Montgomery County liquor control plans to fix itself ... by changing its name

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R Street has written before about Maryland's notorious Montgomery County and its liquor control department. Now, according to the Washington Post, the department is trying to change itself ... but mostly just by changing its name:

Montgomery County officials are hoping to change the name of the county’s Department of Liquor Control to something, well, a little less controlling.

The proposed name — Alcohol Beverage Services — reflects an effort to move the department’s image away from its regulatory focus and toward customer service, said director Robert Dorfman, a former Marriott executive appointed by County Executive Isiah Leggett (D) at the end of 2016.

“The old name does not have the right connotation,” Dorfman said. “We’re not about controlling how people do business. Our job is to make sure our customers are well taken care of.”

Montgomery County is the most populous jurisdiction in Maryland, and the only one that directly controls the wholesale distribution of all alcohol in its borders — a vestige dating to the end of Prohibition.

Businesses that purchase alcohol must buy it from the county, not private wholesalers. In addition, while beer and wine can be sold at retail establishments, consumers can buy liquor only from a county-owned retail store.

The system has long been criticized for, among other things, its past poor performance in deliveries, ordering and reliability...

Read the rest here.

 

 

Audit uncovers millions wasted by N.C. liquor regulators

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Government regulators are often notorious for mismanaging the public fisc, and a recent audit of North Carolina's Alcoholic Beverage Control Commission shows that N.C.'s liquor regulators wasted almost a million dollars a year over the past decade:

The office in charge of North Carolina’s state-run liquor stores has wasted millions of taxpayer dollars through years of mismanagement, according to an audit released Thursday morning.

The audit found that the Alcoholic Beverage Control Commission lost the state nearly a million dollars a year — specifically, $11.3 million over the course of 13 years — due to poor handling of contracts. ABC officials also wasted $2.1 million by renting warehouse space that they then kept empty for seven years, the audit found.

State Auditor Beth Wood said in an interview Thursday that the waste this audit uncovered was some of the most egregious she has seen in her nine years in office.

“There was just no overview, no oversight,” she said. “There was no monitoring of that contract. You just had a contractor come up and say ‘I want more money,’ ... and whatever the contractor asked for, it was what they got.”...

More here.

 

How Does Protectionism Hurt Our Drinks?

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Last weekend, R Street's Daniel DiLoreto discussed the alcohol industry's protectionist policies in the Washington Examiner. The Trump tariffs are detrimental, and many state policies have the same impact. They increase prices and stifle consumer choice:

President Trump’s tariffs are putting a dent in the good ole American six pack. This spring, craft breweries braced for impact, as additional charges on steel and aluminum are likely to make cans and bottle caps more costly to produce. “Any raise in the cost of cans will be immediately felt,” explains Justin Cox, founder of Washington, D.C.’s, Atlas Brew Works. Cox says he’ll be forced either to cut back on labor or charge consumers higher prices.

Nevertheless, while the tariffs have made national headlines for harming American industries, similarly costly state-level policies that affect alcohol have received less media attention. Like tariffs, however, state protectionism also hurts the booze industry by increasing production costs and raising prices for consumers. Consequently, while Trump’s tariffs deserve criticism, efforts to push back against protectionist policies should not be confined to the national level...

Read the whole article here.

Trump Administration Challenging Wine Tax Breaks

Trade has been a hot topic on R Street's drinks team lately. Now, the Trump Administration is furthering this discussion, as they are questioning a tax benefit that wine importers have. Richard Rubin and Jennifer Maloney explain in the Wall Street Journal:

The Trump administration is challenging a tax benefit that gives the wine industry more than $50 million annually and blocking beer and spirits makers from using the same break.

The government’s fight against the alcohol industry stems from what officials describe as an error by a Customs and Border Protection office in San Francisco in 2004. Since then, wine importers have been able to offset taxes owed on imports by getting credit for their exports—even when excise taxes on those exports were never paid.

The Treasury Department attempted to end the benefit for wine companies in late 2009 but senators from wine-producing states, including current Senate Minority Leader Chuck Schumer (D., N.Y.), objected and Treasury withdrew the proposal...

Read the entire article here.

Which States have the Most and Least Wineries?

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Last week, we discussed a map about wine taxes in each state. Now, similar info is available about which states have the most and least wineries. In the past, small drinks establishments have been linked to easier government regulations. Now, Vine Pair's Danielle Grinberg ranks which states have the most and least wineries:

The American wine industry has gone from erstwhile underdog to $20 billion international power player. The Judgement of Paris played a large part in our development, putting California on the global stage and providing bragging rights to generations of star-spangled wine lovers.

