Corruption Charges Stem from Payments to Pennsylvania Liquor Regulators

Oftentimes having the government in the drinks business invites corruption, which appears to be what happened in Pennsylvania. Law360.com reports that four vendors in the state have reached a settlement to pay $9 million in penalties because of gifts they had illegally provided to Keystone State liquor regulators:

"Federal prosecutors said Thursday that four vendors have agreed to pay a total of $9 million in penalties over gifts provided to Pennsylvania Liquor Control Board officials, nearly two years after the agency’s ex-marketing director copped to charges stemming from a related kickback scheme. 

The penalties come as part of non-prosecution agreements with the U.S. Attorney’s Office for the Middle District of Pennsylvania in which the vendors admitted to showering PLCB officials, who helped operate a system of more than 600 state-owned liquor stores, with gifts including all-expenses-paid trips, tickets to concerts and sporting events, and cash.

'Although the history between these organizations and the [PLCB] is clearly disturbing, it is in the interests of justice to expose this history and hold the organizations responsible,' U.S. Attorney Bruce Brandler said in a statement. 'The monetary penalties imposed on these successor organizations more than disgorges the financial benefits received and discourages future misconduct by those in the industry.'

The non-prosecution agreements come after James Short, the board’s former marketing director, pled guilty in November 2015 on charges that he accepted bribes and kickbacks from two vendors in exchange for favoring them in making policy decisions..."

Read the rest here: https://www.law360.com/articles/948961/vendors-ink-9m-deal-over-gifts-to-pa-liquor-officials

Total Wine wins lawsuit against Massachusetts on discount pricing

Total Wine continues its efforts to challenge state laws that restrict alcohol retailing. As Dan Adams reports for The Boston Globe, the chain alcohol store prevailed in a lawsuit brought by Massachusetts alleging that the store was selling their booze below-cost, in contravention of state law:

"A Boston judge has ruled that Massachusetts alcohol retailers can legally sell booze at deep discounts when they order it in bulk, rebutting state regulators who said the practice can violate a state law that prohibits selling alcohol at less than cost.

The decision Tuesday by Suffolk Superior Court Judge Robert B. Gordon came in response to a lawsuit brought by the country’s largest alcohol chain, Maryland-based Total Wine & More, against the state Alcoholic Beverages Control Commission.

In January, the agency slapped Total Wine’s Everett and Natick stores with several-day license suspensions for allegedly selling Smirnoff vodka, Bacardi rum, and other liquors for $1 to $6 below their wholesale costs. State alcohol laws and regulations forbid retailers from offering such below-cost 'loss leaders,' a policy the state says is necessary to prevent excessive drinking and predatory pricing.

Total Wine sued to overturn the license suspensions. The company argued its prices for consumers weren’t actually below its costs but were based on quantity discounts the company expected to receive from its wholesalers later on, after it had ordered enough of the products to qualify. The ABCC, Total Wine said, unfairly refused to acknowledge the true, ultimate cost of the liquor to the company, and instead looked only at initial invoices that listed a higher cost.

Gordon, the judge, agreed, saying the ABCC’s 'starchy' and 'semantic' definition of cost 'bears no rational relationship to the legislative policy of prohibiting anti-competitive pricing practices.'

'There was clearly no predatory pricing carried out in this case,' Gordon wrote in his decision, 'only a salutary effort by a retailer to pass along savings derived from volume purchasing at the wholesale level to its customers. This is something the law should promote rather than punish.'..."

Read the whole article here.

How North Carolina Passed Its Brunch Bill

As previously covered on DrinksReform.org, North Carolina's legislature passed the so-called Brunch Bill, which, among other reforms, allows restaurants in the state to sell alcohol starting at 10am on Sundays rather than noon. (Or, more precisely, allows counties in the state the leeway to let restaurants sell Sunday morning booze). N.C. Gov. Rory Cooper signed the bill a few weeks ago, and the Free to Brew podcast has an excellent interview with Eric Rowel about this reform victory:

Buying beer and mimosas at 10AM on Sunday! When did North Carolina become so edgy?

Eric Rowel, local Mecklenburg County activist, the figure behind #sundayequality, and concerned citizen joins the show not just for a victory lap but an explanation of how a bill over Sunday alcohol sales was passed in North Carolina. While other states have eradicated blue laws, getting 2 hours extra on Sunday was a huge achievement for this Old North State.

We discuss the victory, how future alcohol reform can succeed, and why this policy gained such traction and support...

Check out the interview here.

