect beverage licensees in all fifty states.” |
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music licensing ASCAP & BMI Consent Decrees: What You Need to Know
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HAT IS A CONSENT DECREE? A consent decree is a mutually binding agreement between two parties that resolves a dispute. Consent decrees are sometimes entered into by defendants being sued by the U.S. Department of Justice (DOJ) for antitrust violations. Currently, there are over 1,300 consent decrees in effect. WHAT ARE THE ASCAP & BMI CONSENT DECREES? ASCAP and BMI (performing rights organizations commonly known as “PROs”) voluntarily signed consent decrees in 1941 after the DOJ sued ASCAP for violating the Sherman Antitrust Act. Under the consent decrees, ASCAP and BMI are permitted to operate with monopoly pricing power for performance rights licenses only if they abstain from specific antitrust activities and agree to DOJ oversight of their businesses. These consent decrees provide the only check against PRO collusion and price-fixing. In 2016, the DOJ completed a two-year review of the ASCAP and BMI consent decrees, “determining that no modifications are warranted at this time.” Despite that finding, the DOJ is currently considering terminating the ASCAP and BMI consent decrees. WOULD TERMINATION OF THE CONSENT DECREES BE SUCH A BAD THING? That’s a fair question, but the answer is a resounding YES. It is true that the current music licensing system lacks sufficient transparency for bars, taverns and restaurants when it comes to knowing what they are getting when they purchase licenses to play music in their establishments. It is also true that instances of harassment and other heavy-handed tactics by PRO representatives and take-it-or-leave-it demands by PROs have led many bars, taverns and restaurants to drop live music altogether.
But the alternative – the DOJ terminating the ASCAP and BMI consent decrees – would be much worse. Here are some examples for comparison: WITH ASCAP/BMI CONSENT DECREES EFFICIENCY. PROs provide an efficient way for bars, restaurants and taverns to license musical works by aggregating large numbers of musical works into a single catalog. They then grant “blanket” licenses to bars and taverns for those works to be performed. FEE COLLECTION. PROs collect fees from licensees and distribute those royalties to affiliated copyright holders. PRICING EQUALITY. PROs collectively negotiate and must set prices at comparable rates for similarly-situated businesses. NON-DISCRIMINATION. PROs must grant licenses on behalf of their members on a non-discriminatory basis to everyone. WITH NO ASCAP/BMI CONSENT DECREES INEFFICIENCY. Terminating the ASCAP and BMI consent decrees – with no alternative in place – would throw the entire system of publicly performing music into chaos that could shutter bars, restaurants and taverns or force them to eliminate music altogether. UNCOLLECTED FEES. Songwriter compensation would almost certainly decrease, and fee collection would be less efficient. PRICING INEQUALITY. PRO monopoly rate-setting power would enable them, to force bars, restaurants and taverns to pay whatever rates they demand. DISCRIMINATION. PROs would be free to deny a license to any bar, restaurant or tavern they choose, essentially picking winners and losers in the marketplace based on whatever political, geographic or other criteria they wish.
Though many bars, restaurants and taverns face ongoing challenges when working with PROs – even with the consent decrees in place – the outcome of terminating the consent decrees would be nothing short of a nightmare scenario for bars, restaurants and taverns that play music. |
Disruption: More Than Just a Buzzword Continued from Page 5
4. Be Prepared to Defend Who You Are. It’s easiest to meet challenges with silence and not rock the boat, but ABL members are proud business people who stand behind their bars and store counters and interact, face-to-face, with their customers. This is the greatest opportunity that they have to demonstrate not just their relevance, but also their value to their customers and communities. The shiny new thing that is competing for their customers can’t necessarily be stopped, but it can be addressed. Showing customers what you do and who you employ and the service and experience you provide can set retailers apart and win over supporters who enjoy visiting their businesses.
