Court Rebuffs Challenge to New Arkansas Wine Reform

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Arkansas recently enacted reforms that would allow grocery stores in the state to sell wine (they can already sell beer), but some incumbent liquor store owners sought to challenge the new law via litigation. According to The Arkansas Times, however, a federal judge has rejected a preliminary injunction in the case:

"Federal Judge Brian Miller has denied a request for a preliminary injunction in a lawsuit by retail liquor stores attempting to block a state law taking effect Thursday that allows permitted grocery stores to sell all types of wine, not just Arkansas and so-called small batch wines. 

The judge also dismissed the liquor store claims of a U.S. constitutional equal protection violation — that is, that differences in regulation for liquor stores and grocery stores were unfair.

The state Alcoholic Beverage Control Board has more than 200 applications for grocery store wine sales under the 2017 law. It was a product of some dickering between grocery stores and so-called county line liquor stores. Those liquor stores went along with the new law in return for a promise that retail grocers wouldn't continue a county-by-county effort to vote "dry" counties wet and thus open them to competition to liquor stores perched at their borders — such as the Conway County liquor stores that do huge business with people from "dry" Faulkner County..."

Read the rest here.

A previous white paper by R Street's Jarrett Dieterle was cited in another article about the Arkansas grocery store battles.

 

Michigan Repeals Its Beer Keg Tag Law

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In an attempt to clamp down on underage drinking, Michigan lawmakers passed a keg tagging law in 2010, which required all kegs purchased in the state to be tagged (removal of the tag could lead to a hefty fine). According to MLive.com, Michigan has now repealed the law since it mostly just resulted in consumers substituting other forms of alcohol containers--cans, bottles, etc.--for kegs:

"The keg tagging policy one lawmaker calls 'a failed experiment' will be no more in Michigan. On Tuesday, Gov. Rick Snyder signed legislation to repeal a law passed in 2010 to put additional restrictions on keg sales in an attempt to curb excessive and underage drinking, particularly among college students.

Under that law, which took effect in 2011, any keg buyer had to sign a receipt that listed their name, address and phone number and show identification upon purchase. The law also imposed a $30 keg deposit -- which couldn't be claimed upon return unless the keg tag remained intact -- and made removing a keg tag a misdemeanor punishable by up to 93 days in jail and up to a $500 fine...

Many retailers noticed a quick drop in keg sales once the law took effect, but also noticed an uptick in sales of liquor, cases of beer and other alcohol that did not require registration or deposit. 

Other issues, including the high price tag, difficulties keeping the tag on, monetary loss for unreturned kegs and little to show in terms of preventing underage drinking quickly drew critics from various industries..."

Read more here.

 

The Rise Of The Online Liquor Store

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Online alcohol sales are still a relatively nascent phenomenon, but there continues to be evidence that boozy e-commerce could shake up the drinks industry. E.J. Schultz discusses the latest news on the topic for Ad Age:

"Moët Hennessy doesn't want to use the web to merely offer its luxury champagne, wine and liquor online. It wants to provide the mixologist, bar and glassware—and maybe a trip to Scotland to boot.

The marketer of Dom Pérignon, Veuve Clicquot and Belvedere vodka is trying to infuse its online sales with luxury experiences via a new site called Clos19, part of a broader effort among alcohol marketers to get more aggressive about e-commerce after years of trailing other categories. While 20 percent of U.S. shoppers bought groceries online last year, just 8 percent of buyers bought alcohol online, according to Nielsen data cited by e-commerce analytics firm Profitero.

Alcohol has lagged because of a complicated patchwork of post-Prohibition state laws that govern its sale and distribution. Generally, a so-called three-tier system requires most sales to flow from supplier to wholesaler to retailer. That means a beer brand, for instance, can't take an online order and ship it directly from its warehouse to the consumer.

But alcohol's online potential is now growing thanks to the rise of third-party sites that allow drinkers to order beer, wine or booze online and have it delivered from retailers like the corner liquor store. Among the most successful is Drizly, which began in 2012 and now serves 70 cities across 30 states. And of course, everyone is watching Amazon. While the e-commerce giant recently said it was closing its Amazon Wine program, it continues to expand alcohol delivery through its Prime Now service..."

Read the rest here.

