NYC's Subway and Buses Ban Alcohol Advertising


New York City's Metropolitan Transportation Authority has decided to ban all alcohol ads in subways and buses around the city, as reported by the New York Times and others:

The board of the Metropolitan Transportation Authority on Wednesday banned advertising of alcoholic beverages on New York City buses, subway cars and stations, contending that the social benefits of deterring underage drinking outweighed the loss of revenue.

After years of pressure from grass-roots organizations, the board voted unanimously in favor of the ban, which will go into effect in January...

Effective immediately, the agency will no longer accept new alcohol-related ads; existing contracts for such ads will be honored until the contracts expire at the end of the year...

Read more here. As an article in AdAge notes, this goes against recent decisions by other cities around the country to repeal alcohol advertising bans in their public transit systems:

Several big-city transit agencies already ban alcohol transit ads, including Los Angeles, San Francisco, Detroit, Seattle, San Diego, and Baltimore, the MTA said.

The Distilled Spirits Council, a trade group representing liquor brands, cited other cities such as Chicago, Charlotte and Washington D.C. that "have recently overturned bans on alcohol advertising on public transit with each city experiencing absolutely no negative effects." The Chicago Transit Authority reversed its ban in 2012 but kept some restrictions in place. Brands cannot advertise on buses, for instance, and alcohol ads cannot "exceed 9.99% of the total advertising space on the transit system at any one time."

Washington D.C.'s transit system overturned its alcohol ad ban in late 2015, ending a 20-year-old prohibition.

More here

[R Street's Kevin Kosar has previously written about "The Strange War on Alcohol Advertising."]

County-Owned Liquor Stores in Maryland Were Given Extra Discounts


Maryland's alcohol regulation system devolves significant power to individual counties, which creates a patchwork of booze regulations across the Old Line State. In Montgomery County, for example, the county government controls all spirit sales. According to Bethesda Magazine, state liquor regulators recently uncovered evidence that Montgomery County was obtaining discounts from producers beyond what other private wholesalers in the state were being offered, which is a violation of state law:

Less than four months after putting in place a new pricing model, Montgomery County’s Department of Liquor Control (DLC) is redoing its prices again in response to a warning from the state comptroller’s office.

Jeffrey Kelly, the chief of the comptroller’s Field Enforcement Division, which regulates the alcohol industry in the state, sent the DLC a bulletin Sept. 12. The bulletin notified the county agency that it might be getting discounts from alcohol producers and suppliers that other distributors in the state aren’t receiving—a violation of state law.

The DLC controls the wholesale distribution of all alcohol and retail sale of liquor in the county—a unique arrangement in the state. Other jurisdictions’ alcohol sales are served by traditional privately run distributors, rather than a county agency. The DLC generates about $30 million in profit for the county that is used to pay off infrastructure bonds and supplement the general fund...

Read the rest here.

How the PLCB enacts stealth taxes on Pennsylvanians with price markups


R Street's Jarrett Dieterle took to the pages of the Pittsburgh Post-Gazette to argue that the PLCB's liquor mark-up authority constitutes a form of stealth taxation power:

Pennsylvanians are used to buying their pinots and bourbons from state-run Fine Wine and Good Spirits stores, but most are probably unaware that the Keystone State is also using alcohol sales to enact stealth tax increases.

Like many so-called “control” states, the Pennsylvania Liquor Control Board sets the markup prices for the alcohol it sells to the public. The revenue derived from these markups is used to help fund the state government at-large, which means the markups are functionally analogous to taxes. This setup is problematic on many levels, and it’s far past time for Pennsylvania to reform it...

The connection between the PLCB’s markups and general government funding increasingly has become explicit. When the PLCB announced its recent price increases, an agency representative cited the rising costs of public pensions and unemployment benefits as the reason for the hikes. Gov. Tom Wolf even took it a step further by proposing that PLCB profits be used as security for state loans, further underscoring the relationship between the markups and government funding.

