How wine sales in Tennessee grocery stores have changed the landscape

A year ago Tennessee changed its law to allow grocery stores in the state to sell wine. Madisen Keavy at WATE.com checks in on the results:

"Nearly one year after the state of Tennessee began allowing grocery stores to sell wine, liquor stores say they’ve seen a drop in wine sales while grocery chains say it’s helped customers. Meanwhile, a major convenience store chain has decided not to sell wine at all.

Stores applied to sell wine through the Tennessee Alcoholic Beverage Commission before sales began on July 1, 2016. Sales at stores like Kroger have gone up thanks to the addition of wine.

'The convenience factor of just being able to stop in and just pick up a bottle of wine with dinner was just a fantastic win for our customers,' said Farragut Kroger manager Lyn Cox..."

Read more here: http://wate.com/2017/06/27/1-year-later-how-wine-sales-in-tennessee-grocery-stores-have-changed-landscape/

Could Illinois Start Losing Booze Sales to Indiana?

After years of stagnation, Indiana lawmakers are making noise about reforming the Hoosier State's onerous alcohol regulations (in case you haven't heard, they don't allow gas stations to sell cold beer, as R Street's Jarrett Dieterle has written about). If Indiana follows-through, Illinois fears it could lose annual alcohol sales to its neighbor since many Illinois residents will likely hop over the border to avoid Illinois' much higher booze taxes. The Illinois News Network reports:

"With high alcohol taxes in Illinois and neighboring Indiana showing an interest in relaxing strict alcohol regulations, Illinois distributors fear alcohol sales could move out of state.  

In Indiana, cold beer can be sold only in liquor stores and no alcohol sales are allowed on Sundays except at restaurants. In a recent poll, though, 71 percent of Indiana supported allowing more cold beer sales and 65 percent approved of Sunday alcohol sales.

Bob Myers, president of the Associated Beer Distributors of Illinois, emphasized that changes to Indiana’s alcohol sales laws could bring tougher times to retailers in Illinois benefiting from patrons crossing the border.  

'When Indiana changes those laws, it's going to end, causing more competition for our Illinois retailers, and it could end up having a very adverse effect on sales,' Myers said..."

Read more: https://www.ilnews.org/news/economy/alcohol-border-sales-trouble-brewing-between-illinois-and-indiana/article_393f9160-5859-11e7-962b-d31f2acef0a4.html  

Proposed Delaware alcohol tax increases draw criticism

The Delaware legislature is considering raising alcohol taxes to help plug a hole in the state budget, but the alcohol industry is fighting back. Matthew Albright has the story for The News Journal:

Critics of proposed increases to taxes on income, alcohol and cigarettes packed Legislative Hall on Wednesday to argue the hikes could hurt the state's small businesses and economy.

Legislative leaders said they didn't like asking for tax hikes, but said they were a necessary evil given that state government is still in a budget hole of hundreds of millions of dollars...

The tax that drew the most criticism Wednesday was a plan to raise taxes on beer, wine and spirits. So many distributors, brewery owners and liquor store owners flooded the basement hearing room that legislative staffers had to herd them into the cafeteria, where the meeting was shown on a television screen.

'Prices will go up. Of this, there is no doubt,' said Jay Hibbard, vice president of the Distilled Spirits Council. 'When prices go up, sales go down.'

Schwartzkopf said he intends to file an amendment to lower the amount of the proposed increase from what was originally proposed.

Here are the new rates: on a six-pack of beer, from 9 cents to 15 cents; on 750 milliliters of wine, from 19 cents to 32 cents; on 750 milliliters of spirits, from 74 cents to 89 cents. 

Representatives of several Delaware breweries, including Iron Hill and Dogfish Head, said the tax increase would harm a budding industry...."

Read more here: http://www.delawareonline.com/story/news/politics/2017/06/21/tax-increases-opposition/417792001/

N.C. Brunch Bill Heads to the Governor's Desk

The alcohol reform movement appears poised to score a big victory in North Carolina. Last night, the state legislature passed omnibus legislation that includes the aptly named "brunch bill." The brunch bill would increase the number of bottles N.C. distillers can sell straight to customers (up to 5 per year from the current 1) and clear the way for restaurants to be able to start selling alcohol at 10am on Sundays rather than noon (making boozy brunches in the Tar Heel State a reality). The legislation now heads to the governor's desk.

