ABL Insider: 2016 Winter Edition

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

ABL INSIDER VOL. 10, NO. 4 | WINTER 2016

A PUBLICATION OF AMERICAN BEVERAGE LICENSEES

Viva Las Vegas!

ABL Returns to Vegas March 26-28 for 15th Annual Meeting 2017 Annual Meeting Preview (p. 3)

Results From State Ballot Initiatives (p. 10-11)

ABL’s Year-In-Review (p. 14)

VOL. 10, NO. 4 | WINTER 2016

contents

3 annual meeting preview

ABL’s 15th Annual Meeting - Las Vegas, Nevada

10-11 election highlights

Results from State Ballot Questions & Initiatives

4 leading

12 on the hill

5 where we stand

13 regulatory update

Warren Scheidt, ABL President

ABL Co-Hosts Capitol Reception; Surgeon General’s Report

John Bodnovich, ABL Executive Director

6-7 dc update

EMV Lawsuit Moves Forward; Election Recap; and More

Overtime Rule on Hold: Guidance for Beverage Retailers

14 state of the organization ABL’s Year-In-Review

8 industry voices

15 state & industry update

9 industry voices

16 associate & affiliate members

Craig Wolf, President & CEO, WSWA

Craig Purser, President & CEO, NBWA

industry calendar FEBRUARY 2017

APRIL 2017

Responsible Hospitality Institute Leadership Summit Austin, TX

February 12-14

Tavern League of Wisconsin Spring Convention & Trade Show La Crosse, WI

American Craft Spirits Association 4th Annual Distillers Convention Nashville, TN

February 16-17

American Distilling Institute Craft Spirits Conference Baltimore, MD

MARCH 2017

Craft Brewers Conference & BrewExpo America Washington, DC

April 3-6 April 3-6

April 10-13

March 12-14

National Alcohol Beverage Control Association Legal Symposium Arlington, VA

March 26-28

2017 Annual Meeting Las Vegas, NV

March 27-29

April 18-21

Wine & Spirits Wholesales of America 74th Annual Convention & Expo Orlando, FL

April 30-May 3

National Beer Wholesalers Association Legislative Conference Washington, DC

Night Club & Bar Convention & Trade Show Las Vegas, NV

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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ABL INSIDER

ISSN# 2331-6594 (c) 2016 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

annual meeting preview ABL Returns to Las Vegas in March for 2017 Annual Meeting merican Beverage Licensees will A return to Las Vegas, Nevada for the 2017 ABL Annual Meeting, taking place March 26-28, 2017 at the Monte Carlo Resort & Casino.

The meeting will include informational sessions, product demonstrations, and various networking opportunities for meeting attendees, and will be held concurrently with the Nightclub & Bar Show 2017. The 2017 annual meeting will mark ABL’s 15th anniversary and bring together on-premise and offpremise beer, wine and spirits retailers from across the country – as well as representatives from the three tiers of the beverage alcohol industry.

Resort & Casino, just steps from the Las Vegas Strip. ABL has secured a discounted nightly rate of $88.00 ($58.00 room rate + $30.00 daily resort fee) for attendees booking before February 24, on a first-come, first-served basis.

Consider booking your room early as the room block is limited and may fill up prior to the deadline. Book your room by calling (888) 529-4828 and referencing “XABL2017” to receive the discounted rate.

New for 2017, your registration also includes complimentary access to the Nightclub & Bar Show 2017.

“Following last year’s Annual Meeting, ABL made a concerted effort to increase the value-adds for our meeting attendees by working to provide an alternating on-premise and offpremise tie-in. For 2017, this means holding our meeting in Las Vegas concurrently with the Nightclub & Bar Show 2017,” said Warren Scheidt, ABL President.

To stay up-to-date on the 2017 ABL Annual Meeting including speaker announcements and social events, visit www.ablusa.org and follow the ABL Annual Meeting on Twitter at @ ABLUSA or on Facebook. |

The 2017 ABL Annual Meeting, which marks the organization’s 15th Anniversary, will focus on the key issues facing beverage licensees – along with examining the continuing evolution of the beverage alcohol marketplace.

Welcome Reception

“ABL is extremely excited to return to Las Vegas for our 15th Annual Meeting,” said ABL Executive Director John Bodnovich. “The last time ABL was in Las Vegas was in 2012 for our 10th Annual Meeting, so it is only fitting that we return to the Entertainment Capital of the World to celebrate our 15th anniversary.”

Registration for the 2017 ABL Annual Meeting is open to ABL members and non-members interested in learning more about the key issues facing beverage licensees. Registration for the annual meeting is $299 and is currently open. Unless otherwise noted, registration includes access to all general sessions and hospitality events.

The host hotel for the 2017 ABL Annual Meeting is the Monte Carol

2017 Annual Meeting Registration Includes Annual Luncheon

SATURDAY, MARCH 25th 3:00-5:00 p.m.

Executive Committee Meeting (Invited Guests Only)

SUNDAY, MARCH 26th 8:00-9:00 a.m.

ABL Board of Directors Breakfast (Sponsored by Presidents’ Forum)

9:15 a.m.-5:00 p.m.

ABL Board of Directors Meeting

9:15-9:30 a.m.

Announcements, Executive & Finance Committee Reports

9:30-10:30 a.m.

Open Government Affairs Committee Meeting & ABL Report

10:30 a.m.-12:00 p.m.

ABL Committee Meetings

12:00-1:00 p.m.

Lunch

1:15-4:00 p.m.

Board Meeting

4:00-5:00 p.m.

ABL Advisory Council Meeting (ABL State Affiliate Executives)

6:00-8:00 p.m.

Opening Night Welcome Reception (Sponsored by NABI)

General Sessions

MONDAY, MARCH 27th

ABL Board of Directors Breakfast

Breakfast

Retailer of the Year Awards ABL Honors Gala (Featuring the ABL Top Shelf Award Presentation)

8:00-9:00 a.m.

9:15 a.m.-12:00 p.m.

General Sessions

(Session Presentations TBD)

12:00-1:15 p.m.

Annual Luncheon

1:30-3:30 p.m.

2017 ABL Annual Meeting Registration Also Includes Complimentary Access To Nightclub & Bar Show 2017 Welcome Kickoff Party

All Nightclub & Bar Show 2017 Expo Keynote Presentations Nightclub & Bar Show 2017 Expo Hall Access (Two-Days)

General Sessions

(Session Presentations TBD)

6:00-7:00 p.m.

Retailer of the Year Reception

7:00-9:30 p.m.

ABL Honors Gala

(Retailer of the Year Awards & Top Shelf Award Presentations)

TUESDAY, MARCH 28th 8:00-9:00 a.m.

Breakfast

9:15-11:00 a.m.

ABL State Alcohol Policy Meeting

12:00-6:30 p.m.

