THE V OICE OF AMERICA’S BEER, WINE & SPIRITS RETAILERS
ABL INSIDER VOL. 10, NO. 3 | FALL 2016
A PUBLICATION OF AMERICAN BEVERAGE LICENSEES
Making Dollars & Sense of the Economic Impact of America’s Beer, Wine & Spirits Retailers November Is Package Liquor Store Month (p. 3)
Industry Voices (p. 8-9)
2016 ABL Economic Impact Report (p. 11)
Grassroots Advocacy in Colorado (p. 12)
Legal News Updates (p. 14)
VOL. 10, NO. 3 | FALL 2016
contents 3 heritage
11 member dispatch
12 guest feature
5 where we stand
13 legal news
November Is Package Liquor Store Month
Warren Scheidt, ABL President
Mat Dinsmore, General Manager, Wilbur’s Total Beverage
James McGreevy III, President & CEO, Beer Institute
John Bodnovich, ABL Executive Director
6-7 dc update
Congress Passes CR to Fund Government; and More
DOJ’s Review of ASCAP & BMI Consent Decrees
14 guest feature
D. Tyler Burr, External Relations - Trade Marketing, R.J. Reynolds Tobacco Company
8 industry voices
15 state & industry update
9 industry voices
16 associate & affiliate members
Craig Purser, President & CEO, NBWA
Craig Wolf, President & CEO, WSWA
10 ecomomic impact
2016 ABL Economic Impact Report
industry calendar FEBRUARY 2017
Responsible Hospitality Institute Leadership Summit Austin, TX
Tavern League of Wisconsin Spring Convention & Trade Show La Crosse, WI
American Craft Spirits Association 4th Annual Distillers Convention Nashville, TN
American Distilling Institute Craft Spirits Conference Baltimore, MD
Wine & Spirits Wholesales of America 74th Annual Convention & Expo Orlando, FL
April 3-6 April 3-6
National Alcohol Beverage Control Association Legal Symposium Arlington, VA
April 30-May 1
National Beer Wholesalers Association Legislative Conference Washington, DC
ABL 15th Annual Meeting Las Vegas, NV
Night Club & Bar Convention & Trade Show Las Vegas, NV
Published by: American Beverage Licensees 5101 River Rd, Suite 108 Bethesda, MD 20816 (301) 656-1494 www.ablusa.org editor MATTHEW EVANS
ISSN# 2331-6594 (c) 2016 American Beverage Licensees. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher.
AMERICAN BEVERAGE LICENSEES
executive director JOHN BODNOVICH director, trade relations & operations SUSAN DUFFY communications manager MATTHEW EVANS
heritage Join ABL in Celebrating America’s Package Liquor Stores This November This November, ABL and licensed beverage alcohol retailers nationwide will join together to celebrate the 7th Annual Package Liquor Store Month. This celebration recognizes the hard work, dedication, and accomplishments of independent package liquor store owners from across the United States.
“They are much more than just sellers of beer, wine and spirits – they also sponsor youth athletics organizations, support various civic endeavors, and tend to be on the frontlines of their communities after natural disasters and in other times of need.”
Since 2009, ABL has encouraged cities, towns and municipalities to recognize the important and vital role that these small businesses play within their local communities. As licensed retailers – and some of the last remaining independent businesses on “Main Street” – these package liquor stores strive to fulfill their commitment to the responsible sale of beverage alcohol and training their employees to do so safely and responsibly. They are leading by example when it comes to ensuring the proper sale of agerestricted products through specialized staff training; new product education and tastings; and by ensuring they remain accountable to industry regulators, while also helping to develop and shape industry-wide regulations and policies. Beverage alcohol retailers also serve as the face of the industry within the framework of the three-tier system. They interact directly with the consumer – not only in selling products, but also through providing consumers with an education of the various items available to them. This includes knowing where and how items are produced, as well as how best to enjoy and share them responsibly with friends and family. “These local, independently owned and operated off-premise retailers serve as linchpins in their communities,” said ABL President Warren Scheidt, the owner of 12 package liquor stores across Indiana.
