#Actually, Beer Pitchers are Bad

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Last summer, R Street’s Cameron Smith caused a stir by calling out Alabama’s interpretation of a regulation that targeted margarita pitchers. The Alabama Alcoholic Beverage Control Board was forced to backtrack, conceding that it would leave the pitchers alone.

But don’t be fooled: Unruly drink pitchers are hardly confined to Alabama. In fact, our nation’s capital was recently forced to enact an even stricter rule to control its pitcher epidemic. Thanks to some quick-thinking government officials, D.C. law now officially prohibits customers from picking up pitchers and carrying them around a restaurant.

This regulation is a great example of local government attempting to respond to one of the paramount threats of our day. In fact, the only problem we can see with D.C.’s rule is that it fails to fully appreciate just how dangerous pitchers truly are.

It all started last year when D.C.’s Alcoholic Beverage Control Board implemented a new rule declaring that bars and restaurants were allowed to offer bottle service to their customers, so long as they did not “allow any patrons to remove the bottle or pitcher from the table.”

The regulation’s purpose is to “curb the practice of patrons wandering around the establishment with large containers containing multiple servings of alcoholic beverages.” Cracking down on wandering drink containers is important, of course, because “large containers may be used as weapons during altercations.” After all, who among us hasn’t visited a restaurant and ordered a pitcher of our favorite boozy beverage, only to drown its contents and use the empty container to smack a fellow patron upside the head?

For starters, pitchers have intricately designed handles that ergonomically mold to the human hand, allowing customers to arm themselves faster than you can say: “I’ll have a pitcher of Miller Lite.” But pitchers can be weaponized in less intuitive ways, too. In addition to being useful for whacking surly bartenders, shattering a glass pitcher can create dangerous shards handy for stabbing fellow bar patrons. Large containers of alcohol can also be a fire hazard (alcohol is flammable, after all).

And don’t even get us started on spills. Every week, dozens of clumsy D.C. bar-goers order pitchers of booze only to spill their contents on their nicest Sperry Top-Siders. Spilled beer not only ruins leather shoes, it also turns dance floors into slippery skating rinks primed to trigger costly slip-and-fall lawsuits. While spillage risk is also present with pint glasses, the potential harm caused by a dropped pitcher is much more significant (to paraphrase Biggie: Mo Liquid Mo Problems).

In the end, the flaw with the ABC’s new rule is obvious: It is not concerned enough with the victims of pitcher-crime.  Ideally, we would outlaw drinking establishments altogether, as they are a clear danger to the public. However, as pragmatic advocates, we recommend one of two policy solutions for D.C.’s deficient pitcher law: Either #BanThePitcher entirely, or arm every person in every bar in the District with their own pitcher for self-defense.

If we ban pitchers completely – coupled with felony convictions and jail time for anyone found still carrying one within District limits – then we can stop pitcher-fueled bar fights and catastrophic spills before they even happen. But if a complete ban is a step too far, let’s at least fight fire with fire. We should give every policy wonk and congressional staffer in every D.C. bar his or her own pitcher to wield in self-defense. That way, the next time someone pours beer on your new Tory Burch flats, you can respond in kind by dousing them with a jug full of PBR. Not only will this bring justice to such abhorrent crimes, it will likely deter them from happening in the first place.

It’s long past time for the D.C. government to show that it cares about its citizens by escalating the war on pitchers. Remember: People don’t kill people, pitchers kill people.

C. Jarrett Dieterle is the director of commercial freedom and a senior fellow at the R Street Institute, as well as the editor of DrinksReform.org. Daniel DiLoreto is a policy intern for commercial freedom at R Street.

Cannabis Beer Faces Stiff Barriers to Entry

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The American drinks industry has been expanding not only in size, but also in flavor and formula. Part of the innovation in the beer industry has been cannabis-infused beer. However, The Ringer explains that it is questionable whether this new beer will survive, due to a multitude of regulations:

Tom Hogue, the congressional liaison for the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB), tried to explain the labyrinth of regulations. “There are three layers — at least two, but potentially three,” he said. “Federal law, state law, and you may have local ordinances.”

Brewers are required to submit all beer formulas to the TTB for approval, and if there’s a question of safety, Hogue said, it has to be vetted by the Food and Drug Administration. From there, the path to commercial viability gets complicated further. “Let’s say I produce a beer here in Virginia. I brew it here, I sell it here, it does not leave the state,” he said. “I don’t have to have a label that’s approved federally to get it out in the market. If I’m selling it outside Virginia, I need federal approval.”