Defining what actually counts as a tax is important, since our democratic system of governance long has recognized that only elected representatives should able to enact taxes.

You can read the rest of the op-ed here. The op-ed was based on a larger policy report Dieterle wrote on the issue of control state liquor mark-ups (available here).

Wines Are No Longer Free to Travel Across State Lines

As has previously noted, states and private shippers are cracking down on interstate wine shipments around the country. Eric Asimov, wine columnist at the New York Times, has taken note of this trend and writes about it in his latest column:

"For a golden moment, motivated wine lovers could rely on high-speed internet as a sort of national wine shop. A consumer in Little Rock, Ark., for example, unable to find particular bottles locally, could order them from a shop in New York. It required only a willingness to pay shipping costs.

Those days are no more. In the last year or so, carriers like United Parcel Service and FedEx have told retailers that they will no longer accept out-of-state shipments of alcoholic beverages unless they are bound for one of 14 states (along with Washington, D.C.) that explicitly permit such interstate commerce.

New York is not one of those 14 states, as The Times’s wine panel learned to its chagrin in the last year...

For consumers who live in states stocked with fine-wine retailers, like New York, the restrictions are an inconvenience. For consumers in states with few retail options, they are disastrous. It’s hard enough outside of major metropolitan areasto find wines from small producers. The crackdown makes it that much harder..."

Read the rest of the column here.

Bringing out-of-state alcohol into Iowa could make you a criminal


It may seem hard to believe, but if you are an Iowa resident who hops across state lines to visit a Minnesota brewery and returns with a growler, you are technically a criminal under Iowa law. Perhaps most bizarre of all, the law does not apply to distilled spirits (just beer and wine). A recent editorial by The Des Moines Register explains:

"In Iowa, you could be a bootlegger and not even know it.vIf you bring back a couple of bottles of zinfandel from a California winery, or even from an Omaha supermarket, you may be committing a serious misdemeanor.

If you vacation in Wisconsin and return with a case of New Glarus Brewing’s Spotted Cow ale — popular but sold only in that state — you could end up, theoretically, in the hoosegow.vBut if you import four liters of tequila from your trip to Mexico? No problem.  

Such is the bizarre state of Iowa’s alcohol laws. Last week, the Iowa Alcoholic Beverages Division sent out an education bulletin clarifying that “only alcoholic liquor can be personally imported” — up to one liter from another state or four liters from another country.   

But beer and wine, even if it’s consumed only in your home? No, according to the division’s interpretation.

Beer and wine are not expressly mentioned in the law on importation and do not fit the definition of liquor, said Stephanie Strauss with the Iowa Alcoholic Beverages Division. She said the division sent out the bulletin because it has received questions about the law, including from returning members of the military.

A serious misdemeanor is punishable by up to one year in jail and a fine of between $315 and $1,875."

Read the rest of the editorial here.



Does federal tax reform for booze now have majority support in Congress?


One of the main alcohol reform pushes at the federal level is the Craft Beverage Modernization and Tax Reform Act, which would lower federal excise taxes on all types booze. The act has garnered bipartisan support in years past, but has failed to make it through Congress. According to Brewbound, however, the act has now achieved majority support in the U.S. Senate:

A majority of U.S. Senate members now support legislation that would reduce excise taxes on all brewers and importers.

According to a press release jointly produced by six beverage lobbying groups, including the Beer Institute and the Brewers Association, 51 senators have co-sponsored Senate Bill 236, known as the Craft Beverage Modernization and Tax Reform Act (CBMTRA).

The legislation, which was introduced into the Senate on January 30 by Ron Wyden (D-OR) and Roy Blunt (R-MO), also has majority support from 281 members of the U.S. House of Representatives who have backed a companion bill (H.R. 747).

Full article here. will continue to monitor the act's progress in the coming months. As R Street's Jarrett Dieterle has noted, the current version of the act no longer includes a provision that would legalize home or hobby distilling (past versions of the bill did include this reform).