and dynamic role within the greater economy – both at the state and federal levels – with an overall economic impact of $87.9 billion last year. These retailers further account for more than 531,000 jobs, $33.12 billion in wages and benefits (averaging $39,800 annually), along with $6.22 billion in state taxes and $7.76 billion in federal taxes. “As consumers continue embracing new products and enjoy long-standing brands, independent package store owners provide an environment where a knowledgeable staff can educate customers on the thousands of options they have when it comes to picking the beverage that’s right for them,” noted John Bodnovich, ABL Executive Director. “Superior choice, great value and commitment to first-rate customer service make for better informed and more responsible consumers of beverage alcohol.”
Package Liquor Store Month November
With the month of November kicking off the hustle and bustle that is the holiday season, remember to take a moment and ask members of your local communities to support their local, independently owned and operated small businesses. Accordingly, ABL urges you to promote Package Store Liquor Month by encouraging the members of your communities to visit their neighborhood package liquor store to find the perfect complement to their meal, home bar, party, or holiday celebration. So this November, ABL encourages you to show your support for Package Liquor Store Month by posting a picture of your package liquor store to Facebook and/or Twitter using the hashtag #PLSMonth. |
---country, #PLSMonth --- beverage Across the off-premise alcohol retailers also play an important SPRING FALL2016 2016||ABL ABLINSIDER INSIDER
leading Annual Check-Up: Taking Stock of America’s Beer, Wine and Spirits Retailers WARREN SCHEIDT President American Beverage Licensees
our Economic Impact Y In August, ABL released its 2016 Economic Impact Study of America’s Beer, Wine & Spirits Retailers, which examined the impact of onand off-premise beverage alcohol retailers on the economy at the federal, state, and local levels. In examining the report, the data and information presented reinforced what all of us in this industry know: beverage alcohol retailers are a key component and driving force of the greater industry economic engine throughout the country.
As one of ABL’s members-only benefits, the 2016 Economic Impact Study of America’s Beer, Wine & Spirits Retailers can be accessed through our website at www.ablusa.org. The report provides a wealth of information which can be utilized in your ABL member meetings with elected officials – be they congressional representatives, state senators, or local councils. The report includes everything from the average salary and benefits of industry jobs in a state, to the number of jobs the industry supports in a given legislative district. As a members-only benefit, the report is password protected. To receive access, please contact your state association or the ABL office for your password. Maintaining Dialogue with Industry Partners In September, I was joined in Washington, DC, by a number of ABL board leaders for a series of meetings with our industry partners. These meetings continue an open dialogue with our three-tier partners. We discussed developments within the industry as a whole, concerns from the retail tier, and what we can expect from the producer and distributor tiers in the coming year. I would like to thank the following board members for taking time out of their busy schedules to join ABL staff and myself for our meetings: Phil Bradley (Kansas LBA - Lawrence, KS); Mat Dinsmore (Wilbur’s Total Beverage – Ft. Collins, CO); Tom Edwards (Fox and Hound Wine & Spirits – New Paltz, NY); Chuck Ferrar (Bay Ridge Wine & Spirits – Annapolis, MD); Bobby Greenawalt (Cigar & Fine Spirits – Auburn, AL); David Jabour (Twin Liquors – Austin, TX); and Paul Santelle (Garden State Discount Liquors - Perth Amboy, NJ). November Is Package Liquor Store Month November is National Package Liquor Store Month, and is celebrated in communities across