 

Utah's plans to revisit DUI law change are now on hold

Utah recently passed a controversial DUI law that lowered the blood alcohol level for a DUI violation to .05 from .08. After the change drew ire from critics--including the president of MADD--Utah government officials suggested they would revisit the policy change. Those plans appear to be on hold now, according to Utah Policy:

"When the controversial 0.05 percent DUI bill passed the end of the 2017 Legislature, Gov. Gary Herbert signed it into law saying he’d call a summer special session – perhaps in July – to revisit the whole issue of drinking and driving in Utah.

Well, the July legislative interim day will pass next week without such a special session.

And now House Speaker Greg Hughes, R-Draper, tells UtahPolicy that there may not even be a special session on the 0.05 percent bill this year – the matter will just be dealt with in the January-March 2018 general session.

Herbert now tells UtahPolicy that he, too, doesn’t see the need for a special session on the DUI bill..."

Read more here: http://www.utahpolicy.com/index.php/features/today-at-utah-policy/13794-lawmakers-say-they-re-in-no-hurry-to-fix-05-dui-law

Drinks Reform previously covered the Utah DUI law here and here.

Are "open container" laws the next big thing in booze policy?

Outside of New Orleans, there aren't too many places in the U.S. that you can casually stroll the sidewalk with a cocktail or beer in your hand. That may be changing, however, as Esther Fung reports for the Wall Street Journal:

"Property developers trying to create buzz for open-air shopping districts are lobbying regulators to relax rules to allow patrons to walk around streets and parks with alcoholic beverages.

As landlords hustle to get customers into their properties, they are looking to tap into demand for food-and-drink experiences. The hope: that lively atmospheres will encourage patrons to linger and shop.

Three years ago, Atlanta-based developer Vantage Realty Partners LLC proposed an open-container ordinance in Duluth, Ga., where it developed a retail and entertainment complex called Parsons Alley in a historic district downtown. The ordinance passed this year.

'Every restaurant and retailer loved it. It increases their sales. Their customers don’t have to stay confined in their premises and can walk to the town green or fountain with a drink,' said Chris Carter, co-founder of Vantage Realty..."

Read the whole thing here: https://www.wsj.com/articles/property-developers-push-for-open-drinking-on-city-streets-1500370201

Alabama ABC reverses margarita pitcher ban but questions remain

As recently covered on DrinksReform.org, R Street's Cameron Smith called out Alabama's ABC about its state-wide crackdown on margarita pitchers. In a new piece for AL.com, Smith recounts the whole episode and discusses how the legal standard at issue is still far from clear:

The Alabama Alcoholic Beverage Control Board (ABC) didn't want you wasting away in Margaritaville, so they banned pitchers of the frozen concoction outright. Then I called them out on it, Alabamians pressured the agency, and the ABC reversed the pitcher ban...I think

In reversing the ban, ABC spokesman Dean Argo announced, "The Code speaks to beverages that are 'customarily' served in pitchers." That's a true statement even if it's found in a different section from the one the ban relied upon.

He continued to note, "The menus of many restaurants and bars in Alabama already offer several beverages by pitcher." That's a fuzzier claim, because Argo told me unequivocally "that only beer may be served in a pitcher." According to his statement, pitchers of other alcoholic beverages might have appeared on menus, but the ABC considered them unlawful. 

Argo concludes the ABC's announcement by saying the "updated interpretation should give licensees the flexibility they need to meet the needs of their customers, while maintaining the integrity of the original rule." 

Well that's clear as mud...

Read the whole column here: http://www.al.com/opinion/index.ssf/2017/07/alabama_abc_reverses_margarita.html

 

The Strange War On Alcohol Advertising

R Street's Kevin Kosar takes a look at the bizarre effort afoot to ban alcohol advertising. It appears to be spurred by concerns over the health effects of drinking, but as Kosar points out, the evidence points in the other direction:

Earlier this year, there began a drum beat to ban drinks advertising. There was the Washington Post, which ran an article titled, “For women, heavy drinking has been normalized. That’s dangerous.” To ensure readers were sufficiently panicked, they included “Nine charts that show how white women are drinking themselves to death.” The authors fingered alcohol advertising and even an Amy Schumer movie.

The ivory tower, eager to help, also chimed in. “It is a looming health crisis,” declared one academic. Addiction journal, an always cheerful read, issued a “call for governments around the world” to pass laws banning alcohol advertising...

What is all so bizarre is that the data on alcohol consumption paint a very different picture of America and drink. A new Gallup survey reports about six out of ten Americans today consume alcohol occasionally, which is about the same level as it always has been...

Read the rest here

Comparing Michigan vs. Maryland in Best Beer Laws

Every state has its share of outdated alcohol laws, but side-by-side state comparisons can be useful for showing how restrictive laws and regulations can impact the growth of the alcohol industry. John Lee of WYPR.org compares Maryland and Michigan in the beer industry:

"This is a tale of two states and their approaches to local brewers.

