2019 - ABL Insider (Summer)

abl insider VOL. 13, NO. 2 SUMMER 2019

A PUBLICATION OF AMERICAN BEVERAGE LICENSEES

I WANT YOU Why ABL? To Protect America’s Independent Beer, Wine & Spirits Retailers

Brown-Forman Recognizes Retailer of the Year Award Recipients p. 3

ABL Annual Meeting Photo Highlights p. 6-7

Contrary to Some Popular Beliefs, State Liquor Laws Are Constitutional p. 10

the voice of america’s independent beer, wine & spirits retailer s

contents

calendar

P. 3: TOP SHELF

JUNE 2019

2019 Brown-Forman Retailers of the Year

June 10-12 | Louisville, KY Beverage Alcohol Retailers Conference

P. 4: LEADING

June 12 | Monroe, CT

J.J. Moran, President, ABL

CTPSA Annual Golf Tournament

P. 5: WHERE WE STAND

JULY 2019

John Bodnovich, Executive Director, ABL

July 9-10 | Madison, WI ABL Summer Board Meeting

P. 6-7: CONVENE

July 29-31 | Nashville, TN

Annual Meeting Photos

ECRS Ignite 19 Retail Success Conference

P. 8: INDUSTRY VOICES

AUGUST 2019

Craig Purser, President & CEO, NBWA

August 9-11 | Gatlinburg, TN TWSRA 2019 Annual Meeting

P. 9: INDUSTRY VOICES

August 25-27 | Boston, MA

Michelle Korsmo, President & CEO, WSWA

Center for Alcohol Policy 12th Annual Alcohol Law & Policy Conference

P. 10-11: RETAILER PERSPECTIVE

David Bevans, Owner, Legacy Wine & Spirits, Little Rock, Arkansas

SEPTEMBER 2019 September 9-11 | Sidney, MT MTA Annual Convention & Trade Show

P. 12: GUEST VIEW

September 12 | Indianapolis, IN

Jim McGreevy, President & CEO, Beer Institute

IABR Fall Golf Outing

September 15-17 | LeSalle, IL

P. 13: REST OF THE STORY

ILBA Annual Convention & Trade Show

Assorted Article Overruns

OCTOBER 2019

P. 14-15: STATE & LOCAL

October 10 | Indianapolis, IN

Stricter DUI Laws; NYC Bans Alcohol Ads; Retailer Appeals DtC Ruling to 8th Circuit

IABR Annual Meeting & Board of Directors Meeting

October 14-17 | Green Bay, WI

P. 16-17: D.C. UPDATES

USPS Shipping Equity Act Reintroduced; CBMTRA Gains Cosponsors; New Overtime Threshold Proposed

TLW 84th Annual Fall Convention

October 21-23 | Washington, DC ABL Fall Board Meeting & Industry Meetings

P. 18: AFFILIATE & ASSOCIATE MEMBERS ISSN# 2331-6594 (c) 2019 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.

PUBLISHED BY: American Beverage Licensees 5101 River Rd, Suite 108 | Bethesda, MD 20816 | (301) 656-1494 | www.ablusa.org editor MATTHEW EVANS director - trade relations & operations SUSAN DUFFY 2

ABL INSIDER

executive director JOHN BODNOVICH

director - Communications MATTHEW EVANS

TOP SHELF

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LEADING Why ABL? To Protect America's Independent Beer, Wine & Spirits Retailers

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s ABL’s recently elected president, I wanted to take this opportunity with my first “Leading” column to both introduce myself, and lay out my goals and vision for ABL during the next two years.

For those of you who I have not yet had a chance to meet or get to know, my name is J.J. Moran, and I am a beverage licensee from Cheyenne, Wyoming, where I have owned and operated Four Winds Liquor & Lounge for more than four decades.

The first of these questions – why does ABL exist – is the easier of the two to answer. In its simplest form, ABL exists for the purpose of protecting and defending the interests of America’s independent beer, wine and spirits retailers before members of Congress and regulatory agencies on a range of national and federal issues. We serve as the voice of America’s beverage licensees and lobby legislators on the importance of a vibrant, independent and well-regulated Three-Tier System.

I have also served multiple terms as ABL Vice President, as well as having served as the Co-Chair of the Communications & Membership Committee.

Locally, I have served in a number of elected positions within the Wyoming State Liquor Association during my nearly three decades of membership, including as president from 2013-2014.

Having witnessed firsthand the many challenges retailers face every day – whether from legislative, regulatory or public pressures – I look forward to working closely with the ABL Executive Committee, Board of Directors, state affiliates, ABL staff and our industry partners during my term as we strive to build our association and continue to represent the interests of independent, Main Street beverage retailers from across the country.

In examining how best to guide the association over the course of the next two years, I found it important to answer two key questions: why do we – American Beverage Licensees – exist and what are the real, tangible services we provided to our members?

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ABL INSIDER

J.J. MORAN PRESIDENT American Beverage Licensees

In looking to answer the second of these questions – what are the real, tangible benefits and services ABL provides to its members – I have come to the realization that we may not have done the best job of expressing and communicating this in the past.

A COLLECTIVE VOICE: ABL is committed to preserving the Three-Tier System established under the 21st Amendment and the rights granted therein to the states. While the voice of a single beverage licensee may not be heard by elected leaders, the collective voice of nearly 13,000 independent beer, wine and spirits retailers from across

the country rings loud.