the country. Established by ABL in 2009, Package Liquor Store Month is an opportunity to showcase independently-owned package stores and the many benefits they provide beverage consumers. Most package stores specialize in selling beer, wine and spirits; not groceries or gasoline. That means they can focus on the latest innovations – whether those are new products from small, local producers or line-extensions from wellknown brands. By working with producers and distributors, package stores continue to provide an unmatched market entry opportunity that grows in importance in the evolving beverage alcohol industry – all while striving to meet their customer’s needs. In this season of celebration, ABL and its members encourage everyone to support locally-owned businesses by stopping in their neighborhood package store for a bottle of their favorite wine, beer or distilled spirits. You can also show your support by using the hashtag #PLSMonth or by visiting our website to download Package Liquor Store Month infographics to be displayed in your places of businesses. Down the Pike Following up on our successful 2016 Annual Meeting in Denver, I am pleased to announce that we will be returning to Las Vegas for ABL’s 15th Annual Meeting – which will take place March 26-28, 2017 at the Monte Carlo Resort & Casino. The meeting will be held concurrently with the 2017 Nightclub & Bar Show. Staff is currently working with the Annual Meeting Committee to develop programming and scheduling, and will be sending out information regarding registration, speakers, sessions, etc., in the coming months - so be sure to check the website, Facebook, and Twitter regularly for the latest information. |
where we stand This Repeal Day, Celebrate Our Successful American Alcohol Marketplace n December 5, thousands of beverage O licensees will observe the 83rd Anniversary of Repeal Day – the only holiday celebrating an JOHN BODNOVICH Executive Director American Beverage Licensees
THE 21ST AMENDMENT (Ratified December 5, 1933)
SECTION 1. The eighteenth article of amendment to the Constitution of the United States is hereby repealed. SECTION 2. The transportation or importation into any State, Territory, or possession of the United States for delivery or use there in of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.
PROHIBITION TIMELINE February 13th, 1826
American Temperance Society Is Founded
December 18th, 1895
National Anti-Saloon League Is Founded
June 27th, 1919
Bill Introduced in the House by Andrew Volstead (R-MN)
October 28th, 1919
President Wilson Vetoes the Volstead Act
October 28th, 1919
Volstead Act Passed by the House
October 29th, 1919
Volstead Act Passed by the Senate
January 16th, 1920
Volstead Act Goes into Effect
April 7th, 1933
President Roosevelt Legalizes <3.2% Beer
November 14, 1933
Florida Ratifies 21st Amendment
December 5th, 1933
21st Amendment Ends Prohibition
Amendment to our Constitution. On December 5, 1933, lawmakers ratified the 21st Amendment – effectively repealing the 18th Amendment (thereby removing the prohibition against the sale, possession, and consumption of alcohol), AND giving states the right to determine their own regulations for how alcohol is sold within their borders. President Franklin D. Roosevelt remarked that “this return of individual freedom shall not be accompanied by the repugnant conditions that obtained prior to the adoption of the Eighteenth Amendment and those that have existed since its adoption.” He also appealed to the people to obey law and order, and only purchase alcohol from “duly licensed agencies”. This served two purposes: to ensure the safety of the product, and to help break-up the illicit underground liquor trafficking that had taken place for 13 years. Today, retail beverage establishments – be they on-premise taverns, bars and restaurants, or offpremise package liquor stores – are primarily licensed by state licensing agencies and operate as part of a three-tier system of suppliers, distributors and retailers that has evolved uniquely in each state since the ratification of the 21st amendment. For more than eighty years, the three-tier system has served United States consumers well by assuring responsible beverage alcohol commerce and an unparalleled beverage alcohol marketplace built on competition amongst producers, wholesalers and retailers. The system provides a means for the orderly marketing, tax collection and tracking of beverage alcohol products. The three-tier system has also been validated by the Supreme Court, which in 2005 confirmed the right of states to regulate the sale and distribution of adult beverages within their borders, validating the three-tier system as “unquestionably legitimate.” The three-tier regulatory system has helped produce billions of dollars in revenue for states and municipalities; allowed state and local governments to adapt laws and policies that best reflect the values of their citizens; and introduced millions of consumers of legal drinking age to beer, wine and spirits from different regions of the country and every corner of the world.