Night Club & Bar Trade Show

(Las Vegas Convention Center Expo Hall)

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leading Reflecting Upon a Successful 2016 & Looking to the Year Ahead

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WARREN SCHEIDT President American Beverage Licensees

ith the elections behind us, the holiday season in full swing and 2016 drawing to a close, I wanted to take this opportunity to reflect upon ABL’s many activities, achievements and successes over the course of the past year – while also providing a look ahead at the year to come.

Staff has worked diligently to ensure your best interests are represented at the national level, with Executive Director John Bodnovich attending more than 50 meetings with members of Congress and their staffs; multiple federal agencies; and industry and coalition partners.

Additionally, he participated in over 25 interviews with multiple news outlets - including Bloomberg and Politico. Staff has also attended numerous meetings and events hosted by many of ABL’s sponsors and industry partners.

In May, the organization hired a new Communications Manager, who has hit the ground running. In the seven month’s he has been on the job, ABL’s social media presence has increased dramatically; the quarterly newsletter - ABL INSIDER - has been revamped; we launched a redesigned and fully mobilized website; and are working to expand advertising opportunities for the organization in both print and digital publications.

The Trade Relations & Operations department has done an excellent job working with our Staff Affiliate members and the organization’s various committees – ensuring that ABL continues meeting its strategic goals and fulfilling its commitment to the more than 12,000 members we represent. The department has also worked diligently to maintain and improve relations with the industry sponsors and partners whose continued support of ABL cannot go without recognition.

I would also like to personally offer a sincere and heartfelt thank you to all the businesses and organizations who continue to support our mission. It would be extremely difficulty - if not impossible - for ABL to serve its purpose and fulfill its mission without the sponsorship and support you provide to our organization. As such, I’d like the thank the following: Diamond Level: Beer Institute; Diageo; National Beer Wholesalers Association; and Wine & Spirits Wholesalers of America.

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Platinum Level: Bacardi USA; Beam Suntory, Inc.; and Distilled Spirits Council.

Gold Level: Brown-Forman; Castle Brands; CharmerSunbelt Group; Pernod Ricard USA; Republic National Distributing Company; Southern Glazer’s Wine & Spirits, LLC; and Wine Institute.

Silver Level: Constellation Brands; Moët Hennessy USA; Monarch Beverage Company; Patrón Spirits Company; Remy Cointreau USA; and R.J. Reynolds Tobacco Company.

Bronze Level: Presidents’ Forum of the Distilled Spirits Industry; and Sidney Frank Importing Co.

For a more detailed look at the successes of the organization over the past year, be sure to check out the ABL’s Year-In-Review feature on Page 14.

Looking ahead to 2017, we have a couple things for you to keep your eye on: ABL Association Tip of the Month New nembers-only benefit featuring tips and insights on topics such volunteer engagement; increasing social media presence; importance of strategic plans; and more.

15th Annual Meeting ABL returns to Las Vegas for its 15th Annual Meeting March 26-28 at the Monte Carlo Resort & Casino. I strongly encourage everyone to register, as this is sure to be one of the best annual meetings yet! Visit the ABL website for all the latest information.

Last, but certainly not least, I would like to thank you – the on- and off-premise retailers that ABL represent – for your continued support. From all of us at American Beverage Licensees, we wish you and your families Happy Holidays and a Happy New Year! |

where we stand 2017: What’s in Store for Beverage Licensees in Washington?

F JOHN BODNOVICH Executive Director American Beverage Licensees

or the second time in 12 years, a teetotaler has been elected President of the United States. A divisive election is now behind us, and for associations, now is the time to organize and plan on behalf of their members. That is certainly the case with ABL, as we look ahead to 2017 and the 115th Congress – and what policy battles lay ahead.

the door for greater transparency in the music license marketplace.

By capturing the White House, and maintaining control of the Senate and the House of Representatives, Republicans now will oversee a significant shift in power in Washington, D.C. It is safe to say that an energized Republican Congress will seek to maintain their campaign promises and reverse policies enacted over the last eight years – including healthcare, financial and economic measures. Congress tends to be most active when one party rules, and on the heels of a famously inactive Congress during an 18 month-long Presidential election cycle, there’s plenty of work to do.

Taxes, Taxes All Around A key plank in the Trump Administration’s campaign platform was sweeping tax reform, though specifics have been hard to settle on thus far. House Speaker Paul Ryan (R-WI) is also passionate about tax policy, dating back to his days at the chairman of the House Ways and Means Committee. Given those two facts, a major tax reform package (House Republicans are using a blueprint called “A Better Way” as a point for starting the conversation.) will likely arrive in the first half of 2017.

While a cottage industry has sprung up around reading the tea leaves for who will and who won’t join the Trump Administration, ABL has been looking at who will lead important Congressional committees, and how that will shape the legislative agenda. Here are a few issues that ABL expects to work on in the upcoming Congress.

Copyright Reform & Bringing Greater Transparency to the Music Licensing Ecosystem ABL has spent much of the last year talking to its members, and members of Congress, about what it is like to license music from PROs like ASCAP, BMI and SESAC. That experience – and some of the frustrations that accompany it – is a piece of a larger discussion about copyright in America, and what can be done to improve the copyright environment as it relates to the music ecosystem.

Following the ASCAP and BMI requests to review the consent decrees – which govern their actions, allow for a quasi-monopolistic arrangement in the name efficiency for users, and are in place to prevent further anti-trust violations – it is clear that the Department of Justice’s affirmation of 100% licensing (the right of a licensee to legally use all the works in a PRO’s repertoire and born out in blanket licenses that have been offered for sale for decades) opens

ABL expects both the House Judiciary Committee and the Senate Judiciary Committee to work on meaningful legislation in the 115th Congress to address copyright reform, including music licensing.

House Ways and Means Committee Chairman Kevin Brady (R-TX) is accelerating the process – even before the new Congress is sworn-in – and while House and Senate GOP visions of tax reform will likely differ, the House seems poised to go first. But given the scope of the changes that are being discussed, and the number of businesses and people affected by taxes (just about everyone), there will surely be a fight.

For ABL, alcohol excise taxes are always something that we keep an eye on. ABL has consistently opposed increasing the federal excise tax (FET) on alcohol, and has applauded industry groups for finding common ground when advocating for federal excise tax reform.

While it is possible, if not likely, that FET reform will be included in legislative language, there are a handful of other business tax issues that could help – or harm – ABL members.

Possible reforms include: the permanent elimination of the estate tax (help); changes to “border flexibility” tax laws that would drastically increase the cost of imported consumer goods including beer, wine and spirits (harm); allowing states to collect online sales tax, thus creating a level playing playing field for online and brickand-mortar retailers (help); and offsetting lower corporate tax rates by increasing S-Corp tax rates (harm).

Continued on Page 13

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dc update Federal Judge Rules EMV Lawsuit May Move Forward; 2016 Federal Elections Recap; Capitol Hill Calendar Fatalities Up for Highway First Half of 2016

The National Highway Traffic Safety Administration (NHTSA) reported in October that traffic deaths jumped by 10.4% to 17,775 in the first six months of this year, according to a preliminary estimate. The second quarter of 2016 was the seventh consecutive quarter that fatalities rose compared to the same quarter the previous year. While no specific causes were given, NHTSA did note a 3.3% increase in number of miles driven.

