TTB Signals Enhanced Enforcement Efforts

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The U.S. Tax and Trade Bureau is the primary agency at the federal level that regulates alcohol and enforces trade practice violations. According to Beer Business Daily, the TTB appears to be ramping up its enforcement efforts:

The U.S. Tax and Trade Bureau (TTB), which is the federal agency charged with regulating and taxing interstate bev-alc sales and distributors, issued an industry circular last week basically saying, in our words, "Hey guys, after 75 years, we woke up and are shocked, shocked to find that there are a lot of trade practice violations going on out there …”

The circular goes on to chronicle the most common offenses, mostly tied-house stuff regarding the prohibition of giving stuff of value to retailers, no consignment sales, no slotting fees, and the like…

We've seen a flurry of increased enforcement actions by the TTB in recent months, and this circular seems to point to more aggressive enforcement…

Read more here.

ADA Actions Being Brought Against Wineries

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Several lawsuits have been brought against New York wineries for failure to make their websites compliant with the American Disabilities Act. According to Thomas Pellechia at Forbes, however, there is little certainty about what businesses must have ADA-compliant websites and even how such businesses can ensure their websites conform with ADA standards:

In a recent blog post the Napa and Sonoma law firm of Dickenson Peatman & Fogerty (DPF) a firm that deals with many legal aspects of the beverage alcohol industry explained, “ There is considerable ambiguity in the law as to which companies are required to make their websites Americans with Disability Act (ADA) compliant and what actually constitutes ADA compliance…

Everyone knows many wineries operate an onsite (physical) tasting room. There, ADA certainly applies. But DPF says the courts have been less than helpful in determining which businesses must make websites ADA compatible. For instance, according to DPF, “The Ninth Circuit Court of Appeals has held that a website that is not tied to a place of public accommodation or that is attached to a place that does not qualify as a public accommodation is not subject to the ADA.”

Also according to DPF, however, “… there are cases in which courts have concluded that a stand-alone website service without a physical location can itself be considered a place of public accommodation, and subject to ADA requirements.” That means that wine producers who do not have a physical location but sell through a website may need to comply.

The truly crazy part of this story is that wineries seeking to bring their websites into ADA compliance will be unable to find U.S. Department of Justice (DOJ) guidelines on how to go about doing it. In an article on this subject, a DOJ spokesman told the Wine Spectator the department is “evaluating whether specific web-accessibility standards are necessary to ensure compliance with the ADA.” …

Read the whole article here.


Florida Wine Importer Sues California Over Wine Laws

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California requires all out-of-state wine importers/wholesalers to first sell their wine to an in-state importer/wholesaler before the wine can be sold to California retail outlets. According to Wine & Spirits Daily, a Florida importer is challenging the law in court on the grounds that it discriminates against out-of-state importers:

In California, importers and wholesalers based outside the state must first sell their products to an importer or wholesaler based in California, while in-state importers/wholesalers can sell directly to retailers.

Florida-based Orion Wine Imports argues that requirement adds distribution costs to out-of-state wholesalers that in-state ones don't face, which violates the Commerce Clause and the Privileges and Immunities Clause…

Read more here.

This case could be impacted by the current lawsuit in front of the Supreme Court, Tennessee Wine v. Byrd.

D.C. Implements New Set of Booze Reforms

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R Street has written before about D.C.’s relatively forward thinking alcohol laws, and now the District is set to usher in a series of more reforms. According to WTOP, D.C. alcohol producers will now be able to collaborate with one another and also sell their products online:

Craft brewers, distilleries and wineries in the District can have more parties, collaborate with other brewers and sell beers other than their own in their tasting rooms under a new District law that took effect Tuesday.

D.C. residents can now order craft beers from local brewers online.

The Omnibus Alcoholic Beverage Regulation Amendment Act of 2018 now allows manufacturers of beer, wine and spirits to create and sell collaboration products with other alcohol manufacturers, both in the District and outside of the District.

For example, breweries can now collaborate and manufacture beer with another brewery, regardless of location, and sell those collaboration beers for on-premise consumption that aren’t solely the brewer’s creation. They can also now sell collaboration beers in growlers for off-premise consumption.

Alcohol manufacturers can now also sell their products online and deliver directly to homes in the District between 7 a.m. and midnight, seven days a week…

Read the rest here.


New Jersey Legislator Introduces Brewery Event Bill

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After the recent dustup that occurred when New Jersey alcohol regulators tried to limit the number of annual events breweries in the Garden State could host, a bill has been introduced in the state legislature to give breweries more flexibility. NJBiz.com has the story:

Sen. Vin Gopal introduced a bill Tuesday that would allow microbreweries to hold special events both on- and off-site with prior notifications to the Alcoholic Beverage Control.

Senate Bill 3155 requires notification 10 days prior to on-site events and 21 days prior to off-site, and notification of the host municipality.

The bill also allows microbreweries to use virtual tours to fulfill tour requirements and clarifies they do not need to fulfill tour requirements when selling products intended for off-premises consumption…

Read the rest here.

The Neo-Prohibitionists Rise Again

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Even though it’s been over 80 years since Prohibition was officially repealed, the desire to ban alcohol consumption has not been totally eradicated. According to NewYorkUpstate.com, the New York Prohibition Party has been officially re-established with the goal of “abolish[ing] the alcohol industry” in New York state:

They believe all alcohol -- beer, wine and liquor -- should be banned. It's the major long-term objective for the people behind a newly reorganized political party in New York.