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Until proven otherwise, disruption – in its many forms – appears to be the new normal. ABL will continue to work with its members to get more comfortable with what they can and should do to adapt to the changes that disruption brings. There’s also no doubt that some ABL licensees are going to take leadership roles and drive innovation themselves. As technology and social norms continue to develop, ABL will highlight their successes so other can learn and grow from them. |
state issue update Supreme Court of the United States Rules in Murphy v. National Collegiate Athletic Association... What Now?
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n May 14, the United States Supreme Court struck down a 25-year old federal statute known as the Professional & Amateur Sports Protection Act (PASPA), which largely outlawed sports betting outside of Nevada*.
there have been more than 50 bills proposed in 19 states that would legalize some form of sports gambling within their borders.
The case, Murphy v. National Collegiate Athletic Association, involves the state of New Jersey’s challenge to PASPA, which they claim violates the 10th Amendment, which states “the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” More specifically, New Jersey contended that PASPA unjustly enabled the federal government to order certain states to take specific actions to disallow sports gambling, while exempting other states from the same restrictions. Writing the Court’s 6-3 majority opinion, Justice Samuel Alito, Jr., argued “Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not.” Justice Alito further noted that “the provision unequivocally dictates what a state legislature may and may not do. It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals. A more direct affront to state sovereignty is not easy to imagine.” What’s the Current Market for Sports Betting? According to a 1999 study by the National Gambling Impact Study Commission, legal sports betting in Nevada amounted to approximately $2.8 billion annually – compared to anywhere between $80-$380 billion in illegal sports bets made annually. And that was in 1999. To put this in perspective, WiFi was first introduced to the public just a year before, in 1998. More recently, in 2017 gamblers spent around $4.9 billion legally gambling with Nevada sports books. According to industry experts, “this represents less than 4% of the total amount wagered on the activity in the U.S., which puts the amount Americans bet illegally on sports around $123 billion per year—more than 20 times greater than the legal, regulated, sports betting market” (Source: UNLV Center for Gaming Research). Looking at just the men’s NCAA basketball tournament, we can see how widespread sports betting is across the country – regardless of sports betting’s legal status. For the 2017 tournament, more than 24 million individuals completed some 60 million brackets, spending in excess of $2.6 billion on entry fees alone (Source: Forbes). Where Do We Go from Here? With a number of states anticipating that the Supreme Court would rule in New Jersey’s favor, legislators from across the country have introduced legislation directly related to sports betting during their respective state’s sessions this year. In fact,
Despite the Supreme Court’s ruling – and the various pieces of pending legislation at the state level – this is not to say that everything is going to change overnight or at the snap of a finger. While New Jersey has been preparing for legalized sports betting since 2011 when the state held a referendum on the issue (which passed in favor of with 64% of the vote) and some locations like racetracks could be ready to accept bets in weeks, this is definitely the exception to the rule. More realistically, it will likely be at least a couple of months before we really start to see any changes from the states. For starters, just because sports betting is no longer illegal at the federal level, the vast majority of states simply don’t have the requisite infrastructure and/or legal frameworks in place to properly oversee and manage such programs. According to Daniel Wallach, a sports gaming law expert and attorney at Becker & Poliakoff in Washington, DC, “states such as Connecticut, Illinois, New York, Massachusetts, Mississippi, Rhode Island and West Virginia could also race to get in the game within the next 90 days.” What Is ABL’s Position on Sports Betting? ABL maintains the position that if legalized, fully-licensed beverage retailers should not be prohibited from participating in the sports gaming marketplace.” The association is committed to providing our members with a wide-range of information, views and opinions on the topic so that they can make better-informed decisions on issues facing their states. To this end, ABL encourages all members to visit the recentlyupdated Members-Only section of the ABL website (www. ablusa.org/members-only/) and view the latest information that staff has compiled on sports betting (along with a range of other topics). If you need the password to the MembersOnly section, please contact your respective state association. | *Delaware, Montana & Oregon were also allowed to maintain their sports betting systems under PAPSA but they are not nearly as robust and/or wide-ranging as Nevada’s.
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