Meanwhile, the National Safety Council (NSC) has reported that texting is a driving factor in the increases.

According to the NSC, the percentage of drivers texting or manipulating handheld devices increased from 0.9% in 2010 to 2.2% in 2014.

Federal Judge: EMV Lawsuit May Move Forward

businesses across the United States, per lawyers involved in the case.

Obama Administration Says ‘No’ to e-Cig Regulatory Changes

Signaling its opposition to any Congressional efforts to change the Food and Drug Administration’s oversight of e-cigarettes and cigars, the FDA’s chief tobacco control official has warned legislators against attaching riders affecting tobacco regulation to spending bills in the lame duck session.

Faced with new FDA oversight that went into effect in August and calls for time-consuming and costly research by e-cigarette makers on their products, the tobacco industry has supported an amendment to the House Agriculture appropriations bill (HR 5054) that would allow most e-cigarette products that are currently on sale to skip the review process and stay on the market.

A class action antitrust lawsuit filed against Visa, MasterCard and American Express by two Florida retailers has been allowed to move forward by a U.S. District Judge. Florida-based B&R Supermarket Inc. and Grove Liquors LLC are suing on behalf of merchants nationwide and allege that the card companies colluded to assign liability for fraudulent transactions to merchants who did not meet the October 2015 EMV deadline.

“The final deeming rule could not be implemented and enforced if that rider passed as drafted,” said Mitch Zeller, the head of FDA’s Center for Tobacco Products. “I am not going to debate the merits of these riders. I will state as a fact that the administration opposes them and we will see what happens as Congress goes about its business for the remainder of the year.”

allowed the antitrust suit to proceed, saying that the two Florida retailers “plausibly allege an impermissible conspiracy” by major credit card companies to impose the same penalty on merchants not using a certified chip card reader by October 1, 2015. The grocery store owners have yet to be granted class action status. If they are, the case could include 8 million small

Congress is expected to back in session from November 14 to December 16 to tackle many important issues. At the very least, legislators will be charged with passing a spending bill to keep the government operating past December 9, which is when current funding will expire. Senate Majority Leader Mitch McConnell (R-KY), has said he wants to work on legislation that would expand

funding for medical research, while House Speaker Paul Ryan (R-WI), who will be part of potentially messy House leadership elections in November, has ruled out consideration of the TransPacific Partnership trade deal. The lame duck is also an opportunity for associations and other organizations to position their issues for 2017. What happens in the lame duck could affect the agenda for the 115th Congress and many groups are working with that in mind.

Flawed “Financial CHOICE Act” Lingers in Lame Duck Congress

Earlier this fall, the House Financial Services Committee (HFSC) passed the Financial CHOICE Act (H.R. 5983).

The legislation is a sweeping financial regulatory reform bill that would undo most of the Dodd-Frank legislation from 2010. Included in the bill, and of great importance to beverage retailers, is a provision (Sec. 335) that would repeal debit card swipe fee reforms – commonly referred to as the “Durbin Amendment.” While there is not much of a window for this bill to make it to the House floor during the current lame duck session, ABL is working with its partners in the merchant community to urging House members to not bring the Financial CHOICE Act to the floor for a vote in December.

President Says Marijuana Should Be Treated the Same Way as U.S. District Judge William Alsup Following the elections on November 8, “Cigarettes or Alcohol”

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Congress Comes Back for Lame Duck Session

In a recent Rolling Stone interview, President Obama reiterated his position regarding marijuana, noting “I am not somebody who believes that legalization is a panacea. But I do believe that treating this as a public-health issue, the same way we do with cigarettes or alcohol, is the much smarter way to deal with it.” Considering the everincreasing number of states which have

dc update passed both medicinal and recreational marijuana laws, the President argued that “it is untenable over the long term for the Justice Department or the DEA to be enforcing a patchwork of laws, where something that’s legal in one state could get you a 20-year prison sentence in another.”

Retailers Fear Massive Tax Increases Under House Republican Tax Plan

Reports recently surfaced regarding House Republicans’ plans to dramatically rewrite the tax code in the coming year, which will potentially have a major impact on U.S. retailers across all sectors. While details on the proposed changes to the tax code have not been finalized, it is understood that while lowering the overall corporate tax rate to somewhere in the 20% range, the revisions would also include raising taxes on imported goods.

If put in to place, the plan – commonly referred to as a “border-adjustable, destination-based tax system” – would result in a fundamental swift in U.S. tax policy, with the federal government taxing a company based on where their products are sold, rather than taxes being assessed based on where the company is located.

In response, retailers have launched new lobbying efforts on Capitol Hill, noting to various lawmakers on both sides of the aisle that any proposed tax increases were likely to be passed along to consumers – the same people responsible for electing them to their offices.

David French, National Retail Federation Chief Lobbyist, noted “Our members have told us that the import tax could be as high as five times their profits. I don’t know how viable some retailers would be in the face of this import tax.”

While the plan is still in its early stages and no definitive decision has yet to be made, ABL continues to monitor the issue closely and is working with our industry partners to determine the best approach to ensuring the interest of our members are heard.

Congress Passes Reauthorization of STOP Underage Drinking Act

In December, Congress passed the 21st Century Cures Act, which will provide $6 billion for cancer research, fighting the increasing opioid epidemic, and funding mental health treatment (among other programs). In doing so, Congress also provided reauthorization of the Sober Truth on Preventing (STOP) Underage Drinking Act. As noted by NBWA President & CEO Craig Purser, “The STOP Act provides the necessary tools to government at the federal, state and local levels to help prevent alcohol consumption by those who are not of a legal drinking age.

This landmark legislation addresses the health and safety issues involved with underage drinking while recognizing that alcohol is different from other consumer products and is best regulated by the states, consistent with the 21st Amendment.”

Initially passed in 2006 with bipartisan support, the STOP Act has worked to highlight safety and health concerns associated with underage drinking across the country. The Act also provides various funding sources for state level programs and initiatives addressing these problems. Reauthorization of the Act was supported by public health organizations, alcohol control groups, ABL and other beverage alcohol industry groups, including NBWA.

2016 Federal Elections Recap

President: Donald J. Trump (R) will serve a four-year term as President with Vice President Mike Pence. By capturing the White House, and maintaining control of the Senate and the House of Representatives, Republicans now will oversee a significant shift in power in Washington, D.C.

Republicans now hold a 51-47 lead in the 100-seat Senate, with races in Louisiana and New Hampshire yet to be finalized. Republicans will control 5153 Senate seats in the 115th Congress, a net loss of only one to three seats. In the 2018 elections, the tables will turn as Democrats must defend 25 seats compared to 8 seats for Republicans. It is possible that Republicans could gain control of 60 Senate seats following the 2018 elections.

