New Mexico: Restaurants Are Discounting Drinks TOO MUCH

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In a feature piece on Applebee’s “Dollarita” (the chain restaurant’s famed $1 margarita), PUNCH notes that New Mexico actually forbids the restaurant from selling these cocktails for $1:

Consisting of an ounce and a quarter of tequila and nearly four ounces of Applebee’s house Margarita mix (the company uses an undisclosed proprietary formula), there’s nothing terribly unusual about the Dollarita—other than its price tag…

The patchwork of liquor laws in the U.S. does throw a bit of a wrench into the Applebee’s plan for Dollarita domination, though not as much as you might think. “It’s a big country with lots of laws, and we want to make sure we’re compliant,” says Kirk. “We work with many of the state liquor authorities to make sure this is the right thing to do.” In New York, for example, customers are limited to three drinks, and in New Mexico, Applebee’s cannot sell $1 drinks (though it can sell $2 ones). Despite this, Kirk says, “nearly 100 percent” of the locations do offer Dollaritas…

Read the whole piece here.

This is likely the result of a provision in the state code that forbids “the sale or delivery of alcoholic beverages by the drink for less than half the usual, customary, or established price for a drink of that type on the licensed premises.” The result? Sadness for New Mexicans.


The Constitutional Issues With TTB's Proposed Alcohol Labeling Rules

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Late last year, the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a proposed rulemaking to reform regulations surrounding the advertising and labeling of alcohol products. Marc Robertson of the Washington Legal Foundation writes for Forbes about the constitutionally suspect parts of the agency’s proposal:

TTB’s efforts to streamline the rules and finally recognize long-standing First Amendment precedents are welcome. But parts of the proposed rule do not adequately protect the commercial speech rights of alcohol-beverage producers and consumers. We’ll focus here (as WLF will in its forthcoming public comment) on the prohibition of statements on labels or in advertisements that are disparaging, false, misleading, obscene, or indecent…

While the TTB’s proposal would prohibit false speech (unprotected under the First Amendment), it also targets truthful commercial speech that may tend to mislead or offend consumers. This provision accords the TTB a great deal of latitude to subjectively judge alcohol producers’ speech. While there is bound to be discretion and subjective review of any agency regulation, the TTB’s prohibition of certain disparaging statements or indecent labels or advertisements goes too far…

In addition to the constitutional concerns with its vague, subjective standards for alcohol labels and advertisements, the TTB must consider the message such paternalistic rules sends to state beverage control boards, which also review alcohol product labels. Such regulators have taken aim at craft beer names like “Dirty Bastard,” “Backwoods Bastard,” and “Raging Bitch,” as well as label images like a cartoon frog with its middle finger extended. Some of those decisions were successfully challenged under the First Amendment, but states would be better off helping their local businesses than forcing them into lawsuits…

The whole article is well worth a read here.

California Tries to Legalize Wine (and Beer) Volunteers Based on R Street Recommendation

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Small wineries and breweries throughout the country often use volunteers to help produce and package their products. Doing so both supplies these small producers with extra labor and allows the volunteers (who are often craft beverage enthusiasts) to learn more about the production process. In California, however, the use of volunteers is technically a violation of the state’s labor code, and the state’s Department of Industrial Relations has previously slapped hefty fines on California wineries for using volunteers. R Street’s Western Region Director Steven Greenhut wrote about this issue back in 2014, and now, directly inspired by Steve’s column, state lawmakers are trying to fix the problem. Their new bill would exempt small wineries and microbreweries from this provision of the state labor code, and Steve submitted a letter of support on behalf of R Street for the reform:

I write you in support of S.B. 448, legislation that “would exempt a small winery or small microbrewery … that utilizes volunteers who perform part-time labor in exchange for hands-on training, from having these volunteers classified as employees or apprentices.”

These small wineries and breweries clearly deserve an exemption from this section of the labor code given that many people like the opportunity to volunteer at these businesses to learn about the trade. Such volunteers typically are older people who enjoy the wine and brewery culture. They aren’t interested in the money, but in learning about the fascinating process of making wine and beer. In fact, I’ve volunteered at a winery before with my church group where we picked grapes and made our own wine as part of an indescribably enjoyable afternoon…

Read the letter of support here, and Steve’s 2014 column that inspired the law here.

R Street Continues Push for Relaxing Open Container Laws

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R Street has long supported relaxing open container laws as a way to both create safer drinking environments and revitalize urban spaces. R Street’s Director of State Government Affairs, Marc Hyden, who resides in Georgia, has led the charge in urging more Peach State cities to liberalize their open container laws, and he recently supported testimony in favor of a proposal to do so in Marietta, Georgia:

Over the past several years, the state of Georgia has been updating its alcohol policies to bring them in line with the rest of the country. Indeed, many Georgia cities—Alpharetta, Acworth, Canton, Duluth, Kennesaw, Powder Springs, Smyrna, Stockbridge, Savannah, etc.—have already approved open-air drinking districts, which authorize drinking in specifically designated areas.