A UNIFIED NETWORK: ABL membership provides a unified network for the independent retail tier of the beverage alcohol industry.

ABL provides a forum for its members to freely discuss pertinent and pressing issues – gaining valuable insights from fellow independent retailers from across the country.

AN INSURANCE POLICY: As business owners, we carry a range of insurance policies – property, injury, liability, workers compensation, etc. Much in the same vein, your membership in ABL serves as an insurance policy against threats to our industry – and thus threats to your businesses and livelihoods.

LEGISLATIVE TRACKING: While ABL tends to stay out of state-specific issues, it spends considerable time tracking legislative developments at the state and local level. ABL understands that legislative developments in Annapolis could lead legislators in Anchorage to pass similar legislation, and knows providing members with this information can assist them as they prepare for future legislative battles.

INDUSTRY EXPERTISE: ABL membership provides state affiliates with access to a range of information and resources, including ABL’s biennial economic impact report, state law database, subject matter consultants, national policy archive and more.

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WHERE WE STAND Keeping Current with a Changing Alcohol Marketplace & Consumer he headlines appear on what seems to be a daiT ly basis: “Worldwide alcohol consumption declines by -1.6% in 2018” “Millennials are spending less money on alcohol than previous generations. Now, brands are marketing their booze as ‘wellness’ drinks in a desperate bid to capture the market”

The recent decline in alcohol consumption (by volume) and the increase in consciousness of personal health and wellness were oft-covered topics at the ABL Annual Meeting in Las Vegas in March. Speakers from many different backgrounds touched on these trends, which goes to show that these are more than just talking points at an alcohol industry conference.

Looking at what beer, wine and spirits products are “hot,” as defined by a wide swath of industry analysts and media figures (as well as by just talking with ABL members who are seeing what product moves in their stores and bars every day), it’s evident that demand exists and is growing for low-calorie, low-carb options. “Runner’s beers,” hard seltzers, and generally the spirits category, to a certain extent, have found appeal, just to name a few examples.

It’s also clear that in many instances, consumers are spending money to drink better – not necessarily more. As the demographics of the alcohol consuming public change – Baby Boomers retiring, Millennials having kids, though not necessarily buying homes – their alcohol purchasing and consuming behaviors are also changing. And as has been noted in every presentation ever made about the “Millennial consumer,” they are experimental, not loyal to brands, styles or

even types of alcohol This is not to say that legacy, flagship or long-beloved brands don’t continue to hold relevance in consumers’ eyes or tap handles on bars or end-caps in stores, but consumer sentiment seems more fickle than ever.

So what are alcohol retailers to do in these changing times? Open a gym that serves drinks?

(Probably not.) Push to sell cannabis?

(An important question and topic for another column.)

JOHN BODNOVICH EXECUTIVE DIRECTOR American Beverage Licensees

KEEP UP ON DEVELOPMENTS THAT ARE MOVING THE INDUSTRY & THE MARKET: While ABL does a pretty darn good job of getting out relevant and meaningful information to its members, there seems to be an unprecedented number of media outlets dedicated to the alcohol industry that go from very broad to very niche. Something for everyone…just like the selection at your local bar or package store. Pick out some good ones (in addition to the ABL Weekly and @ablusa) and spend a few minutes a day staying current.

TRY TO DIFFERENTIATE TRENDS FROM FADS: “Hard soda” had its day in the sun a few years ago, coming into the market hot but

subsequently declining in popularity. Sure, there are some places where it still does well, but it is not as widespread as its creators might have hoped. Compare that to “hard seltzer,” to which many have wondered “Is this just this year’s hard soda or is this something different and sustainable from a market perspective.

Early returns are pretty positive that it’s here to stay and has room to grow.

THINKING CREATIVELY & LISTEN TO CUSTOMERS: Is the customer always right?

Opinions vary, but one thing is certain: The customer is always the customer. That’s tautological and circular, like my 2-year-old trying to justify why she deserves another M&M, but it’s also true. Without them, there is no business. Businesses bend over backwards to accommodate customers and learning from them about what they want and how you can meet their needs is paramount. Maybe that means carrying a second low-ABV beer (or even a no-ABV beer). Or using data analytics (like those offered to 3x3 Insights) to figure out what other items most commonly ride in the baskets of customers who purchase hard seltzer. Using tools, thinking creatively and listening to customers will help retailers adjust to a changing market.

These are just a few general ideas, but the larger point remains. Health consciousness, declining rates of alcohol consumption and the increasing competitive landscape for consumer “hospitality dollars” are not necessarily going away anytime soon. I’m sure there will be more chapters written about this exciting time in the beverage alcohol industry, but in the meantime, let’s keep up with the changes and continue preserve the vibrant independent retailers. | ABL INSIDER

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CONVENE

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CONVENE

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INDUSTRY VOICES Small Businesses Work Together To 'Serve' America Beer

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ach May we recognize National Small Business Week and reflect on how independent beer distributors and beverage licensees work together to serve America beer. And, serendipitously, Small Business Week coincides with National Tavern Month, giving us yet another reason to celebrate the gathering places that make neighborhoods feel like home.

America’s beer industry is keeping jobs in the rural areas, underserved communities, Main Street and downtown locations we call home. While some of these locales have been left behind by the modern economy, we have not and will not turn our backs on these communities of hard-working Americans.