FDA approval of regular beer recipes has become standardized, but according to Hogue, hemp-derived beers are scrutinized much more closely. The TTB has to reconcile these formulas with not only the FDA, but the Drug Enforcement Administration as well because cannabis is a controlled substance. If the beer meets the standards of all three bodies, the drinks can be sold in the states where they’re made...

Read the whole article here

Olive Tariffs: Making Martinis Costlier

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As we have previously discussed on DrinksReform, tariffs are hurting American drinkers. This time, harm comes in the form of martinis. Per The Inquirer, The Trade Commission decided to put a tariff on Spanish olives after finding that they allegedly hurt American producers:

The U.S. International Trade Commission will impose antidumping duties of as much as 25.5 percent on Spanish olives after finding that the imports hurt American producers. Antisubsidy duties of 27.02 percent will also be levied.

The ruling may help American producers that asked for the duties to be imposed, including members of the trade group Coalition for Fair Trade in Ripe Olives, according to Bloomberg Law.

But the European Commission has said it will defend the interests of Spanish olive producers, who sent an estimated $67.6 million worth of their product to the U.S. in 2017, according to the Commerce Department.

See the whole article here.

Alabama Looking to Allow Curbside Service

R Street's Cameron Smith has been a strong advocate for improving Alabama's alcohol laws. The state's newest proposed rule change could do just that by allowing curbside delivery. Per Al.com, they even struck a requirement in the rule that mandates a minimum store size for this service:

Unless lawmakers intervene, Alabamians later this year could get their beer and wine without having to enter a store.

The Alabama Alcoholic Beverage Control Board this week approved a rule change allowing grocery stores that offer online ordering to let customers place an order for beer or wine and have it brought to and loaded into the customer's vehicle.

The board Wednesday made one change to the original proposal, striking a requirement that the grocery be at least 30,000 square feet or more. Now, the curbside pickup rule applies to any size store that offers online ordering and meets other requirements, ABC spokesman Dean Argo said Thursday.

Read more about Alabama's booze delivery here.

Missouri Retailers Can Now Honestly Advertise

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In the past, we have covered Missouri's tight commercial speech laws. Until last week, an arcane  law had banned alcohol retailers from mentioning specific alcohol prices, even if it was truthful. This not only resulted in vague restrictions on mentioning discounts, but also made it difficult for businesses to compete with others across state boundaries:

"I get calls all the time from stations on the borders of the state," says Mark Gordon, president and CEO of the Missouri Broadcasters Association. "'Can I mention this discount price, or say that?' And they can't. They're competing with stations across state lines, and they don't get a level playing field."...

In legal filings, lawyers for Missouri argued they had a compelling interest in discouraging overconsumption. But the state's laws didn't bar stores from selling alcohol below cost — or even advertising those prices inside the store. It simply banned them from being advertised outside the store...

Read more about Missouri's law here.

Minnesota Benefitting from Sunday Sales

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Last year, Minnesota allowed Sunday alcohol sales. After a year, evidence suggests that this has been a beneficial move. While some businesses have seen this impact more than others, this is a sign of consumers choosing their product as opposed to harming the economy. Some people that were formerly opposed to allowing Sunday sales are now eating their words:

One year ago, on July 1, Sunday liquor store sales became legal in Minnesota for the first time. Although there are no definitive figures available to determine the economic impact on state liquor tax revenue and liquor store operations, there is some evidence it's been a positive move.

"It's not too soon to eat my words from last year," said Edina City Manager Scott Neal, who oversees operations at the city's three municipal liquor stores.

Last year he was among the majority of liquor store operators who thought Sunday liquor sales would be a money-losing proposition. Instead, he estimates gross sales are up about $240,000, with about $50,000 of that being profit.

Read the whole article here.

Online Delivery Gives Consumers Independence Day Drinks

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As previously mentioned on DrinksReform, Texas allowed Amazon to expand its services to deliver booze. Now, a Texas grocer is using an online platform to offer same day booze services. Thankfully, this came just in time for Independence Day:

Heading into the Fourth of July holiday, H-E-B has launched same-day delivery for beer and wine order via its Favor e-commerce subsidiary.

The service kicked off just before the weekend in the greater San Antonio, Austin, Corpus Christi and Houston markets, the Texas supermarket chain said. Plans call for Favor to make the service available in more than 30 cities, with free one-hour delivery for beer and wine orders through Labor Day.

To order beer and wine for delivery, customers download the Favor app and tap on the H-E-B Beer & Wine banner or go online to FavorDelivery.com. Orders require a Runner tip, set at a minimum of $2, and the delivery charge for beer and wine is automatically waived.