John Trump has the full story for Carolina Journal:

"Should Gov. Roy Cooper agree with the legislature and quickly sign Senate Bill 155, North Carolina distillers — and possibly restaurateurs — will see a significant boost in sales as visitors as early as this coming weekend.

The N.C. Senate, in a marathon session Wednesday night that included some 80 bills, approved the so-called “brunch bill,” 37-9, without debate.

Distillers hope the governor signs the omnibus bill quickly, in time for the long holiday weekend.

'Senate Bill 155 offers substantial opportunity for our family owned distillery and drivers of tourism throughout our state,' said Gentry Lassiter of Lassiter Distilling Co. in Knightdale. 'We are thrilled at how our legislators worked together to pass this important bill, and we’re very hopeful Governor Cooper will sign it before the holiday weekend.'

The House on Tuesday approved the bill, clearing the way for N.C. craft distillers to sell five bottles to customers each year, instead of the current one, and — with local approval — allows restaurants and retail outlets to begin selling alcohol Sunday at 10 a.m., as opposed to noon..."

Read more about the bill here: https://www.carolinajournal.com/news-article/lawmakers-serve-cooper-bill-loosening-rules-on-distilleries-restaurants/

(H/T to our friends at Free to Brew for alerting us to this development).

A Federal Court Just Sided With a Brewery in Its Dispute With a Distributor

Many states have strict laws regulating the relationship between alcohol producers and distributors within the three-tiered system of alcohol distribution. These so-called "Franchise Laws" make it very difficult for breweries to terminate their contracts with distributors, even when its clear that the brewery would be better served by a different distributor.

But a federal court just sided with The Great Lakes Brewing Co. after it tried to end its relationship with its distributor after the distributor changed ownership.

The court held that while contracts between brewers and distributors could not contravene Ohio's state franchise laws, it was still perfectly acceptable for the parties to bargain for certain rights and obligations in addition to those laid out in the Franchise Laws (again, so long as the bargained-for rights did not conflict with those Franchise Laws).

As R Street's Jarrett Dieterle has previously noted, research suggests that state's without restrictive franchise laws generally have more breweries.

Beer industry's bill on hold until bigger pieces are moved

While much of the action in the booze policy world takes place at the state and local level, alcohol producers have been actively pushing the Craft Beverage Modernization and Tax Reform Act in Congress. The bill would lower federal excise taxes for alcohol and loosen up other regulatory strictures imposed on breweries. Despite its broad support among both large-scale and craft producers, it hasn't passed either house of Congress yet this session. Chuck Raasch discusses the reasons why in the Atlanta Journal-Constitution

"The beer industry, from the smallest craft brewers to the giant Anheuser-Bush InBev, is behind a long-awaited rewrite of the federal tax code on beer. More than half the members of the U.S. House have signed on as co-sponsors of a bipartisan bill to do that, and nearly half the U.S. Senate has put its name on that body's version.

So why hasn't it happened?

Like many other pieces of legislation in Washington during the first five months of Donald Trump's presidency, a few big pieces have to move first before anything like the beer bill can follow...

[The legislation] is supported by both the Beer Institute, which represents the big brewers, and the Brewers Association, which represents the craft-brew industry that has exploded over the last two decades.

The measure would maintain the federal excise tax of $18 per barrel on every barrel of beer over 6 million produced by a single brewer. It would reduce that tax to $16 a barrel for the first 6 million barrels while reducing the tax to $3.50 per barrel on the first 60,000 barrels produced by any brewer that makes under 2 million barrels of beer a year.

The intent is to stimulate the small-producer sector and beer production in the U.S., while still maintaining revenue to the U.S. Treasury. The bill would also ease federal restrictions on ingredients that can be added to beer, and allow small, independent brewers to collaborate on new beers by giving them the flexibility to transfer beer between breweries without federal tax consequences..."

Read the rest here: http://www.myajc.com/news/beer-industry-bill-hold-until-bigger-pieces-are-moved/9liF1U4f85j4UWoEfqMckK/

 

 

Wisconsin legislators mulling proposal to curb craft brewery on-premise sales

Are Wisconsin lawmakers thinking about clamping down on on-site brewery taproom sales? Chris Crowell summarizes recent happenings in the Badger State for Craft Brewing Business:

"This is apparently the hot new thing for wholesaler lobbying groups to pitch to their state governments: Cutting back on taproom and to-go beer, on-premise sales, in order to reroute more of that business through distributors. To Southern states, this is old news, but Nebraska and Texas have dealt with this to some degree recently, and now legislators in Wisconsin had their monocles fixated on one such proposal earlier this month, according to the Green Bay Gazette..."