The American system of alcohol distribution has become the best in the world for a few reasons. First, competition is fortified by a three-tier system separating production, distribution and retail. Our country relies on respected Main Street businesses like independent beer distributors and local retail outlets to responsibly sell this age-restricted, socially-sensitive product.

and porters, stouts and steam beers to suit each customer’s palate.

The outcome is a thriving beer market, which has grown from 49 breweries in the 1980s to nearly 7,000 today. Distributors now deliver over 13,000 different labels to more than 600,000 licensed retailers, maximizing consumer choice and ensuring there is a beer for even the most discerning patron.

This growth of choice and variety is not just good for finding a new flavor next to a familiar favorite in the beer aisle. Craft breweries are launching and introducing new brews to watering holes across the country in rural communities and urban areas.

America’s independent beer distributors are proud to be part of the community fabric in every state and congressional district across the country. Distributors directly employ 141,000 people and give hundreds of millions of dollars each year to philanthropic and non-profit organizations of all sizes.

Just like the Main Street businesses of American CRAIG PURSER Beverage Licensees, famiPRESIDENT & CEO ly-owned independent beer National Beer Wholesalers Association Second, distributors act bedistributors frequently show hind the scenes to guarantee the supply up as financial supporters at local events chain delivers only high-quality, safe, le- as we continue to build longstanding gal, traceable products consumers can community ties. trust. The problems of tainted alcohol and illegal bootlegging common in other Together, independent beer distribucountries are all but unheard of here, and tors and licensed retailers are working to that is because of independent distribu- serve America beer. Whether folks are tion working with trusted retailers. spending a night out or while sharing a 6-pack with friends, local small busiThird, the system is admired by other nesses help them get a cold beer in their sectors whose entrepreneurs and small hand. And, that’s something to celebrate! businesses want the same equal shot at success. Beer wholesalers foster com- A Version of This Column Originally Ran on petition in the beer market and provide Fox Business. | independent retailers with data and insights on the products people want, advocating for each bottle, can and keg on their beer truck.

Distributors handle logistics so smaller brewers and importers do not have to, educating retailers and pub owners about exciting new beers and preparing front-line staff to recommend pilsners 8

ABL INSIDER

INDUSTRY VOICES SipSource: A Game-Changer For Executive Intelligence

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he wine and spirits industry is in a great state of growth. With more choices available in the marketplace than ever before, American consumers continue to enjoy the widest selection of alcohol beverage product in the world. A benefit of the growing regulated American wine and spirits system is the assurance that products produced by registered suppliers, distributed by licensed wholesalers and sold by authorized retailers ensures products are consistently safe and free of toxic substances such as methanol—something other countries continue to wrestle with.

At the same time the industry and consumers are enjoying a mature and trusted system, elements of change and opportunities to adapt are presenting themselves at a pace not seen before.

WSWA works with our wine and spirits wholesalers as they continue to progress in line with suppliers and retailers in order to meet consumer needs, while preserving and improving upon the global standard for beverage alcohol.

Wines Vines Analytics, who share topline direct-to-consumer wine data.

SipSource provides product category and segment reporting. For example, users can see national trends in red wine broken down by pinot noir, cabernet, merlot and other varietals. And, one can see the data by channel segmentation, on- and off-premise, so you can see what’s happening in lodging, dining, bar and nightclub, grocery, and others.

Brands will not be reported except in top brand lists by category and certain product classes and channels. Platinum users can also view and sort the data through the industry platform, iDig. All data will be updated quarterly.

Another great feature of SipSource is the Industry Leaders Perception Survey of supplier and wholesaler executives. This survey is conducted every six months among industry leaders who offer their expertise on the future state of trends impacting the beverage-alcohol industry.

A large part of the changes From the first survey last we see involve technology’s quarter, industry insiders MICHELLE KORSMO impact on how we do busiexpect a continuation of PRESIDENT & CEO ness. Data in real time brings Wine & Spirits Wholesalers of America overall 2018 trends, with smarts and efficiency for all. rosé and sparkling leading The desire for data seems insatiable and wines, and mezcal and tequila leading WSWA is bringing better data to the wine spirits growth. The industry is focusing and spirits industry with the launch of our on premium products across the board, new data project, SipSource. a lot of which is due to the volume pressures from the emerging consumer SipSource is the only accurate and com- trends such as health and wellness. All plete source of distributor depletion data of this comes together to show that spir(sales to retailers) that provides insights its will grow at a modest rate of 2-5 peracross the wine and spirits industry. It’s cent, while wine stays mostly flat with a compiled from our wholesaler members 0-2 percent growth. and is a great example of what associations can do together.

Eighty-four percent of executives in the survey said that packaging would be a Currently, five WSWA wholesaler mem- significant or very significant factor in bers, including the four largest whole- product innovation in the next twelve salers, are providing their depletion data months, something that was very apparto show trends from the previous year. ent among products exhibited at WSThe report is created in partnership with WA’s 76th Annual Convention & ExposiVIP, an expert in data aggregation, Niel- tion in March. sen, who provides industry expertise and Continues on Page 13 contextual data, and A.T. Kearney who manages the semi-annual trends survey. Other collaborators include NABCA, who adds topline data from control states, and ShipCompliant by Sovos and ABL INSIDER

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RETAILER PERSPECTIVE Contrary To Some Popular Beliefs, State Liquor Laws Are Constitutional

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would like to share someinsights from a beverage alcohol retailer. Let me preface the following by stating that my views are strictly through the lens of the laws and regulations in my state of Arkansas.