U.S. House of Representatives: In the House of Representatives, the GOP also enjoyed positive results, having maintained its majority. Republicans entered the night with 247 seats, and appear to have limited their losses to about seven seats.

Democrats picked up three seats in Florida, two in Nevada, and one each in Illinois, New Hampshire, New Jersey, and Virginia. Republicans picked up two seats in Florida. All said, the Democratic Party gained only six House seats in 2016, resulting in a 241-194 majority for the Republican Party.

Capitol Hill Calendar:

Dec. 9: Continuing Resolution to Fund the Government Expires Dec. 16: Target Date for Sine Die Adjournment of Congress Jan. 3: 115th Congress Sworn In; House Elects a Speaker Jan. 3-30: House & Senate Member Committee Appointments Jan. 20: Presidential Inauguration |

U.S. Senate: Republicans successfully defended their Senate majority, despite a tough map – 24 of the 34 Senate seats contested were held by Republicans – and limited pick-up opportunities.

GOP incumbents survived tough challenges in Missouri, North Carolina, Pennsylvania and Wisconsin, and won an open seat in Indiana.

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industry voices Beverage Alcohol Is A Major Economic Driver

O CRAIG WOLF President & CEO Wine & Spirits Wholesalers of America (WSWA)

wners and managers in the beverage alcohol industry do a good job explaining the threetier system to regulators and legislators. We are well versed in the important benefits and historic roots of this system and our industry. And, we consistently highlight our work and partnership with regulators and industry partners, that has helped build an impeccable product safety and social responsibility record.

But we don’t talk often enough about the positive economic benefits of our industry. As we enter a new year and a new political and policy era, I’d like to share with you some of the positive data we collect about our industry and encourage all of you to help us share this good news with local, state and federal government officials and regulators, with the news media – and with your employees.

WSWA’s team of economists produces reports on our industry as well as the various sectors of the economy that benefit from supporting companies in each tier. I reviewed these numbers to prepare this column, and it’s inspiring to look at the breadth and depth of our industry’s economic impact.

Together, wine and spirits wholesalers and retailers employ over one million American workers.

Considering all the businesses in the country and all the sectors of the economy, this is staggering: one out of every 100 workers in this country is employed by a wholesaler or retailer. Some 65,000 U.S. workers are employed by wine and spirit wholesalers while 969,000 are employed in the retail sector of the beverage alcohol industry. The wholesaler industry alone pays about $5 billion in employee wages every year.

The beverage alcohol industry supports some 30,000 workers in agriculture; 111,000 in business and professional services; 2,500 in mining; 7,600 in construction; 45,000 in general manufacturing; 40,000 in transportation; and 21,000 in travel.

These are the industries that serve our facilities – cleaning, equipment, logistics and goods management, electricity and refrigeration, legal support, inventory and human resources. The list is endless, from food trucks to forklift companies.

Our industry offers an ever-expanding and seemingly endless range of products, brands and categories. It is no hyperbole to say that it provides the widest array of products and the widest selection available anywhere in the world – bar none. With the explosive growth in

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regional, craft and specialty wineries, distilleries and breweries, the number of offerings is on a vertical trajectory for the foreseeable future. At the same time, established brands are redoubling investment in marketing and promotions – the horizon has never been wider.

Generally speaking, wholesalers report an average warehouse contains between 7,000 and 13,000 different SKUs of wine and spirits products. On the retail side, a grocery or warehouse store may contain 500-1,000 different SKUs of product while specialty and independent retailers may have well over 1,000 and upwards of 2,000 SKUs in diverse wine and spirits shops. Some of the large national retail chains stock well over 10,000 SKUs in each store.

The sale of these products generates some $54 billion in state and local taxes each year, another $7 billion in federal excise taxes and nearly $20 billion in business taxes for Uncle Sam. To say nothing of the customs and import taxes and duties levied on imports, or the income taxes paid out of worker paychecks.

On top of that, consumers pay the state and federal government $27 billion in sales taxes and $53 billion in business taxes every year, supporting all manner of important (as well as those arguably inefficient or unimportant) government programs.

Wholesalers and independent retailers are almost all family-owned – most now in the second or third generation and some in the fourth generation.

What one generation grows and builds, the next must manage in order to pass it on. Whether it is a mom and pop store, a small chain of shops or a tavern or restaurant – or a wholesale operation: the challenges are the same and the result for owners is equal. Each family is growing its own economic independence and stability and that benefits the economy and provides good paying jobs for employees.

No matter how you slice it, or what other sector you compare us to, family owned wholesalers and independent retailers, along with private and publicly-traded supplier partners, are central components of America’s economic engine.

Policy fights and legislative battles may come and go, regulations can change and change again – but one key fact remains: America’s wholesalers and retailers are strong partners and are an economic force. That’s a story we should share far and wide.|

industry voices 2017 Promises To Be As Exciting As 2016

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f the closing months of 2016 provided any hint at what 2017 has in store, it showed us that change is going to continue in a major way.

CRAIG PURSER President & CEO National Beer Wholesalers Association (NBWA)

Of course the largest example of change came in the presidential election. Very few polls predicted a win for Donald Trump, yet in just a few weeks he will take the oath of office and become the nation’s 45th president.

As the Trump administration begins to take shape, there are still many questions. With a Republican-controlled House and Senate, will he be able to get his agenda passed and put into action? Who will he appoint to the Supreme Court? Will tax reform for small businesses be passed? These and other issues will shape much of 2017 in Washington, D.C., making it more important than ever for America’s independent beer distributors and independent alcohol retailers to make their voices heard in the halls of Congress.

Change will not be limited to our nation’s capital, as state legislatures across the country will also continue to deal with a myriad of issues. The 2016 elections doubled the number of states that have legalized recreational marijuana from four to eight. There is a question of whether President Trump will continue to allow states to legalize marijuana, but – if he does – Maine, Massachusetts, Nevada and California will be the next four states tasked with creating a regulatory system for marijuana to ensure it is properly regulated.

In the beer industry, 2016 concluded with the United States Department of Justice (DOJ) completing its review and a tentative approval of the Anheuser-Busch InBev/SABMiller merger.

One major element of the DOJ’s approval of this deal was the affirmation of a strong independent distribution tier that provides market access and supports competition for all brewers. The settlement explicitly aims to preserve the ability of smaller brewers to compete by protecting their access to important distribution networks to reach retailers like ABL members.

With this global merger of the top two beer companies likely to be concluded in the early part of the year, 2017 is likely to return focus to the states and the continued growth and emergence of the craft brewing segment of the

industry. When a consumer goes out with 20 dollars in their pocket, are they going to an ABL licensed retail establishment or are they going to a brewery venue? Small brewers in many states will be seeking greatly expanded retail privileges in a variety of ways, and retailers need to be aggressive and make their voice heard in this debate. The attempts to evolve a tasting room, where the beer is brewed and shared for the purpose of sampling and awareness, into fullscale music and bar venues directly concern independent retailers. Where does the taproom end and the tied house begin? Closing retail jobs for brewery jobs does not create more jobs.