These endeavors go hand in hand with the current national movement to permit open containers in entertainment areas…

The problem with prohibitions of open-air drinking is that they might lead to adverse public health effects. The Sport Journal — a peer-reviewed academic periodical — highlighted that some individuals binge drink before alcohol-free events so that they can maintain their buzz for the duration of the event. If these people could drink at the event, then they may not feel the urge to adopt such behavior. Instead, they could nurse their beverages more responsibly over a lengthier period of time…

Furthermore, the creation of an open-air drinking district in Marietta could bring about an economic windfall. It is not a coincidence that a host of new open-air drinking districts have developed across the state. Rather, it seems that open-air drinking districts are good for business. If they are, then relaxing unnecessarily strict alcohol ordinances will attract more development. Beyond this payoff, open-air drinking districts may lure tourists as well as conferences, festivals, concerts and other events, helping local companies thrive and increasing tax revenue…

More here.

North Carolina Lawmakers Seek a Bevy of Reforms to ABC System

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North Carolina is one of about a dozen remaining states in which the government controls the retail sales of alcohol. The state’s ABC system has been mired in scandal recently after a state audit uncovered millions in waste, which has spurred calls for reforming the state’s antiquated alcohol laws. According to the Greenville Daily Reflector, several lawmakers have introduced an omnibus reform bill with numerous proposed changes:

A bill filed in the N.C. House would dramatically revamp how the state governs liquor sales and distribution, including a provision allowing for Sunday sales. Distillers, brewers, and consumers would be among the beneficiaries of the expansive measure, modernizing a system entangled in arcane laws dating back to the end of Prohibition.

Reps. Chuck McGrady, R-Henderson; James Boles, R-Moore; Susan Fisher, D-Buncombe; and Jon Hardister, R-Guilford, are primary sponsors.

Lawmakers have already introduced several items presented in Tuesday's bill, such as a move - House Bill 389 - to authorize public colleges and universities to allow the sale of alcohol at stadiums, athletic facilities, and arenas on school property, as well as a move paving the way for Sunday sales - Senate Bill 87.

The omnibus measure introduced Tuesday, H.B. 536, ABC Omnibus Regulatory Reform, would, for example, allow distillers to sell spirituous liquor directly to consumers in other states and removes a limit on sales to customers visiting one of the nearly 60 craft distilleries in the state. As it stands, customers can buy five bottles from a distillery per year. All sales now are recorded and tracked.

The bill also would allow tastings in state-run ABC stores and provides a local option for cities and counties to adjust store hours, including for Sunday sales…”

Read the rest here.

R Street's Jarrett Dieterle Interviewed About Nebraska Alcohol Taxes

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Nebraska’s legislature is considering increasing taxes on beer, wine, and spirits in an effort to raise more revenue and provide property tax relief. The Heartland Institute interviewed R Street’s Jarrett Dieterle about the proposal:

Local craft breweries that produce small volumes of beer are growing in popularity nationally and in Nebraska, says Jarrett Dieterle, director of commercial freedom policy at the R Street Institute.

“The craft beverage industry is booming cross the country,” said Dieterle. “In 2017, craft breweries created the second-most manufacturing jobs of any industry in America.

“Nebraska is no exception,” Dieterle said. “Nebraska has 3.5 breweries per 100,000 people, which puts it in the top 15 states for breweries per capita. Overall, breweries had a $465 million economic impact in the state.”

The craft beer industry will shrink if Nebraska moves forward with this tax hike, says Dieterle.

“Research has demonstrated that increasing taxes on products like beer can lead to a decrease in brewpubs and breweries in a state,” said Dieterle…

Governments shouldn’t focus on a specific product category to increase revenue, says Dieterle.

“Generally, state and local governments fund their operations through a combination of property, income, and sales taxes,” said Dieterle. “Singling out the alcohol industry to bear the brunt of revenue-generation in the state makes little sense,” Dieterle said…

Read the whole article here.

Effort to Lower BAC Level Spreads to More States

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Last year, Utah became the first state to lower the blood-alcohol limit for drunk driving from .08 to .05. Utah’s change was followed by a report from the National Academy of Sciences, calling for more states to follow suit. Now, several states are considering .05-level legislation, including Michigan, California, and New York. The OC Register’s editorial board weighed in one why a lower limit could be counterproductive:

Many people drink less while out at pubs or restaurants to avoid getting stopped for DUI. Such arrests can lead to jail stays, costly legal bills and the loss of one’s driver’s license. People who actually are impaired deserve those harsh punishments, but we fear that reducing the legal limit will mainly ensnare people who might not be impaired. The goal should be removing drunks from the road, not arresting non-drunks.