To answer the question: YES. No matter how “crazy” you may think state liquor laws may be – they are, in fact, constitutional.

Under Section 2 of the 21st Amendment, Congress recognized that the best way to regulate the production, distribution and sale of beverage alcohol was to leave that decision to the individual states.

From establishing residency requirements, population-based license regulations and Sunday sales restrictions, to tap room sales restrictions and cold beer sales at convenience stores, the states – and their voters – are the ones who decide how alcohol will be sold within their borders. What works in New York City may not work in Salt Lake City. And that’s OK. To the point that “many states’ regulations seem more designed to suppress competition than to encourage safety,” I can’t help but be reminded of the talking points and cries of “consumer access” from national chain store lobbyists in Arkansas in 2017. That was the year independent retailers lost a hard-fought battle that now permits wine sales in grocery stores, convenience stores, gas stations, and pharmacies.

Many of us are multi-generational, family-owned businesses. Some of us have spent our life savings to open our businesses. We truly have “skin in the game” and are fighting for our businesses and trying to protect the interests of our customers.

As beverage retailers, we must operate within the confines of the laws and regulations established under the 21st Amendment but are increasingly bearing witness to the systematic deregulation of our industry to the sole benefit of corporations.

These corporations have no direct connection to the people they claim to be “protecting.”

In my state of Arkansas, a retailer is allowed ONE liquor permit. Yet grocery chains, big box stores or any national company that sells consumables is now permitted to have as many beer and wine permits that they want. These hundreds

“if suppressing competition was the real issue here, then these corporations should be required to abide by the same set of laws, regulations, and oversight (and face the same consequences for violations) that we do”

As we’ve seen in other states and localities across the country over the past few years, it is abundantly clear that these corporations and chains won’t stop until they have access to full beer, wine and spirits sales.

This raises the question: How would a vast and random expansion of liquor outlets “encourage safety” and promote “…a healthy relationship between the American people and alcoholic beverages”?

of new permits are being put in the name of individual “store managers,” with some store managers being listed on the permits of multiple stores.

Where is the equity, fairness and even application of the law in this approach?

On Wine Shipping: Aside from flying directly in the face of the Three-Tier System, there are a number of issues and As local, independent beverage retailers, concerns related to Direct-to-Consumer we make it a point to be responsible, in- (DtC) wine shipments. volved and upstanding members of the communities in which we operate. We Chief among these is accountability: what know our customers – they are both our systems are in place to ensure that those friends and neighbors. receiving shipments are over the age of 21? If wine is delivered to someone un10

ABL INSIDER

RETAILER PERSPECTIVE der the age of 21, who is responsible? The wine company that shipped it? The carrier company who delivered it? What are the consequences?

If suppressing competition was the real issue here, then these corporations should be required to abide by the same set of laws, regulations, and oversight (and face the same consequences for violations) If I were to sell the same bottle of wine that we do. to someone under the age of 21, I would likely have my license suspended and When a grocery store is found to have would have to close my business entirely sold to someone under 21 years of age, during that suspension. It is also hard to for example, they may not be able to sell accept that DtC wine shipping – with the alcohol for a few days, but the rest of lack of controls to prevent underage ac- their store remains open. If my license is cess – further creates a “healthy relation- suspended, my entire store is shut down ship between the American people and – even though I also sell non-alcoholic alcoholic beverages. items as well.

On Suppressing Competition: As licensed beverage retailers, we operate in an extremely competitive industry. We compete fiercely every day with stores across the state.

For decades, we have witnessed the slow and steady death of Main Street – where a once flourishing middle class of small business owners dotted the landscape.

Many have since closed-up shop because they can no longer compete with It is misleading to suggest that simply op- Corporate America. erating under a licensing system that effectively regulates the sale of an age-re- It’s a sad situation when the “Mom & Pop” stricted product equates to “suppressing stores close and employees are forced competition.” to find a job at “Brand Name Big Box Store,” which offers low wages, no health I just don’t see how the desires of small insurance, few hours and little room for business owners to protect their invest- advancement. This results in a net loss in ment can be construed as “suppressing prosperity of a community. competition.”

Lack of “consumer access” is a manufacBut now, we are being forced to compete tured, made up crisis. There is more alwith – quite literally – the largest retailers cohol available to consumers today than in the world! While these companies can ever before, which is somewhat ironic easily add a new product line, it proves given that alcohol sales are down naextremely difficult for small business li- tionwide due to a “slow-building trend of quor store owners to adjust their busi- moderation or not drinking at all.” ness models.

If independent liquor stores are run out Furthermore, due to their extensive list of of business through concerted efforts to other product lines, these corporations deregulate the alcohol marketplace, the have the luxury of using our sole product only “consumer access” that customers lineup as “loss leaders” (I mean, I can’t sell will be left with will be a small sampling pharmaceuticals, guns and ammunition of the “best deals” the national corporaalongside alcohol). tions have worked out.

Some insist that we must operate in a “free market,” but the reality is that the alcohol marketplace is one of the most highly regulated markets in the country, and for very good reason. It has long been recognized that liquor is “a lawlessness unto itself,” which when not properly regulated, brought about Prohibition.

State-based alcohol laws create an orderly market and foster public safety.

They spell out what we can sell; who we can sell it to; when we can sell it; how we can sell it; how and where we can store it; and how it’s taxed.