Read the rest here: https://www.craftbrewingbusiness.com/news/wisconsin-legislators-mulling-proposal-to-curb-craft-brewery-on-premise-sales/

UPDATE: The AP reports that Wisconsin brewers are worried that last-minute regulations targeting their ability to sell directly to consumers could be snuck into the state's budget legislation. DrinksReform.org will continue to monitor developments in Wisconsin as we learn more.

Founder of MADD says Utah’s new drunk driving law is an unhelpful distraction

Utah recently lowered the blood-alcohol limit for what constitutes drunk driving (covered previously on DrinksReform.org). In response, the founder of Mothers Against Drunk Driving has written an op-ed opposing the change and claiming it distracts from other serious driver safety concerns:

"Back in the early years at MADD we focused on getting serious drunk drivers off the road. Believe it or not, back then someone who was pulled over for drunk driving might be sent on their way by an officer with little more than a casual "get home safe." As a result many lives were unnecessarily lost, including my daughter's. In the more than 35 years since MADD's founding, we have fought drunk driving ferociously and saved countless lives in the process.

But today, the pendulum has swung too far in the other direction — with government agencies pushing states to arrest people for having little to drink before driving instead of pursuing strategies to tackle serious distraction and impairment. Anyone who works in traffic safety knows that most highway deaths are not caused by drivers with low blood alcohol content levels, but are the result of drivers with substance abuse disorders. Focusing finite resources on casual drinkers instead of drug and alcohol abusers is a miscalculation with deadly consequences..."

Read the whole op-ed here: http://www.sltrib.com/opinion/5399043-155/op-ed-founder-of-madd-says-utahs

How High Are Wine Taxes In Your State?

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The Tax Foundation released its annual survey of state wine taxes from across the country. Find out how your state ranks:

"The treatment of wine differs extensively across the states, and at higher rates than beer because of greater alcohol content.

Kentucky has the highest wine excise tax rate at $3.17 per gallon, followed by Alaska ($2.50), Florida ($2.25), Iowa ($1.75), and New Mexico and Alabama (tied at $1.70). The five states with the lowest wine excise rates are California ($0.20), Texas ($0.20), Wisconsin ($0.25), Kansas ($0.30), and New York ($0.30). Notably, these rankings do not include states that control all sales (New Hampshire, Mississippi, Pennsylvania, Utah, Wyoming)..."

Check out the full map: https://taxfoundation.org/high-wine-taxes-state/

The Tax Foundation also recently released its annual beer tax survey, as covered by DrinksReform.org here: http://www.drinksreform.org/blog-1/2017/6/8/why-beer-taxes-are-129-in-tennessee-but-just-2-cents-in-wyoming

What if Amazon disrupts the heavily regulated beer industry with Whole Foods?

With Amazon's recent purchase of Whole Foods, industry observers are wondering whether the move could help shake up the antiquated post-Prohibition three-tiered legal regime present in most states. As Jason Notte writes for MarketWatch, alcohol distributors will likely use their significant political sway in state capitals to try to resist any reform efforts:

"So Amazon’s proposed Whole Foods purchase has to affect beer, right? It could, but there are many variables involved...

In the three-tier system of distribution set up after Prohibition, wholesalers (Tier 2) play a vital role in getting beer from brewers (Tier 1) to stores, bars, restaurants and other points of sale (Tier 3).

They also tend to get surly when they feel they’re being skipped, as Texas craft brewers discovered when the state passed a bill forcing brewers that produce 225,000 barrels of beer or more each year to buy back their own beer from distributors if they want to sell it in taprooms.

In North Carolina, breweries are suing the state after wholesalers encouraged lawmakers not to raise the 25,000-barrel limit for breweries distributing their own beer. By “encouraged,” we meant “gave them $1.5 million over the last four years,” but this is the same group that flat out threatened brewers over alleged non-payment of taxes..."

Read more here: http://www.marketwatch.com/story/what-if-amazon-disrupts-the-heavily-regulated-beer-industry-with-whole-foods-2017-06-22