Retailers must engage in this policy discussion.

Similarly, big retailers are increasing their aggressive lobbying and litigation efforts to reshape state alcohol laws. Large retailers achieved historic victories on alcohol policies in various states in 2016, and their legislative wish list will grow in 2017. Independent retailers will need to be even more focused and organized and emphasize their local impacts in all of these challenges confronting the industry – in the courts, in the legislature and before the media and the public.

There are few industries as exciting, fun or rewarding as the alcohol industry. While challenges and change have become a constant in the last several years, the future of the industry will remain bright if independent beer distributors and retailers continue to work together to support policies that deliver the choice, selection and value that consumers demand. |

“Change Will Not Be Limited to Our Nation’s Capital in 2017, as State Legislatures Across the Country Will Also Continue to Deal with a Myriad of Issues.”

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election highlights Results of November 2016 State Le

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n addition to the election of the 45th President of the United States, the November 8th elections saw voters from across the country presented with a wide range of local and state ballot questions and initiatives. Among these were efforts to:

Washington State Voted “Yes” to Increase the State’s Minimum Wage, With the Wage Set to Increase to $13.50 per Hour by the Year 2020

Colorado Voted “Yes” to Increase the State’s Minimum Wage, With the Wage Set to Increase to $12 per Hour By the Year 2020

• Increase state minimum wages by the year 2020; • Legalize use of medicinal and/or recreational marijuana; • Increase state cigarette excise taxes; • Permit Sunday alcohol sales; and • Repeal existing “dry law” ordinances.

Here, we have highlighted the results from some of the key state and local ballot initiatives from the 2016 election cycle. |

California Voted “Yes” to Allow Recreational Use of Marijuana.

Arizona Voted “Yes” to Increase the State’s Minimum Wage, With the Wage Set to Increase to $12 per Hour by the Year 2020

The State Also Voted “Yes” on Prop 56, Increasing the State’s Cigarette Excise Tax by $2/Pack (Up from the Current Tax of $0.87 per Pack)

Nevada Voted “Yes” to Allow Recreational Use of Marijuana

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North Dakota Voted “Yes” to Allow Medicinal Use of Marijuana

election highlights evel Ballot Questions & Initiatives State Question 792 Passed Despite Opposition from Oklahoma’s Liquor Stores

Residents in Hamilton County Voted “Yes” to Allow Wine Sales in Retail Food Stores

Residents of Butler County Voted “Yes” To Allow Sunday Alcohol Sales

Maine Voted “Yes” to Allow Recreational Use of Marijuana AND to Increase the State’s Minimum Wage to $12.00 per Hour by the Year 2020.

The City of Clinton Also Voted “Yes” to Go Wet

Massachusetts Voted “Yes” to Allow Recreational Use of Marijuana

The County of Haywood Voted “Yes” to Go Wet Residents of Greenville County Voted “Yes” to Allow Sunday Alcohol Sales Georgia Voted “Yes” on Amendment 2, Which Imposes a New Tax of Strip Clubs & Other Adult Entertainment Businesses The County of Lula Also Voted “Yes” to Go Wet, While Garden City Voted “Yes” to Allow Sunday Alcohol Sales Florida Voted “Yes” To Allow Medicinal Use of Marijuana The City of Milton Also Voted “Yes” to Allow Sunday Alcohol Sales

The Counties of Copperas Cove, Houston Heights, and Robinson Voted “Yes” to Go Wet

Arkansas Voted “Yes” to Allow Medicinal Use of Marijuana

The Last Remaining Dry County in the Sate Hartselle - Voted “Yes” to Go Wet

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from the hill ABL & Industry Partners CoHost November Reception for the Congressional Responsible Hospitality Caucus

he hospitality industry in the United States T is equal parts innovative, progressive and spirited. As a whole, the industry employs

millions of individuals from across the country – which in turn produces billions in tax revenues at the state and national levels. The hospitality industry includes those working for bars, taverns, restaurants, package stores, wholesalers, importers, brewers, distillers, vintners, and other retail sales operations.

Rep. Tom McClintock (R-CA) Rep. Sean Duffy (R-WI)

Rep. Derek Kilmer (D-WA)

Rep. Jim Sensenbrenner (R-WI)

Rep. Donald Norcross (D-NJ)

Operating within a framework of the threetiered system, these businesses strive to ensure the socially responsible production, delivery and consumption of beverage alcohol to the American consumer.

In recognition of the important role and impact the hospitality industry has on the nation, Rep. Sean Duffy (R-WI) and Rep. Derek Kilmer (D-WA) formally launched the Congressional Hospitality Caucus back in June of 2015. With an aim to provide a forum in which members of Congress can explore issues facing beverage alcohol retailers, distributors and producers, the Caucus works to draw further attention to the hospitality industry’s commitment to social responsibility, the economic impact of the industry, and the federal policies and regulations that shape this significant sector of the American economy.

With Congress’ return to Washington, D.C., following the November elections, ABL along with industry partners The Presidents’ Forum and the Wine & Spirits Wholesalers of America (WSWA) - jointly hosted a reception at the U.S. Capitol Building on November 15th with honorary co-hosts Reps. Duffy & Kilmer.

Drawing roughly 40 attendees – including a number of House Members along with several of their chiefs of staff and legislative directors – the reception provided ABL, the Presidents’ Forum and WSWA with an opportunity to provide attendees with updates on the state of the three-tiered system and answer questions from those in attendance.

Attendees included: CRHC Co-Chairs Reps.

Sean Duffy (R-Wis.) and Derek Kilmer (D-Wash.); Reps. Bill Johnson (R-Ohio), Dave Loebsack (D-Iowa), Pete DeFazio (D-Ore.), David Joyce (R-Ohio), Ami Bera (D-Calif.), Tom McClintock (R-Calif.), Donald Norcross (D-N.J.), Rodney Davis (R-Ill.), Bob Dold (R-Ill.), and Dan Lipinski (D-Ill.). |

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Update: U.S. Surgeon General Releases Report on Alcohol, Drugs & Health

O

n November 17, U.S. Surgeon General Dr. Vivek H. Murthy released a landmark report placing alcohol and drug addiction alongside other public health crises such as mental health, smoking, and suicide prevention.

The report, Facing Addiction in America: The Surgeon General’s Report on Alcohol, Drugs and Health, represents the first time that a surgeon general has addressed Vice Admiral Vivek H. Murthy, MD, MBA substance abuse disorders as diseases which can be addressed by the nation.

The report raises serious and important issues regarding the impact of substance abuse on the nation, including a large focus on the opioid epidemic. With respect to alcohol, the report leans on studies – many of which are more than a decade old – to reiterate well-worn recommendations for beverage alcohol policy that are generally promoted by the Centers for Disease Control & Prevention (CDC) and other public health activists.