Read more here

Wine Wins in New York

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We recently discussed two bills in New York that had the power to grant wholesalers more monopoly power over New York wine. Both remained in committee, which is seen as a tacital victory for wine retailers. Wine Searcher describes it here:  

The bills, NY Senate Bill S05437, introduced by State Senator Terrence Murphy; and Assembly Bill A10737 remained "in committee" when both houses went into recession on June 20th. They were among the many issues left unaddressed by a very unproductive New York legislature this year that left other issues – such as tightening gun regulations, according to the New York Times – unresolved.

"There is a tacit agreement if it doesn't get voted out of committee it dies," says John Hinman, a partner in the San Francisco-based, drinks-specialized law firm of Hinman & Carmichael. "Most of the alcoholic beverage bills don't pass," adds attorney Elke A. Hofmann, the owner of the New York City-based Elke A. Hofmann Law, PLLC. However, she notes the New York State's individual process of committees and readings process is baffling.

If these bills had passed retailers would have been prohibited from buying from private collectors and at auction. This would have made older vintages and sought-after bottles very hard to find for high-end restaurants and big-ticket buyers. This would be a challenge for the wine market anywhere, but New York is also home to all the major international auction houses. These bills are also reminiscent of when the New Hampshire State Liquor Board tried to block out-of-state retailers from shipping to residents from out-of-state stores last month.

Read more about wine's victory here.

Sales Tax Ruling May Not Affect Direct-To-Consumer Shipping

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The Supreme Court recently ruled that states have the authority to require online vendors to collect state sales tax--even if those online retailers are not physically present in a given state. This overturns the previous law, where online vendors did not need to charge sales tax if they were not brick-and-mortar retailers. Bev News Online, however, explains why this may not harm direct-to-consumer shippers as much as we think:

...we don’t think the decision will have any meaningful impact on DtC shipments.

Neither does Steve Gross, vp-state government relations at the Wine Institute.  “For the most part this will have only a limited impact on wineries making Direct-to-Consumer (DTC) shipments, as most states already are collecting sales taxes on wine DTC since those provisions were included in the DTC statutes when they were passed,” he told us.

The decision overturned two earlier decisions – the most recent being 25 years old – involving catalog sales.  Those cases held out-of-state retailers cannot be required to collect and remit sales taxes to any state in which it didn’t have a physical presence...

Read the entire article here. Chain Storage offers a similar perspective here, with some elaboration on the law's protectionist nature.

According to Wine Searcher, the Supreme Court officially confirmed that this tax will apply specifically to wine:

Wine sales have been somewhat of a laissez-faire business in the US for some decades – some retailers charged taxes on out-of-state purchases while others elected not to do so. As a result, the same bottle of wine might cost a New York consumer less online in New Jersey than at the shop down the street.

However all of that has changed as last week with the Supreme Court case of South Dakota v Wayfair Inc. In keeping with the justices' ruling, the wine retail market is going to be revamped and standardized in terms of taxes across the country. This telling case – which comes just nine months on the heels of wholesaler pressure pushing UPS and FedEx wine deliveries out of 36 states – will mandate a retail market in which taxes will be paid by retailers large and small.

Most major internet wine sales entities, such as Amazon and Wine.com, have been charging their out-of-state customers taxes all along. Until six months ago, Amazon didn't charge sales tax on sales in areas where it didn't have a brick-and-mortar presence, says Eric F. Citron, counsel of record for South Dakota in the recent Supreme Court case and a partner in the Maryland law firm Goldstein & Russell, P.C. They changed that policy six months ago, he notes. Amazon did not respond in time to comment for this story...

Read more about the taxes here.

The Trade War Continues Hitting American Drinks

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The trade war continues to threaten American drinks. In response to the Trump Administration's decision to place tariffs on European goods, the European Union placed tariffs on American goods--including whiskey. CBS News explains below:

What American whiskey makers have dreaded is becoming reality. The European Union will start taxing a range of U.S. imports on Friday, including Harley-Davidson (HOG) bikes, cranberries, peanut butter, playing cards and whiskey. The union is responding to President Donald Trump's decision to slap tariffs on European steel and aluminum.

American distilleries large and small have watched warily as the threat of tariffs from Europe ratcheted up in recent weeks. And while larger, corporate-owned facilities tend to do the most business overseas, small and midsize companies could be especially vulnerable because they lack the ability to stockpile reserves and take other protective steps.

The whole article is available here.