R Street's Jarrett Dieterle Writes About Moonshine History for NPR


R Street's Jarrett Dieterle wrote a piece for NPR's The Salt (winner of the James Beard Award for best food blog) on Virginia moonshining history:

In 1620, the Rev. George Thorpe sent a letter from a plantation near Jamestown, Va., to England describing a "good drinke of Indian corne" that he and his fellow colonists had made. Historians have speculated that Thorpe was talking about unaged corn whiskey, and that his distillation efforts on the banks of Virginia's James River might have produced America's first whiskey. Nearly 400 years later, Belle Isle Moonshine, just 30 miles away, up the river in Richmond, is again producing unaged corn whiskey — what it calls moonshine.

Across the nation, moonshine is booming. Sales have increased by 1,000 percent nationwide between 2010 and 2014, according to the market research firm Technomic. Some places, like Gatlinburg, Tenn., even use moonshine as a tourist draw. But the revival has been especially strong in Virginia, where many of the twists, turns and car chases that are a part of moonshine lore took place.

The whole article can be found here.

New Hampshire Legislature Introduces Bill to Legalize Home Distilling


A bill was recently introduced in the New Hampshire legislature that would legalize home distilling in the state. Even if the bill passes, however, hobby distillers in the Live Free or Die state won't be able to start making spirits right away. That's because home distilling still remains illegal at the federal level, which means the Hew Hampshire law would only take effect if the feds also legalize home distilling. According to the Hobby Distiller's Association, 8 other states currently have similar laws that would allow home distilling if the feds ever give it the green light.

R Street's Jarrett Dieterle has has written about home distilling in the past and the federal efforts to legalize it:

In the aftermath of its failure to pass a health-care overhaul, Congress appears poised to turn to tax reform. While income and corporate tax rates will likely garner most of the attention, alcohol producers are also hoping for changes to booze taxes. Specifically, brewer, vintners, and distillers have been pushing on Capitol Hill for the Craft Beverage Modernization and Tax Reform Act, which would lower federal excise taxes on alcohol.

Despite attracting nearly 300 co-sponsors in the House and more than 50 in the Senate, the bill has failed to get a vote in recent sessions of Congress. There’s renewed hope for the act this year—perhaps as part of a larger tax overhaul—but the current version of the bill is missing a key feature of previous iterations: the legalization of home distilling. Whereas the 2015 version of the act included a provision that would have permitted distillation of up to 24 proof gallons per year for personal consumption, that provision has been stripped from the new version of the bill.

Dieterle points out that home brewing and winemaking is already legal and argues that home distilling should be too (full article here).

L.A. to Restrict How Alcohol is Sold at Gas Stations


The Los Angeles City Council has voted to place additional strictures on how alcohol can be sold at local gas stations. The new regulations prohibit things like selling alcohol within 5 feet of the cash register and advertisements that are visible from gas pumps. The purported rationale is reduce drunk driving and alcohol sales to minors, according to NBC 4 Los Angeles:

A Los Angeles City Council committee voted Tuesday in favor of adopting stricter enforcement of the sale of alcoholic beverages at gas stations in an effort to reduce drunk driving and the availability of alcohol to minors...

In California, the manufacture, distribution, storage and sale of alcohol is regulated by the Department of Alcoholic Beverage Control, but the city is responsible for permits to operate gas stations and other businesses...

Violations of the sale of alcohol at a gas station include:

  • No beer or wine shall be displayed within five feet of the cash register or the front door unless it is in a permanently affixed cooler as of Jan. 1, 1988.
  • No advertisement of alcoholic beverages shall be displayed at motor fuel islands, buildings, or windows.
  • No sale of alcoholic beverages shall be made from a drive-in window.
  • No display or sale of beer or wine shall be made from an ice tub.
  • Employees on duty between the hours of 10 p.m. and 2 a.m. who sell beer or wine shall be at least 21 years of age.

The rest of the story can be found here.