Key findings from the report - as they relate to alcohol policy recommendations - include the following: • •

•

At the policy level, research shows that higher alcohol prices reduce alcohol misuse and related harms (e.g., alcohol-related motor vehicle crashes), and taxes are one component of price.

Research suggests that an increase in the number of retail alcohol outlets in an area – called higher alcohol outlet density – is associated with an increase in alcohol-related problems in that area, such as violence, crime, and injuries One study found that lifting a ban on Sunday sales of alcohol led to an estimated 41.6 percent increase in alcohol-related fatalities on Sundays during the period from 1995 to 2000, equating to an additional cost of more than $6 million in medical care and lost productivity per year in one state.

In response to the report, industry partners the Beer Institute, Distilled Spirits Council and Wine Institute issued a statement noting “the prevailing and widely accepted research shows that one-size-fits-all policies, including advertising bans and tax increases, fail to effectively address the problem of alcohol abuse, divert resources from more targeted approaches, and unfairly and negatively impact moderate and responsible consumers.”

It is also worth noting that relative to other reports of this nature, which often take years to produce, this report was commissioned in 2015 and published in 2016.

Furthermore, the report relies heavily on “studies of studies” and lacked a public comment period prior to its release. |

regulatory update Department of Labor – Overtime Rule on Hold: Guidance for Beverage Retailers PDATE: U On Tuesday, November 22, U.S. District Court Judge Amos L. Mazzant III issued a preliminary injunction halting the December 1, 2016 implementation of the Department of Labor’s (DOL) new overtime rule.

KEY TAKEAWAYS: Judge Mazzant rejected the DOL’s efforts to move ahead with implementation, arguing that the overtime rule change exceeded the department’s mandate under the Fair Labor Standards Act, and that Congress – not the DOL – should be the authority when it comes to whether such a rule change is ultimately implemented.

Judge Mazzant noted “If Congress intended the salary requirement to supplant the duties test, then Congress and not the department should make that change,” per Bloomberg.

While the injunction is only a temporary measure that suspends the regulation until the judge can issue a ruling on the merits, many have said the judge’s language indicated he is likely to strike down the regulation. With President-Elect Trump promising to overturn several regulations implemented during the Obama administration – coupled with Republican control of both the House and Senate – the fate of the new rule remains in question.

ABL POSITION: Earlier this year and before the November elections, ABL supported legislation (H.R. 5813) that would incrementally phase in the new salary threshold over the next three years to give businesses adequate time to adjust to the new standard, while also eliminating a provision that allows for automatic updates to the salary threshold every three years. ABL was also supportive of bipartisan legislative efforts to delay implementation of the rule for six months. With a new political dynamic coming to Washington in January, ABL will Continued from Page 5

Driving: Not Just Alcohol Anymore Irolempaired Beverage licensees have long prided themselves on taking an active in the fight against drunk driving, advocating for comprehensive

solutions that aggressively target hardcore offenders instead of trying to move the goalposts. Recently, there has been an uptick in impaired driving policy discussion, thanks in large part to the growing number of drug-impaired driving incidents. With recreational marijuana now legal in 9 states, and an opioid epidemic ravaging parts of the country, law enforcement, legislators and public health officials are looking for new ways to stop drug-impaired driving. Oddly, it has been argued by some in the public health advocacy profession that the best way to do this is through an increased focus on drunk driving.

Also of note was the National Transportation Safety Board’s recent and renewed call for states to adopt .05 BAC as the legal threshold for drunk driving. Since the NTSB’s initial push for this change in 2013, no state has changed its laws, keeping .08 BAC as the law of the land. ABL and its industry partners have supported the strong enforcement of .08 laws, while rejecting calls for .05, which result in the misuse of enforcement resources and the misguided harassment of responsible social drinkers that would follow.

Durbin Amendment & Swipe Fee Reform in the Crosshairs Despite the competition that debit card swipe fee reform has brought

evaluate supporting anticipated legislative initiatives to more permanently address this matter.

BACKGROUND: In 2014, President Obama directed the Department of Labor (DOL) to update the regulations defining which white collar workers are protected by the Fair Labor Standards Act's (FLSA) minimum wage and overtime standards, and to look for ways to modernize and simplify the regulations while ensuring that the FLSA's intended overtime protections are fully implemented. The DOL subsequently published a Notice of Proposed Rulemaking (NPRM) and accepted more than 290,000 public comments.

On May 18, 2016, the White House announced the publication of the Final Rule. According to the Administration, the rule will extend overtime eligibility to more than 4 million additional workers within the first year of implementation. The Final Rule updates the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, it: •

Increases the minimum salary level for “white collar” employees to qualify as exempt from overtime pay requirements from $23,660 to $47,476 a year, or from $455 to $913 a week. The rule will not affect hourly or other non-exempt workers who are already eligible for overtime pay;

•

Automatically updates the salary and compensation threshold every three years. The first update would be Jan. 1, 2020. The DOL projects a salary threshold of $51,000 by Jan. 1, 2020; and

•

Allows employers to apply non-discretionary bonuses and incentive payments (including commissions) to up to 10 percent of the new salary level. |

to the marketplace and the savings it has created for consumers, the banking industry’s opposition to the 2010 measure has finally found a vehicle for undoing the reform in the Financial CHOCIE Act. The bill, a more than 500-page amalgamation of previous financial bills and core focus of House Financial Services Committee Chairman Jeb Hensarling (R-TX), passed out of committee in 2016, and is expected to receive similar support in 2017.

ABL continues to meet with members of Congress to educate them on debit swipe fee reform (many members were not serving in Congress at the time of its initial passage) and explain the significant harm that would be done to the retail community should the law be repealed.

Overtime Regulations President-Elect Trump has vowed to under Obama-era regulations with the stroke of his pen and prerogative of executive action.

On such regulation that could be on the chopping block is a new overtime scenario that significantly increased the threshold for overtime-exempt employees. While the regulation was set to take effect on December 1, 2016, a judge’s preliminary injunction has halted its implementation and a number of bills before Congress would have delayed or altered its impact. ABL has supported delay legislation, but with the new governing dynamic in Washington, will be evaluating other alternatives or overtime regulations. |

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state of the organization Working for You: ABL’s Year-In-Review ational Holiday & Beverage N Alcohol Celebrations: In May, ABL launched a new social

media campaign on Facebook and Twitter highlighting key holidays (i.e.

Memorial Day, Labor Day, Veterans Day, Thanksgiving, etc.) – as well as “beverage alcohol celebrations” such as National Moonshine Day, National Tequila Day, National Drink Beer Day, and more!

This campaign has had a significant impact on increasing the organization’s social media presence in all key metrics.

2016 Annual Meeting: In June, ABL welcomed over 100 attendees to the organization’s 14th Annual Meeting held in Denver, Colorado. Attendees heard from speakers who covered a wide array of topics including music licensing, craft beer, recreational marijuana regulation, and federal and state alcohol policies.