Who is the winner? Not small business – and certainly not American consumers. | This editorial was written by David Bevans, Owner of Legacy Wine & Spirits in Little Rock, Arkansas and ABL Member, in response to an April 12th article in the National Review entitled “Are Crazy State Liquor Laws Constitutional?

We are also not permitted to employ anyone under the age of 21 or anyone with a felony on their record.

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GUEST VIEW Beer Industry Could Thrive Even More Without Policy Anchors ore than 2.1 million Americans, including 912,000 who work for retail outlets like yours, owe their livelihood in some way to the beer industry. Beer packs a significant economic punch, contributing $328 billion to the American economy, equal to about 1.6 percent of the U.S. Gross Domestic Product (GDP).

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shows our economic impact on the nation’s economy has decreased. In 2016, we were responsible for 2.23 million jobs.

In 2018, that number dropped to 2.19 million. Many of those job losses weren’t direct brewery or distributor jobs; they were farther down the chain in the retail space, where your businesses operate.

We know these facts because the Beer Institute and the National Beer Wholesalers Association (NBWA) recently released our biennial Beer Serves America report outlining the vast economic scope of our brewers, beer importers and beer distributors, in addition to the millions of other jobs we support in agriculture, manufacturing, marketing and of course retail.

Although the aluminum tariffs are not 100 percent to blame for the 40,000 lost jobs, as there are multiple factors, the tariffs have forced brewers to make fewer investments and face tough decisions because of the added cost of aluminum, and that’s having an impact throughout other parts of our economy.

Although the beer industry is in many ways thriving, unfortunately, certain policies are hurting the beer industry and preventing us from creating even more good-paying jobs.

The excise tax relief American brewers and beer importers received in the Tax Cuts and Jobs Act at the end of 2017 helped offset the pain. However, that $130 million respite is set to expire at the end of 2019.

To help brewers reach their Last year, President Trump full innovation potential, as signed an executive order well as support good-payJIM McGREEVY establishing a 10 percent ing jobs, President Trump PRESIDENT & CEO tariff on imported aluminum. should end the aluminum Beer Institute The Beer Institute estimates tariffs, and the federal govthis tax has cost U.S. brewers nearly $350 ernment should investigate the pricing irmillion a year. regularities and other unfair market practices hurting brewers. Also, Congress Retailers know 60 percent of all beer pro- should make the federal excise tax relief duced and sold in the United States is permanent for all brewers and beer impackaged in aluminum bottles and cans. porters.

America’s brewers use more than 36 billion aluminum bottles and cans each year. These issues have bipartisan support in If stacked end-to-end those cans would Congress. In the House, Congressmen reach to the moon and back 12 times.

Al Lawson (D-FL) and Ken Buck (R-CO) have introduced the Aluminum Pricing I’ve heard from small brewers in New Examination (APEX) Act (H.R. 1406), which Jersey, large brewers in Milwaukee and would enhance the Commodity Futures places in-between, and they’re telling Trading Commission and Department of me the aluminum tariffs are increasing Justice’s authorities over aluminum price their costs. There are 7,000 breweries benchmarking entities. And the Craft Bevin America, and each brewer who cans erage Modernization and Tax Reform Act their beer decides for themselves how to (S. 362) (H.R. 1175), introduced by Senaabsorb that added expense, whether it’s tors Ron Wyden (D-OR) and Roy Blunt (Rraising prices, laying off workers or delay- MO) and Congressmen Ron Kind (D-WI) ing innovation and expansion, all of which and Mike Kelly (R-PA), would make the hurt a vibrant job-creating industry. federal excise tax relief permanent for all brewers and beer importers. It enjoys the The latest Beer Serves America report support of more than 60 Senators and 12

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REST OF THE STORY 200 members of the House. Just like your industry, beer touches every congressional district in the country, making it easy for lawmakers to see how we all help their local communities. If the federal lawmakers representing you and your business aren’t already cosponsors, please write or call asking them to support these bills.

And if they are already supportive, write or call to thank them for their cosponsorship.

country, but we could thrive even more without policies anchoring our potential.

To compete in this highly competitive beverage alcohol industry, America’s brewers and beer importers need certainty and stability when it comes to tax and trade policy.

The Beer Institute and its members look forward to continuing to work with American Beverage Licensees to ensure your Beer is the crown jewel of American man- consumers’ favorite beers are available ufacturing. I believe our industry will con- at their corner liquor store or local tavern tinue as a driving economic force for this and restaurant. |

CONTINUED FROM PAGE 4 LEADING

CONTINUED FROM PAGE 9 INDUSTRY VOICES

With this in mind, I am asking you to reach out to your fellow beverage licensees – especially those who aren’t currently members of your state associations – and let them know that their interests (and bottom lines) are under attack.

And, you will be pleased to hear the respondents were more optimistic about industry growth in wine and spirits than current data indicates. They expect retail to outperform current trends.

Let them know that whether threats from potential lawsuits for music licensing disputes or drive-by ADA lawsuits, to SCOTUS challenges to the Three-Tier System and efforts to permit national DtC shipping of beer, wine and spirits, ABL remains committed to defending their interests.

“Stronger Together.’’

“Altogether One.” “United We Stand.”

Call it whatever you want. The point I’m trying to make is this: our best approach to fighting these existential threats begins with us – the boots on the ground – to locally promote the benefits of membership in both ABL and your respective state associations.

While the issues and questions that beverage licensees face continue to change, it is more important than ever to get engaged through membership in national, state and local associations.