National Highway Traffic Safety Administration data show that 92 percent of alcohol-related fatalities involve a driver with a BAC of 0.10, according to Jackson Shedelbower of the American Beverage Institute. This confirms other information we’ve seen: the main drunken-driving dangers come from a relatively small group of heavy drinkers, not from people who have had a glass of wine or two with dinner…

We fear that lowering the BAC will simply make it easier for police agencies to set up checkpoints and then issue press releases about the growing number of drunken drivers that they have removed from the road. Yet it’s better to divert scarce resources to programs and policing efforts that capture the real scofflaws…

Read the rest here.

As Beer Market Matures, Many Regulatory Obstacles Remain

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As the craft beer movement has continued to explode in recent years, some analysts have warned that the market is becoming over-saturated. R Street’s Jarrett Dieterle has argued that in the context of a saturated market, it’s even more important to eliminate restrictive government-imposed barriers that hurt producers; after all, the market providers enough pressure without harmful (and needless) external hurdles being layered on. Food policy expert Baylen Linnekin recently sounded a similar warning in an article for Reason.com:

While the market for craft beer is still growing, the rate of growth has slowed considerably in recent years. Brewers Association chief economist Bart Watson last year said the craft beer industry his group represents is showing signs of "deceleration."

I'm confident the industry's growth can continue. But here's a caveat: craft brewers also continue to face their share of outside obstacles, chiefly in the form of state laws that hinder growth and profitability…

 I'm generally optimistic about both the industry and trends in state laws in the decade or so I've been writing about the industry. But I'm also frustrated by the slow pace of change and by seeing the same tired arguments…

Craft beer is a highly competitive, innovative, and important industry with boundless potential. In the end, though, the industry can only go as far as lawmakers will allow.

Linnekin’s whole article is well worth a read.

The DrinksReform.org team has also previously interviewed Linnekin on the absurdity of America’s alcohol laws.

Agreement Reached to Lift North Carolina's Self-Distribution Cap

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As our team has previously covered, North Carolina caps the number of barrels that breweries in the state can self-distribute at 25,000 annually. This means that once a brewery exceeds that barrel limit, it is forced to work with middlemen distributors in order to sell its beer in stores and restaurants in the state. Unsurprisingly, this creates a whole host of problems for growing breweries. While previous attempts to lift the self-distribution cap have failed in the state legislature, the AP reports that a deal to lift the cap has been reached (although the cap still remains in place at a higher level, rather than being scrapped entirely):

Small North Carolina brewers and alcohol wholesalers raised glasses on Thursday to what they call a legislative compromise that allows the breweries to keep control of their products longer as they grow.

Legislators from both political parties and industry representatives announced an agreement in General Assembly bills filed this week to let these craft breweries sell double the amount of their beer annually on their own compared to what current law allows…

The legislation would allow the creation of a new classification of brewers that can self-distribute up to 50,000 barrels a year. While these mid-sized brewers would still be able to sell up to 100,000 barrels, distributions above the first 50,000 barrels would have to be performed by a wholesaler.

Read the rest here.

Washington State Craft Distillers Plea for More Tasting Room Flexibility

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In Washington State, distillers are currently allowed to operate only one on-site tasting room with serving limits of 2 oz. per customer. Crosscut.com recently ran a feature on the push among distillers in the Evergreen State to expand their flexibility in order to survive:

[P]roducers of Washington’s craft spirits say they’re not sure their industry has a future if they don’t get help from the state Legislature this year.

A proposal at the state Capitol would allow craft liquor distillers like Hembree to open two additional off-site tasting rooms, which they say would allow them to reach more customers. Unlike the single tasting room allowed under current rules, the two new tasting rooms would not be attached to a distillery’s main production center, allowing the business to expand to new locations.

Senate Bill 5549 also would allow craft distilleries more freedom to serve sample cocktails, so they can show customers how to use local spirits in mixed drinks at home…

Right now, the state’s craft liquor rules allow distilleries to serve half-ounce samples, which can be mixed with other spirits only if those, too, are produced on site. Under the bill, Washington’s craft distillers would be allowed to serve some craft spirits made by other local distilleries, expanding the variety of drink samples they can make.

Current law also sets a serving limit of 2 ounces of samples per person, per day. Senate Bill 5549 would keep that limit in place for straight alcohol, but abolish it for mixed drinks…

Read the while piece here.