The meeting also provided ABL with an opportunity to recognize those who make a differ-once in the industry – with sixteen beverage licensees from across the country were recognized with the 2016 Brown-Forman Retailer of the Year awards at the ABL Honors Gala.

Also recognized was the 2016 ABL Top Shelf Award honoree, Peter Coors.

Membership: In July, the Delaware Small Business Leadership Council (DSBLC) joined ABL as the organization’s newest affiliate member, growing ABL’s member ranks to 31 affiliate members from 28 states.

With the addition of the DSBLC, ABL now represents beverage alcohol retail associations in six of eight states in the Mid-Atlantic region of the country, including Delaware, Maryland, New Jersey, New York, Pennsylvania, and Virginia.

ABL News Note of the Day: Also in July, ABL launched an additional social media campaign: “ABL News Note of the Day.” Featuring a topical, industry-related news article every Monday-Friday, this campaign has been well received – by both membership and the public – resulting in significant increases to ABL’s social media presence in all key metrics – on both Facebook and Twitter.

Music Licensing: In August, the Department of Justice (DOJ) issued a ruling affirming their continued support of the consent decrees governing the practices of

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ASCAP and BMI. This ruling followed an exhaustive multi-year review – at the request of the PRO’s – and confirmed that “full work” and “blanket” licensing grants licensees with the right to use all the works from a given PRO’s repertoire without rise of copyright infringement.

The PRO’s have been pushing back, however, with BMI filing suit against the DOJ soon thereafter. This resulted in a September ruling in their favor from Judge Louis L. Stanton of the United States District Court in Manhattan, who argued it was unequivocal that the interpretation of the Justice Department’s antitrust division was incorrect – writing that “nothing in the consent decree gives support to the division’s views.”

While the issue is far from settled, ABL has been working closely with our industry partners in the MIC Coalition to ensure that the interests of our members are represented and have a voice during our ongoing discussions with the PRO’s, the DOJ, and members of Congress.

2016 Economic Impact Report: Also in August, ABL released its updated economic impact report 2016 Economic Impact Study of America’s Beer, Wine & Spirits Retailers, which provides an in-depth look at the role that beverage licensees play in the U.S. economy. The biennial study – which updates the 2014 version of the report – shows that since 2014 tax revenues contributed and jobs supported by beverage licensees have increased significantly. The results reflect a growing retail hospitality industry and beverage alcohol marketplace that continues to thrive, meeting consumer needs and showcasing an unprecedented variety of beer, wine and spirits products.

The report is available to all ABL members through an interactive portal on the ABL website, where you can access a variety of customizable reports broken out at the national, state, Congressional district and state legislative district levels. This provides ABL members with the ability to quantify the significant contributions they make to their communities when it comes to jobs, taxes and economic impact. To access the study, members can contact the ABL office.

Congressional Responsible Hospitality Caucus: The Congressional Responsible Hospitality Caucus (CRHC) is a bipartisan

Congressional member organization which seeks educate legislators and the public about the value and role of the American hospitality industry, and is cochaired by Representatives Sean Duffy (R-WI) and Derek Kilmer (D-WA).

The CRHC provides a forum in which members of Congress can explore issues facing beverage alcohol retailers, distributors and producers. It also draws attention to the hospitality industry’s commitment to social responsibility, the economic impact of the industry, and the federal policies and regulations that shape this significant sector of the American economy.

In November, ABL, the Presidents’ Forum and Wine & Spirits Wholesalers of America hosted a reception on behalf of the CRHC at the U.S. Capitol for members of Congress and their top legislative aides. The reception was attended by over 25 Members of Congress and staff, and provided ABL and industry partners with an excellent opportunity to discuss key issues facing the industry directly with several legislators on both sides of the aisle in the House of Representatives.

ABL Website: In November, ABL embarked on a comprehensive redesign and overhaul of its website – focusing on improving the user experience, functionality and overall resourcefulness of the site.

Relaunched to members and the public in December, the new site is now fully optimized for both desktop and mobile platforms. The new site will also include new member-only features, including access to the ABL Association Tip-ofthe-Month, a new State Alcohol Law Database.

ABL Weekly: ABL’s weekly e-newsletter continues to provide valuable information on the latest developments within the beverage alcohol industry – including policy, state-specific, industry-specific, and state affiliate updates. Between January – December 2016, the ABL Weekly has provided more than 1,500 of these updates (220 policy, 1,000 state-specific, 248 industry-specific, and 115 state affiliate). |

state & industry

STATE

Arizona: Out-of-State Wineries Can Apply to Ship Bottles to Arizona Liquor officials in Arizona recently began the process of licensing out-of-state wineries interested in shipping products directly to Arizona customers.

While a number of variables surrounding the required paperwork and other red-tape currently exist, officials expect the first set of licenses to be issued before the end of the calendar year. Those receiving licenses will be permitted to ship orders placed through wine clubs, in-person, over the phone, or online.

Indiana: Indiana High Court Takes Alcohol Wholesaler Case The Indiana Supreme Court recently agreed to hear a case that looks to determine whether wholesalers of beer and wine are legally allowed to also sell liquor across the state. The Court took the case after being petitioned by the state’s attorney general, Greg Zoller, to handle the case - Indiana Alcohol and Tobacco Commission v. Spirited Sales. Spirited Sales, an affiliate of Monarch Beverage Co. Inc., is the largest wholesaler of beer and wine in the state.

In an effort to protect against monopolies in the marketplace, current state law restricts beer and wine wholesalers from also wholesaling spirits.

Kentucky: Legislation Has Allowed State’s Craft Beer Industry to Thrive Recent efforts by the Kentucky state legislature has results in dramatic increases to the state’s craft beer industry. Senate Bill 11, for example, doubled microbrewery production caps – from 25,000 barrels/year to 50,000 barrels/year. In 2016 alone, 11 new breweries have been opened across the state.

Additionally, of the state’s existing 40 craft breweries, over 40% plan on increasing capacity and/or expanding their operations in the coming year.

The industry now supports over 570 jobs in the state – an increase of nearly 265% in a single year.

Texas: Debate Over Powdered Alcohol Resumes With 34 states having already banned powdered alcohol – also referred to as “Palcohol” – due to concerns around access for underage drinkers, as well fears that it could be added to others’ drinks. Lawmakers in

Texas are now poised to decide whether Texas should join this group of 34 states banning its sale. “Powdered alcohol WILL come to Texas, whether it’s legal or brought in illegally,” wrote Lynne Barbour, spokesman for Palcohol-producer Lipsmark LLC, in an email. “By legalizing it, Texas can control the distribution to keep it out of the hands of underage drinkers as well as receive significant tax revenue. Banning it will make it easier for kids to get it and will cost your state millions.”