While it doesn’t cost a penny to sit on the sidelines, the price you’ll eventually pay will be far greater than the cost to get involved in the first place. |

This exciting new product is not only the first and only product to offer distributor depletion data, it is the first to offer actual data that does not use projections or estimations. This data will allow for more accurate planning between distributors and suppliers, allow businesses in the industry to benchmark their performance, and to identify channels and product segments that are trending up, down, and flat.

Times are changing and the industry is observing and capitalizing on new trends in consumer behaviors, unique products, and emerging technologies.

SipSource offers data covering sales to almost 330,000 retailers to reflect the current state of the industry and is a sure way to increase business intelligence and stay ahead of the curve.

More dimensions are already planned for future versions of SipSource, including regional/state trends and price tiers. As more WSWA wholesaler members participate and more data is aggregated, SipSource will continue to offer revolutionary insights into the wine and spirits industry.

For more information on SipSource, please visit SipSource.com or email info@sipsource.com. |

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STATE

& LOCAL

Legislatures Examine Lowering BAC Limit; Alcohol Delivery Expands; Curbside Pickup

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labama: Legislature Approves Sunday Alcohol Sales Bill Alabami ans won’t be able to get wine delivered to their homes anytime soon, but wet counties and municipalities can now have Sunday sales without going through the Legislature.

There were several alcohol-related bills in the 2019 legislative session that ended last month. Here’s what passed and what didn’t.

erating measure, calling for a government-run industry that would create jobs while padding state coffers with licensing fees and taxes.

Florida: State’s MarijuanaImpaired Driving Problem Revealed For the first time, we are beginning to understand the scope and magnitude of the marijuana-impaired driving problem in Florida. As 8 On Your Side disColorado: Should covered, preliminary data Common Consumption shows marijuana was a facBe Allowed for Alcohol in tor in nearly one in three Denver? drug-impaired crashes in The city of Denver is con- 2018. sidering a proposal to allow common consumption Georgia: Franchise of alcohol in certain plac- Reform Bill Introduced on es. The idea is to allow a Final Day of Session group of businesses, bars The Georgia legislative sesor restaurants to come to- sion wrapped up on April 2, gether to seek a license to but a bill aimed at instituting create an area where peo- several reforms the state’s ple can drink beverages franchise laws (H.B. 738) from different establish- was introduced prior to adjournment. The legislation, ments together. sponsored by Rep. Chuck Connecticut: House Martin, would let small beer Approves Bill Allowing companies that account for Self-Service Alcohol less than 15 percent of a Machines distributor’s total sales terImagine getting your beer minate contracts by giving or glass of wine like you 30 days notice, providing would a fountain soda. It the name of a successor may soon be a reality in wholesaler and paying fair Connecticut. The bill that market value. would allow self-service alcohol machines at bars just Illinois: Senate Approves got the thumbs up from the Legalizing Sports Betting, House of Representatives. Gambling Expansion You would get a card from The Illinois Senate is back in the bartender and swipe it session Sunday afternoon in an attempt to wrap up at the machine. the spring legislative sesDelaware: Marijuana sion with lawmakers facing Legalization Bill Clears House-approved plans for First Legislative Hurdle higher fees for motorists A bill to legalize marijuana for road construction and in Delaware cleared its first measures to authorize a legislative hurdle Wednes- casino for Chicago and leday, with the House Reve- galize sports betting. nue and Finance Committee voting after a two-hour Illinois: Raising Liquor hearing to release the Taxes in Illinois Will measure for consideration Become an Absolute Folly by the full House. It’s being Governor J.B. Pritzker protouted as a revenue-gen- posed increasing liquor 14

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taxes as a way to pay for his capital plan. His proposed plan would increase the tax on beer from 23.1 cents to 27.7 cents per gallon, would increase the tax on wine from $1.39 to $2.05 per gallon, and would increase the tax on spirits from $8.55 to $12.60 per gallon.

Kansas: Bars Can’t Be Sued by Victims of Their Drunk Patrons, State Supreme Court Says Kansas is one of just a handful of states that doesn’t allow a person injured by a drunk driver to sue the retailer who furnished the alcohol. On Friday, the Kansas Supreme Court upheld that 34-year-old rule, saying it was up to the Legislature to change it.

Massachusetts: State Inches Cautiously Toward ‘Cannabis Cafes’ If you’re at least 21 in Massachusetts, you can legally buy recreational marijuana at more than a dozen stores that have opened over the past several months. But when it comes to using those products, the law says you can only do so discreetly and privately. That could change.

Montana: State Considers Taxing Convenience Store Alcohol Buying a beer or wine at the corner convenience store in Big Sky could soon cost people more. Already when dining in Big Sky any alcohol consumed is taxed.

Those taxes go towards the Resort Tax Fund, which last year totaled more than $8 million. Now the board of directors is considering taxing convenience store alcohol, like the kind you can pick up at gas stations and grocery stores.

STATE New York: Impaired Driving Repeat Offender Measure Introduced Westchester County Executive George Latimer joined Congresswoman Nita Lowey on Friday afternoon, May 24 in front of the Westchester County Stop DWI Simulator to urge responsible and safe driving over the holiday week and throughout the summer. In addition to the warning to “drive sober or get pulled over.”