The folks at the Founders Brewery in Grand Rapids, Michigan, are making 450,000 barrels of beer each year and selling 6,000 of those barrels in their tap room, one pint at a time. That works out to about one and a half million pints. No Maryland brewer comes anywhere close to that.

Founders’ co-founder Mike Stevens says there is no cap on the number of beers a Michigan brewery can sell in its taproom, and that’s been good for business.

'We found that the more breweries that opened and the more tap rooms that opened, the more consumer excitement that followed,' he said.

So, while the craft brewing industry is flying high in Michigan—the Brewers Association ranks it sixth in the nation—a battle brews in Maryland—ranked 25th by the brewers--over loosening regulations.

In Maryland, tap room sales had been capped at 500 barrels a year. That was raised to 2,000 barrels by the General Assembly this year, after Guinness said it wanted to build a brewery and tap house in Baltimore County, and to sell a lot of beer by the pint.

But then lawmakers added a buyback provision. It requires a brewer who wants to sell more than 2,000 barrels, to sell that additional beer to a wholesaler and then buy it back. A brewer can sell an additional 1,000 barrels that way..."

Read the rest here: http://wypr.org/post/while-maryland-broods-over-beer-michigan-s-craft-beer-industry-grows

Alabama Backs Down on Targeting Margarita Pitchers

In these hot summer months, nothing refreshes like a Margarita. But in Alabama, the state Alcoholic Beverage Control Board had banned pitchers of this limey and refreshing libation. Seriously.

R Street's Cameron Smith exposed the ban and advocated for its repeal in AL.com after a series of email exchanges with ABC representatives:

"The Alabama Alcoholic Beverage Control Board (ABC) doesn't want you wasting away in Margaritaville, so they've banned pitchers of the frozen concoction outright.

No, I'm not joking.

But we shouldn't be surprised. This is the ABC that cracked down on people drinking while dining on the sidewalks in Mobile. It's the same ABC that cut a deal to impose a five percent liquor mark-up to help the legislature and the governor enact a back-door tax hike.

Now the agency has taken to reminding licensees of its legal "interpretation" that beer is the only alcoholic beverage that may be served in a pitcher..." [Read the rest here].

ABC claimed it was concerned with the tequila in margarita pitchers "settling" over time, which could lead to situations where the first few drinks poured from the pitcher had less alcohol than the ones from the bottom of the pitcher. As Smith pointed out, this amounted to an argument that a group of legal adults "can't figure out how to handle a pitcher of margaritas shared among them."

Smith's column generated enough outcry among Alabama residents that Dean Argo, ABC's government relations manager, took to AL.com to announce that the board would no longer target margarita pitchers. In short, ABC has backed off, at least for now. (The Associated Press also covered the reversal).

While this was a clear win for margarita lovers across the state, Argo ominously suggested that the state may still draw a line between which types of drinks can be served in pitchers and which cannot. The dividing line would appear to be if the drink in question is "customarily" served in pitchers. So, margaritas and beer would seem to be safe, but what about less clear cases like mojitos? Mojitos are certainly served in pitchers sometimes, but is it "customary" to serve them that way? And how about bottled cocktails, which have become all the rage in the cocktail world? Are they a "pitcher," and if so, are they "customary"?

The ABC's decision to draw the line at what types of drinks are "customarily" put into pitchers is the type of ambiguous legal phrase that only a government lawyer could love. Call it "pitcher ambiguity," and suffice it to say the DrinksReform.org team will be the first to blow the whistle if more pitcher shenanigans go down in Alabama.

Note: Cameron Smith has also been tracking and writing about the Alabama ABC's attempt to enact a stealth tax increase by increasing the state liquor mark-up: http://www.drinksreform.org/blog-1/2017/6/21/alabama-abc-board-approves-increase-in-liquor-markup

Maui County, Hawaii's Liquor Commission Kills 24/7 Booze Sales

In May of this year, Maui County, Hawaii's liquor regulators voted to allow liquor stores in the county to sell booze 24 hours a day. After a sustained pressure campaign by opponents of the move, the liquor commission has now recanted and repealed the reform. Hawaii News Now has the story:

"The Maui County Liquor Commission unanimously voted Wednesday to repeal a law that allows liquor sales 24 hours a day.

The measure first passed in March upsetting critics who felt it would lead to an increase of drunk driving deaths.

After months of lobbying and testifying, opponents are calling this a victory..."

Read more: http://www.hawaiinewsnow.com/story/35873436/maui-liquor-commission-repeals-law-allowing-liquor-sales-24-hours-a-day

DrinksReform.org previously covered the initial rule change and backlash here: http://www.drinksreform.org/blog-1/2017/5/23/alcohol-law-changes-in-maui-hawaii-cause-firestorm