Virginia: High Court Ruling Raises Stakes in DUI Blood Testing The Supreme Court recently ruled that the practice of drawing blood from DUI suspects is “invasive enough to a suspects body to require police to obtain a search warrant” – unlike the less intrusive and standard breathalyzer tests commonly used. As a result, DUI cases in Virginia are likely to increasingly rely on breathalyzer tests. In addition to limiting the tools available to law enforcement when it comes to drunk-driving cases, the Supreme Court’s ruling will also require lawmakers in the Commonwealth to revise the section of the state code criminalizing a repeat-offender’s refusal to take a blood test when suspected of driving under the influence.

Wisconsin: Green Bay Considers C-Store Liquor Ban Two proposals have been circulated among the Green Bay City Council which would prohibit convenience stores from selling spirits. Some of the council members have argued that the city currently has too many beverage alcohol retailers, which continue “dragging down city neighborhoods.” City Alderman Guy Zima’s proposals specifically target spirits sales by convenience stores, arguing that the sales are not their primary source of income – providing retailers with less incentive to combat underage sales.

Wyoming: Internet Sales Tax Bill Sent to Legislature The Wyoming legislature is looking to require large online retailers to collect sales tax from Wyoming customers who make purchases online – with the Joint Revenue Interim Committee sending a bill to the full legislature for a vote in January 2017. Proponents of the measure argue the bill would help

to level the playing field for small businesses across the state. For a business to be subject to the new tax, they would have to conduct 200 individual transactions and/ or have more than $100,000 in sales annually in the state. It should be noted, however, that similar laws passed in Alabama and South Dakota are currently being challenged in the courts, arguing they conflict with the 1992 U.S. Supreme Court ruling.

In that case – Quill Corp. v. North Dakota – the Supreme Court ruled that retailers that did not have a physical presence in a state could not be forced to collect sales tax.

INDUSTRY

Beverage Alcohol Industry & Consumers Celebrate Repeal Day On December 5, Americans from across the country raised a glass to celebrate the 83rd anniversary of the 21st Amendment, ending the 13-year period of Prohibition which was introduced with the passage of the 18th Amendment. In addition to ending Prohibition, the passage of the 21st Amendment also established the three-tiered framework which still guides the industry.

“The repeal of the failed, onesize-fits-all policy of national Prohibition was not the end of the story – it’s where the story of today’s successful system began,” noted Mike Lashbrook, Center for Alcohol Policy Executive Director. “The 21st Amendment recognized that alcohol is a unique product that is best controlled by individual states, and it provided a solution that continues to be effective today.”

Court Drops Smuggling Charges Against RNDC After being indicted by a federal grand jury in May 2016 on charges related to an alleged scheme to defraud the city and state of New York of alcohol excise taxes, charges against Republic National Distributing Company and three employees have now been formally dropped. The charges arose following allegations the company schemed to transfer alcohol from Maryland – which has an excise of tax of approximately $1.50/gallon – to New York, which has an excise tax of nearly $7.50/gallon.

“Republic employees

and should never have been charged,” said RNDC CEO Tom Cole. “We’re certainly happy that the US Attorney in Maryland realized that fact – before the needless expenditure of more time and resources – and decided to drop the case.”

Industry Groups Issue Joint Statement in Response to Surgeon General’s Report on Addiction Following the Surgeon General’s recent release of his Report on Alcohol, Drugs, and Health, ABL industry partners the Distilled Spirits Council, Beer Institute and Wine Institute issued a joint statement commenting on the report and reiterating their positions on the responsible consumption of beverage alcohol by adult consumers.

“The prevailing and widely accepted research shows that one-size-fits-all policies, including advertising bans and tax increases, fail to effectively address the problem of alcohol abuse, divert resources from more targeted approaches, and unfairly and negatively impact moderate and responsible consumers. Significant progress has been made in reducing alcohol abuse, including longterm declines in drunk driving and underage drinking. More remains to be done and we stand ready to support proven strategies to combat alcohol abuse.”

Retail Associations Demand That Visa Fix Flawed EMV Rollout A group of retailers has called on Visa to resolve several issues with its EMV rollout, following recent guidelines from the Federal Reserve suggesting that portions of Visa’s chip card implementation could be illegal – arguing the paymentcard networks have failed to comply with key portions of the Electronic Fund Transfer Act. The Retail Industry Leaders Association, the Food Marketing Institute, the National Retail Federation – along with other key industry stakeholders – responded to the Federal Reserve’s guidelines by sending a letter to Visa CEO Charles Scharf asking the company to delay the liability shift to retailers and to open up its EMV implementation, among other requests. |

and our three violated no law

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

facebook.com/ablusa

@ablusa

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

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

associate members

DIAMOND

Beer Institute Diageo National Beer Wholesalers Association Wine & Spirits Wholesalers of America

PLATINUM Bacardi USA

Beam Suntory, Inc.

GOLD

Distilled Spirits Council

Brown-Forman Castle Brands Charmer-Sunbelt Group Pernod Ricard USA Republic National Distributing Company Southern Glazer’s Wine and Spirits, LLC Wine Institute

SILVER

Constellation Brands Moët Hennessy USA

BRONZE

Monarch Beverage Company Patrón Spirits Company

Presidents’ Forum of the Distilled Spirits Industry

Sidney Frank Importing Co.

Remy Cointreau USA

R.J. Reynolds Tobacco Co.

affiliate members ALABAMA Alabama Beverage Licensees Association ALASKA Alaska CHARR

ARKANSAS Arkansas Beverage Retailers Association

COLORADO Colorado Licensed Beverage Association CONNECTICUT Connecticut Package Stores Association

DELAWARE Delaware Small Business Leadership Council FLORIDA Florida Independent Spirits Association

GEORGIA Georgia Alcohol Dealers Association

ILLINOIS Illinois Licensed Beverage Association

INDIANA Indiana Association of Beverage Retailers Indiana Licensed Beverage Association KANSAS Kansas Licensed Beverage Association KENTUCKY Kentucky Association of Beverage Retailers

MARYLAND Maryland State Licensed Beverage Association MASSACHUSETTS Massachusetts Package Stores Association

MISSISSIPPI Mississippi Hospitality Beverage Association

MONTANA Montana Tavern Association

NEW JERSEY New Jersey Liquor Stores Alliance NEW YORK Empire State Restaurant & Tavern Association New York State Liquor Stores Association

OKLAHOMA Retail Liquor Association of Oklahoma PENNSYLVANIA Malt Beverage Distributors Association of Pennsylvania

RHODE ISLAND Rhode Island Liquor Stores Association

SOUTH CAROLINA ABC Stores of South Carolina

SOUTH DAKOTA South Dakota Licensed Beverage Dealers & Gaming Association

TENNESSEE Tennessee Wine & Spirits Retailers Association TEXAS Texas Package Stores Association VIRGINIA Virginia Licensed Beverage Association

WISCONSIN Tavern League of Wisconsin

WYOMING Wyoming State Liquor Association WINE & SPIRITS GUILD OF AMERICA

If you would like to stop receiving physical copies of the quarterly ABL INSIDER, please contact ABL staff at info@ablusa.org and you will be removed from the INSIDER mailing list.

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