Tax Cuts For Booze Are Part of Senate Tax Plan ... For Now

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For several years now, alcohol producers around the country have been urging Congress to pass the Craft Beverage Modernization and Tax Reform Act, which would lower federal excise taxes on booze. Despite bipartisan support, the bill has never advanced. It appears that at least a temporary breakthrough could be on the horizon, however, as the Senate has included the booze tax reform as part of its larger tax plan. CNN reports:

"Senate Republicans are proposing significant excise tax reductions for wine, liquor and beer -- including one that slashes in half the rate for craft brewers.

But the party could be short lived. Even if it passes, the proposed tax reductions are set to expire after two years.

'We're gratified to have achieved this and we're hoping to build on it in the future,' said Mark Gorman, senior vice president for the Distilled Spirits Council, the industry group for the $65 billion liquor industry.

He said that he hopes to extend the reductions beyond two years. 'It's terrific recognition that distilled spirits have been overtaxed for a long time and this would the first distilled spirits tax reduction since the Civil War,' he said. 

For beer, which is currently taxed at $18 per barrel, the proposal would lower the tax rate to $16 per barrel for the first two million barrels produced or imported, and after that it would go back up to $18..."

Read the rest here.

The Military and Whiskey's 250-Year Relationship

R Street's Kevin Kosar has written a history of whiskey in the military for KCET. He traces the intertwined relationship of booze and troops from early America to the present: 

"Whiskey, as any enlistee will tell you, is popular among America’s fighting forces. Military installations’ drinks shops (“Class 6” stores) are stocked with a galaxy of intoxicating drinks — beer, spirits, wines — but whiskey is especially popular. And it isn’t just any whiskey — it’s the American-made bourbons, ryes and Tennessee whiskeys that really move off the shelves.

Certainly, the popularity of whiskey among soldiers, sailors, airmen and marines can be explained partly as a reflection of American taste in general. Americans purchased more than 30 million cases of American whiskeylast year, according to the Distilled Spirits Council of the United States.

But for military men and women, whiskey holds an additional appeal beyond its glorious amber color, robust flavor and mood-alleviating powers — it may even be more American than apple pie (which seems to have been invented in England). Whiskey has been with the America’s armed forces since the earliest days of the republic..."

Read the whole piece here.

Pennsylvania Legislative Committee Considers Modest Liquor Licensing Reform

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Like many states, Pennsylvania has strict tied-house laws stemming from the post-Prohibition era. As a result, some Keystone State breweries have had trouble with things like leasing space or property from an entity that possesses a restaurant or retailing license. According to The Legal Intelligencer, a key legislative committee may advance reforms to this law:

"The Pennsylvania House of Representatives’ Liquor Control Committee is set to vote on a measure to lift liquor licensing restrictions that have been in place since the repeal of Prohibition.

On Tuesday, the committee is expected to pass amendments to the Liquor Code in HB 1902, a measure introduced by the committee chairman, Rep. Adam Harris, R-Juniata. If passed by the General Assembly, the bill would end the state’s practice of “interlocking prohibition,” a form of tied-house law that disallows holders of liquor manufacturing licenses from also holding retail bar and restaurant licenses.

Tied-house laws make it illegal for a manufacturer to induce a retailer to sell only one brand of liquor. Lawmakers said the current letter of Pennsylvania law presents modern-day problems. For example, under the law, a landlord with a license to serve alcohol couldn’t lease space to a manufacturer of alcohol..."

Read more here.

In Indiana, Sunday Sales Gain Traction but the Beer Stays Warm

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Indiana has two of the most notorious alcohol laws on the books: a broad prohibition against Sunday carryout sales and a rule preventing convenience stores and gas stations from selling chilled beer. Despite polls indicating that Indiana residents are strongly in favor of Sunday sales and cold beer, reform efforts to change these laws have thus far failed. According to the IndyStar, a new alliance may open up Sunday sales but still leave Hoosier State residents stuck with warm brews:

"Liquor stores and the trade group representing big-box grocers say they have forged an alliance that could lead to them selling alcohol in Indiana on Sundays for the first time since Prohibition.

But the unlikely accord between the Indiana Association of Beverage Retailers and the Indiana Retail Council opposes the expansion of cold beer sales and has drawn the ire of another key interest group: convenience stores, which have been fighting for years to win state approval to sell cold beer.

While the once-warring parties to the agreement hailed it as a landmark alliance to forcefully push for Sunday sales, convenience store owners blasted it as a back-room deal too narrow to merit consideration by the state legislature.