They belong to the appropriately named New York Prohibition Party. Founded in 1869, it went dormant in the 1940s, about a decade after the end of America's big experiment with national Prohibition.

In 2017, a small group of true believers set out to re-establish the state party. They followed in the footsteps of a re-emerging national Prohibition Party, the oldest continuously operating third party in the country.

The ultimate goal "is to establish a lasting prohibition of the manufacture and sale of alcohol, to abolish the alcohol industry, and to establish a teetotal culture," party officials said in a set of answers to emailed questions from NYup.com…

Read more here.


New Effort to Reform New Jersey Wine Shipping Laws

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Under New Jersey law, wineries that produce over 250,000 gallons a year are prohibited from selling directly to consumers in the Garden State. This law applies to both in-state and out-of-state wineries, and according to the Philadelphia Business Journal, New Jersey liquor store owners are the main opponents of reform:

A coalition calling itself Free the Grapes is pushing legislation that would allow major wine producers to ship bottles of their alcoholic libations directly to consumers in New Jersey.

Right now, the most prolific producers of wine are barred from shipping their products to individual buyers in the Garden State…

But the N.J. Liquor Store Alliance, which represents the retail side of the industry, is telling them to put a cork in it…

Read the whole article here.

New Jersey's Costly Liquor Licenses Continue to Hurt Restaurants

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New Jersey has long been known for its liquor license quota system, which as we’ve discussed in the past, artificially drives up the price of licenses in the state. Northjersey.com reports on how this is hurting the state’s dining scene and economy:

Peter Loria still recalls with disappointment the time he tried to open a restaurant in the Bergen County village of Ridgewood. He poured a chunk of his retirement savings into what he thought would become a destination for New Jersey food lovers, but he hit a common roadblock.

"I couldn’t get a liquor license," Loria, who owns Café Matisse in Rutherford, said of the 2007 project. "So it never opened. It was heartbreaking."

Loria is one of countless casualties of New Jersey’s notoriously restrictive laws governing who can sell alcohol. Those laws, which date back to the post-Prohibition era, limit municipalities to one liquor license per 3,000 residents. In places where demand is high, licenses can sell for $1 million or more — if they are available at all.

The result is a dining scene that, in the words of Morris Davis, a Rutgers professor who studies the economics of real estate and housing, is “diseased.” And more problematic still, the laws are seen by local officials as holding back efforts to revitalize downtownsand attract new, often younger residents.

New liquor license laws, experts say, could strengthen New Jersey’s economy…

Read more here.

How the Tennessee Wine v. Byrd SCOTUS Case Could Impact Wine Shipments

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As previously highlighted, the Supreme Court is considering a challenge to Tennessee’s residency requirement, which mandates that state liquor retailers must be residents of the state for 2-9 years before opening a store. As Liza Zimmerman recounts for Forbes, the case could have profound implications on interstate wine shipments:

For the first time in more than a decade, the U.S. government has shown a willingness to reevaluate how wine and spirits are sold, both within and between various states in the country.

In fact, the case of Tennessee Wine and Spirits Retailers Association v. Clayton Byrd (Tenn. v. Byrd) represents only the second such move by the high court since the repeal of Prohibition in 1933.

When Prohibition was repealed, the U.S. government decided that the safest way to regulate alcohol sales was by giving each state the right to decide how wine and spirits were sold within its borders. That resulted in a fractured legal arrangement in which almost every state handled the sale and shipment of drinks differently…

The biggest issue about the case is how the court may reevaluate the legal intricacies of interstate shipping. Retailers, with brick-and-mortar locations in distant states, had long been allowed to ship into other states. This was a right that most store owners thought had been set in stone by the 2005 Supreme Court case of Granholm v Heald.

However, as retailers in certain states and wholesalers began to worry losing a share of their revenue to out-of-state players, they put more pressure on shipping services such as UPS and FedEx to follow the letter of the law to the finest degree. As of a year ago, the bulk of major interstate shippers have been shipping into only 14 states and the District of Columbia….

Read the whole article here.

Wineries in California Can Finally Post Pictures of Events on Social Media

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Under California’s antiquated tied-house laws, it was illegal for wineries to post photos on social media to advertise events like tastings at bars or restaurants. According to Wine Business, that is finally about to change:

California wine producers who want to promote an upcoming tasting at a hotel, bar, restaurant, wine shop or other licensed retailer in the state may soon be able to post a photo on social media of that venue before the event on social media. 

Assembly Bill 2452 which Gov. Jerry Brown signed into law on Sept. 22, gives wineries and alcohol producers the opportunity to post the photos ahead of the special event. The new law takes effect Jan. 1.

The bill was introduced to update tied-house rules that prohibited alcohol producers from posting photos of a venue hosting a special wine tasting event. Posting a photo of such a venue was prohibited advertising – an illegal gift of “something of value” to the retailer under “tied-house” rules. 

Assemblywoman Cecilia Aguiar-Curry, D-Winters, sponsored the bill, saying the tied-house law is outdated.

"In today’s world of technology, social media, and fast-paced communication, prohibiting a winery or brewery from utilizing the full scope of social media is a competitive disadvantage. By allowing the limited use of photographs and sharing of website information, A.B. 2452 brings the law into the 21st century,” Aguiar-Curry said in an email…

Read more here.