New York: 186 Alcohol Sellers Charged in Underage Drinking Crackdown More than 180 establishments holding New York state liquor licenses have been charged with serving minors during last month’s statewide crackdown on underage drinking. That’s according to state officials who say April’s monthlong enforcement effort resulted in charges being filed against 186 out of the 851 bars, restaurants, liquor stores and grocery stores in 46 counties that were visited by underage decoys working with investigators.

Oklahoma: New Law Challenged by Members of Alcohol Industry The Oklahoma State Supreme Court was asked Tuesday to block the implementation of a new alcohol distribution law.

Fourteen petitioners from local and national alcohol businesses are challenging Senate Bill 608. They argue the bill violates the state’s constitution, which pertains to alcohol distribution and was amended when voters passed State Question 792 in 2016.

Oregon: Lawmakers Discuss Bill to Drop State’s Drinking Limit to .05 Sen. President Peter Courtney didn’t expect to pass a bill to lower Oregon’s legal drinking limit to .05 blood-alcohol content this legislative session, but the Salem leader wanted to

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start the conversation. On Tuesday, the Senate Judiciary Committee did just that. Courtney, the Salem Democrat, got his wish for an informational hearing on his proposal to lower Oregon’s legal drunken driving limit from .08 to .05.

Texas: Senate Moves to Let Breweries Sell Beer to Go; Make it Easier to Own Several Liquor Stores The Texas Senate restored a measure Wednesday allowing breweries to sell beer to go from their taprooms to a bill allowing the Texas Alcoholic Beverage Pennsylvania: State Commission to continue Supreme Court Makes operating. It also approved Ruling Affecting DUI a measure that would loosCheckpoints en restrictions on the numThey are called sobriety ber of liquor store permits checkpoints. And many individuals can hold. local police forces team up to set them up, like the Utah: State Legislature West Hills DUI Task Force. Is Going to Take Another “A group of municipalities Look at .05 band together and hold Lawmakers will discuss a checkpoint in one spe- Utah’s controversial .05 DUI cific municipality and pull law and whether any modover all of the motorists, ifications need to be made typically driving through to it. The law, which went the municipality that eve- into effect on New Year’s ning,” Michael Sherman, a Eve, has been placed as DUI defense attorney, told a study item for the Utah KDKA political editor Jon State Legislature’s Business & Labor Interim ComDelano on Monday. mittee. Sen. Curt Bramble, Tennessee: State R-Provo, told FOX 13 the Supreme Court Rules committee wanted to exCities Are Not Required to amine its impact.

Share Liquor Tax Wisconsin: More Grocers Proceeds with Counties Tennessee’s highest court Seek to Offer Curbside ruled Wednesday that cit- Alcohol Pickup ies with their own school More Wisconsin grocers systems do not have to are asking municipalities for share liquor tax proceeds liquor license extensions so with counties. Revenue they can take alcohol purgenerated by the state’s chased online out to cus15% tax on liquor-by-the- tomers’ vehicles. Walmart drink goes to the Commis- and Pick ‘n Save first startsioner of Revenue, who ed offering curbside pickkeeps half of it and sends up of beer, wine and spirits the other half back to the in the Milwaukee and Fox city or county. Those funds Valley areas in 2017. Other stores quickly followed, but go toward education. the practice has been met with criticism that it could Texas: Governor Signs allow minors to buy alcohol Bill Expanding Alcohol or make liquor access easHome-Delivery ier in a state that’s known Texans who like to order to overindulge, Wisconsin home delivery of prepared Public Radio reported. meals from grocery store cafes can have wine and ale brought to them as well under a bill signed by Gov. Greg Abbott. Currently, cafes at groceries such as H-E-B’s Central Markets and Amazon’s Whole Foods Markets may deliver beer that is less than 5% alcohol by volume to people’s homes.

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D.C. UPDATES USPS Shipping Equity Act Reintroduced; CBMTRA Gains Cosponsors; New Overtime Threshold Proposed ABL Opposes USPS Shipping Equity Act On May 3, Rep. Jack Speier (D-CA) reintroduced the USPS Shipping Equity Act (H.R. 2517). This bill would allow the U.S. Postal Service (USPS) to ship alcohol directly to consumers.

2017. Should it fail, excise tax rates would revert to their pre-2017 levels.

Industry associations supporting the CBMTRA include Brewers Association, Beer Institute, WineAmerica, Wine Institute, Distilled Spirits Council, American Craft The bill was introduced with 12 original Spirits Association, and U.S. Association cosponsors. ABL joined the National Beer of Cider Makers.

Wholesalers Association and the Wine & Spirits Wholesalers of America on a letter New Overtime Threshold Proposed to Congress urging them to oppose the The U.S. Labor Department has announced its long-awaited proposed legislation. As the letter points out: overtime threshold, raising the minimum Allowing the USPS to deliver alcohol salary exemption to $35,308 per year. would undermine these benefits of state Currently, employees with an annual salregulation of alcohol by opening a chan- ary below $23,660 must be paid overnel of delivery through which potentially time if they work more than 40 hours per harmful foreign or domestic-sourced al- week. cohol could enter U.S. commerce; creating easier access to alcohol for an underage Workers making less than the $35,308 consumer through unregulated deliveries; threshold would automatically be eligible diminishing the ability of states and local for time-and-a-half pay on hours worked governments to collect excise and sales beyond 40 each week. tax revenue and preempting state laws with disregard for the 21st Amendment to The department is seeking public comment on the proposal. The new proposal the Constitution. is below what the Obama administration ABL Supports Main Street Certainty Act proposed in 2017, $47,476 a year, which Along with other members of the S-Corp was eventually dismissed by a federal Association, ABL has signed a business judge. community letter in support of H.R. 216, the Main Street Certainty Act sponsored Bills to Ban Cashless Stores Introduced

by Rep. Jason Smith (R-MO). The bill re- U.S. Reps. David Cicilline (D-RI) and U.S. peals the sunset of Section 199A of the Rep. Donald Payne (D-NJ) have introTax Cuts and Jobs Act, the 20-percent duced bills that would force brick-andmortar retail stores, including restaurants, pass-through deduction. to accept cash.