Today, California has the most wineries of any state in the U.S., clocking in at more than 4,800. West Coast wine hubs Washington and Oregon follow closely behind...

Check out the full map and key here.

UPS and FedEx: Breaking Bottles on Purpose

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New York's wine regulations have been a controversial topic covered on DrinksReform this year. The controversy continues, as UPS and FedEx are trashing wine shipments out of New York. This is completely both legal and intentional, Wine Searcher explains:

UPS and FedEx are confiscating and disposing of some wines shipped from New York retail stores to customers out of state.

It's totally legal for UPS and FedEx to do this, because wine shipping by retail stores to and from New York is not legal. The delivery company does not have to compensate anyone for the wine either.

Yet the idea that FedEx or UPS would let someone take a hammer and smash a bottle of Château Margaux that some anxious enophile in Indiana ordered from a Manhattan retailer: for a wine lover, even if it's not your bottle, it's painful.

Read the entire article here.

The Wine Industry, it is A-Changing

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On DrinksReform, we have talked about how companies are innovating to change the drinks industry. The wine industry is going to be a part of this change, Leslie Gevirts of Wine Mag explains:

“Changes in technology, business models and market structure are disrupting the global wine market and creating new sets of winners and losers among wholesalers, retailers and suppliers,” said Stephen Rannekleiv, global beverage strategist for the Netherlands bank.

Rabobank made note not just of direct-to consumer (DtC) wineries reaching out to customers, but also of Liberation Distribution or LibDib. The company is a three-tier online licensed distributor that connects wineries or importers with retailers and on-premise accounts. Right now, it’s only available in California and New York, but LibDib founder and CEO, Cheryl Durzy, said she has applications pending in several states in the West and the Midwest...

Read details about the changing industry here.

Wine Taxes by State

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The Tax Foundation recently released its annual report on wine taxes by state:

Today’s map shows wine excise tax rates across states, expressed in dollars per gallon.

Due to differences in alcohol content, states tend to tax wine at a higher rate than beer but at a lower rate than distilled spirts. Kentucky has the highest wine excise tax rate at $3.47 per gallon, followed by Alaska ($2.50), Florida ($2.25), Iowa ($1.75), and Alabama and New Mexico (tied at $1.70). The lowest rates are found in California and Texas ($0.20), Wisconsin ($0.25), and Kansas and New York ($0.30).

Read the whole article here.

Spiked Seltzer: How is it Regulated?

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There has been a lot of buzz around hard sparkling seltzer this year. This has left some people wondering if it is regulated any differently than other alcoholic beverages. Frank Knizer of Lehrman Beverage Law explains below:

The majority of hard seltzer is produced from either a brewed-malt (“clear malt”) or brewed-sugar (where 100% of the fermentables are derived from non-malt sugar) base, with carbonated water and added flavor. Under Alcohol and Tobacco Tax and Trade Bureau (TTB) regulations, both malt- and sugar-based hard seltzers are considered “beer,” but only malt-based hard seltzers are also considered “malt beverages.” This means that federal beer rules (27 CFR Part 25) apply to both malt- and sugar-based hard seltzers, but federal malt beverage labeling and advertising rules (27 CFR Part 7) apply only to malt-based hard seltzers.

The upshot of all this is that producing a hard seltzer with either type of base requires a Brewer’s Notice, and – if you’re adding flavor or color – TTB formula approval. Likewise, both malt- and sugar-based hard seltzers are taxed federally as “beer.” But, of these two types, only malt-based hard seltzers need to conform to federal malt beverage labeling rules (i.e., require a Certificate of Label Approval (COLA)). By contrast, sugar-based hard seltzers do not require a COLA, but do need to comply with FDA labeling rules (21 CFR Part 101)...

Read more details about its regulations here

Dunkin' Donuts to Offer Beer

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Boston Dunkin' Donuts are set to start selling beer in the fall, according to US Magazine. Some fast food restaurants, like Taco Bell, have tried to offer alcohol in the past. This will be an interesting development to follow:

Boston-based Dunkin’ Donuts is teaming up with another Beantown staple – Harpoon Brewery – to release a beer this fall, and it could be a total game-changer.

Boston.com reports speculation first arose that Dunkin’ might be dipping its toes into the beer business in early July when three labels for the upcoming beverage were filed with the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau. Per the labels, which have all been approved, the beer will be called Dunkin’ Coffee Porter and will be bottled and canned in the brand’s iconic pink and orange colors...

Read the entire article here.