“They are cutting a deal which greatly benefits themselves, at the expense of Hoosiers who have identified the cold beer prohibition as the No. 1 alcohol reform needed in the state,” said Scot Imus, executive director of the Indiana Petroleum Marketers & Convenience Store Association..."

Read the rest here.

Wisconsin Legislature Considers Lowering the Drinking Age

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A group of state legislators in Wisconsin are urging their colleagues to consider lowering the state's legal drinking age from 21 to 19. According to The Daily Cardinal, Wisconsin already has some of the more flexible drinking laws in the county, as minors in the state are permitted to drink booze if accompanied by a legal guardian:

"Already one of the booziest states in the union, Wisconsin could allow residents as young as 19 to belly up to the bar and walk through liquor stores under proposed legislation.

The bill, introduced by three Republican state legislators, would set Wisconsin apart from the rest of the country by lowering the drinking age from the federally-mandated 21 to 19.

Wisconsin’s alcohol regulation policies already stand out nationally, as minors are allowed to consume alcohol with a guardian of legal age.

Departing from federal standards, however, does not come free: States that do so lose crucial federal money. In Wisconsin, that loss could amount to over $50 million per year..."

Read the whole story here.

Indiana Residents Support Cold Beer and Sunday Sales

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In addition to basketball, Indiana is famous for its, er, unique alcohol laws. Not only does Indiana's "warm beer law" forbid convenience stores and gas stations from selling chilled beer, but the Hoosier State also has one of the most stringent blue laws in the country (forbidding all sales of carryout alcohol on Sundays). Unsurprisingly, these laws hurt consumers in the state and remain deeply unpopular, according to the Indy Star:

"Solid majorities of Hoosiers support expanding both cold beer and Sunday alcohol sales, according to a new poll.

Some 61 percent of Hoosiers favor expanding cold beer sales and 58 percent favor Sunday carryout sales, according to the Old National Bank/Ball State University 2017 Hoosier Survey. 

The poll of 600 Hoosiers, conducted in early October, found the margin of support for expanding alcohol sales widened from 2014, when similar questions were asked. For cold beer, support was 30 percentage points greater than opposition; for Sunday sales, it was 28 points higher...

The results, provided to IndyStar, come as a legislative commission is considering whether to recommend changes to Indiana’s alcohol laws. Currently, the sale of cold beer for carryout is limited mostly to package liquor stores. Sunday alcohol sales for carryout are prohibited outside breweries, wineries and distilleries.

The question is whether public opinion carries more weight than powerful interests, led by the state’s liquor store industry, which has successfully lobbied the Indiana General Assembly to block cold beer expansion and thwart wider Sunday alcohol sales..."

Read more here.

 

 

 

 

Recapping Maryland's "Reform on Tap" Task Force

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This past Spring, DrinksReform.org covered the debate around Maryland's controversial beer legislation, H.B. 1283. While the bill were moderated before passage, the law has remained unpopular among brewers in the Old Line State. In the aftermath of its enactment, Maryland formed a task force to meet with various stakeholders--brewers, retailers, distributors--to review and address Maryland's outdated beer laws. After a series of townhall-style meetings, the task force has concluded its efforts, and DCBeer.com's Greg Parnas has compiled a comprehensive update on the situation and what might be next:

"This past spring saw the emergence of a contentious legislative fight in Maryland over HB 1283 between brewers on one side and their counterparts in the three tier system, wholesalers and retailers, on the other. In its original form, HB 1283 would have brought new restrictions on craft breweries in Maryland that could have severely harmed the craft beer industry in the state. Thankfully, due to public outcry, the worst aspects of the bill were able to be modified in the Senate before final passage (via a backroom negotiation between the Brewers Association of Maryland (BAM) and the Maryland State Licensed Beverage Association (MSLBA)).

In the aftermath of these events, including some odd side-lining of the Committee Chairmen who oversee alcohol regulation, Comptroller Franchot announced the formation of the Reform on Tap Task Force, whose goal would be to push for reform of Maryland’s beer laws. The Comptroller announced his findings at the final Task Force meeting today in Annapolis. In lieu of its conclusion, DCBeer decided to interview the various participants and stakeholders of the Task Force and get their perspective on its work and what comes next..."

The entire piece is well worth reading (available here).