Under the Tax Cuts & Jobs Act, the 199A deduction goes away after 2025, resulting The legislation comes amid growing in a significant tax hike on pass-through backlash against retailers moving to only businesses beginning 2026. Rep. Henry accept card or electronic payments that Cuellar (D-TX) is the lead Democrat on are believed by some to discriminate against lower income individuals. the bill.

The Cash Should Always Be Honored Act (H.R. 2630), authored by Rep. Cicilline, would authorize the Federal Trade Commission to enforce the prohibition on cashless stores. Rep. Payne’s bill, the Payment Choice Act (H. R. 2650), allows consumers to sue stores that do not accept cash, and sets fines of $2,500 for a first offense and $5,000 for subsequent violations. Attorneys general could intervene in civil cases brought against ofThanks to a big push by the supplier-tier fending companies. of the alcohol industry, the CBMTRA has garnered 56 Senator and 193 Represen- Retail Trade Associations Pan Trump tative cosponsors. The bill would make Tariff Plan permanent the excise tax relief for alco- The National Retail Federation (NRF) and hol producers and importers enacted in the Retail Industry Leaders Association Craft Beverage Modernization & Tax Reform Act Gains Cosponsors The Craft Beverage Modernization and Tax Reform Act (CBMTRA) (S. 362) was reintroduced in the U.S. Senate on February 6, and in the House on February 13 (H.R. 1175), with support from a broad group of alcohol industry supplier-tier trade associations representing the beer, wine, spirits, and cider sectors.

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D.C. UPDATES (RILA) have criticized President Trump’s threat to raise tariffs on $200 billion in Chinese goods from 10% to 25%, arguing that the move will hurt American businesses and consumers, and disrupt U.S. businesses that have limited ability to ease the impact.

A report from Trade Partnership found that increasing tariffs on $200 billion of goods to 25%, coupled with tariffs already in place and retaliation, would reduce U.S. employment by over 934,000 jobs, cost the average family of four $767 and reduce U.S. GDP by 0.37%, according to the NRF. SAFE Act Passes Out of House Financial Services Committee In late March, the House Financial Services Committee voted 45 to 15 to pass the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595).

Aluminum Pricing Examination Act Re-Introduced With the support of the Beer Institute, American Beverage Association, Brewers Association and Can Manufacturers Institute, U.S. Reps. Al Lawson (D-FL) and Ken Buck (R-CO) have reintroduced the Aluminum Pricing Examination (APEX) Act (H.R.1406).

The bipartisan legislation would ensure a fair and free market for the pricing of aluminum and grant the Commodities Futures Trading Commission (CTFC) authority to conduct oversight of the aluminum market and investigate price setting, benchmarking and reporting entities.

Senate Bill Would Protect Kombucha from Excise Tax: Sen. Ron Wyden (D-OR) has introduced legislation, the Keeping Our Manufacturers from Being Unfairly taxed while Championing Health Act (KOMBUCHA) Authored by U.S. Reps. Ed Perlmutter (S. 926).

(D-CO) and Denny Heck (D-WA) and cosponsored by Reps. Warren Davidson The bill would eliminate excise taxes on (R-OH) and Steve Stivers (R-OH), the bill Kombucha manufacturers’ products that allows marijuana-related businesses in contain more than 0.5% alcohol by raising states with existing regulatory structures the limit on ABV for kombucha to 1.25% to access the banking system. and makes the product exempt from excise taxes imposed on alcoholic beverAs cannabis is currently considered il- ages like beer. legal under the federal Controlled Substances Act, financial institutions provid- Kombucha is a fermented product, creating banking services to legitimate and ed when sugar and yeast are combined. licensed marijuana businesses are sub- When kombucha is not kept cold, it conject to criminal prosecution. Since state tinues to ferment, raising the alcohol level and federal law are not aligned on the above 0.5% and making it subject to the issue, cannabis businesses are forced to excise tax. In the U.S. in 2018, kombucha operate on a cash-only basis. was a $1.2 billion industry.

Pressure Growing to Raise Tobacco Age to 21: Thanks to an increasingly diverse and bipartisan coalition that includes Congressional leadership, tobacco and vaping companies, and an uptick in states passes similar laws, the effort to increase the federal age limit for buying tobacco products from 18 to 21 is growing.

Senate Majority Leader Mitch McConnell (R-KY), as well as “tobacco state” Senator Tim Kaine (D-VA), have recently voiced their support, with McConnell introducing a bill on May to raise the federal age for purchasing tobacco products, including e-cigarettes, to 21 The bill would make it illegal under federal law for retailers to sell tobacco and e-cigarettes products to anyone under age 21. It would also require states to enact their own laws raising the tobacco-purchasing age to 21 or risk not receiving federal substance abuse grants as soon as FY 2021. | ABL INSIDER

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