Perhaps most importantly, it has prevented the United States from reverting to a “tied-house” beverage alcohol system, wherein retailers are controlled by a single beverage alcohol producer, and which led, in part, to Prohibition. In the United States today, there is great pressure on traditional licensed retail alcohol businesses to succeed with modest margins, regulatory obligations, the challenges of operating a brickand-mortar business and a highly-competitive marketplace. Independent beverage retailers thrive on healthy and fair competition, which in most states is made possible by a well-manicured and level playing field that allows local small businesses to compete. Sensible state regulations have allowed prices to remain competitive, but most significantly, they have provided consumers with an unparalleled choice of beer, wine and spirits products from around the corner and around the globe. So why is it important to keep in mind the lessons of Prohibition when you hoist a glass or throw a party to celebrate Repeal Day? The responsible and socially accepted enjoyment of beer, wine and spirits is a hallmark of our American culture, bringing together Millennials and Baby Boomers – and perhaps even Hillary Clinton and Donald Trump supporters (well, one can hope at least). Enjoying a glass of wine with lunch, a beer at a BBQ or cocktail at happy hour are activities that most Americans can relate to and enjoy, and it’s incumbent on our industry to support those traditions through responsible and first-in-class service. As technological innovation and industry consolidation becomes more prevalent, it is also important to remember why we ended up with Prohibition in the first place. A well-defined three-tier system puts in place checks-andbalances to make sure that vertical integration and tied-house prospects don’t overrun and ruin the beverage alcohol marketplace for all those in it and for the consumers it serves. This December 5, let your customers and patrons know why you are smiling and tell them a little bit about what a wonderful 83 years it’s been! |
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dc update Capitol Hill Takes Notice of ABL Opposition to Estate Tax Rules | Congress Passes Continuing Resolution to Fund Government | Marijuana State Ballot Initiatives ongress Passes Continuing C Resolution to Fund Government Until December 9th
Congress, with one foot out the door to the campaign trail, passed a Continuing Resolution (CR) on September 28 to keep the government running until December 9, 2016. Final negotiations on the CR were delayed over a dispute on funding for the water crisis in Flint, Michigan. Though government funding is set for the next ten weeks, a full calendar awaits legislators when they return from the November elections. In addition to passing an omnibus spending bill (or smaller “mini-bus” spending bills), a variety of legislative issues including biomedical measures, defense authorization, campaign finance fights and a Supreme Court nomination will be on the docket. Congress is scheduled to be in session from November 14 to December 16, giving the body just four weeks to tackle many important issues. ABL Opposes Changes to Estate Tax Rules; Capitol Hill Taking Notice Joining with two different, broad-based coalitions representing family business interests, ABL has voiced its concern about proposed Treasury regulations that would force even more family businesses to grapple with the complicated and costly estate tax. ABL was one of 115 groups to sign on to a Family Business Coalition letter to Treasury Secretary Jacob Lew and leaders in the House and Senate on September 22, opposing “the Department of Treasury’s proposed changes to Section 2704 on estate and gift tax valuation discounts.” These new rules “would significantly change family businesses’ succession plans and make it harder for family owned businesses to transition to the next generation by removing legitimate valuation discounts for estate, gift, and generation skipping taxes which businesses have used for the past two decades in order to prevent the IRS from overvaluing their businesses at death.”
In a separate Family Business Estate Tax Coalition letter to the Treasury Department and Capitol Hill on September 28, ABL joined 3,847 businesses and organizations representing family-owned businesses in calling for the 2704 valuation regulations to be withdrawn. On the legislative front, Rep. Warren Davidson (R-OH) has introduced H.R. 6100 the Protect Family Farms and Businesses Act, which would block the proposed rules. “Instead of undermining this essential part of our economy in his lame-duck presidency power grab, President Obama should be working with Congress to strengthen it,” Davidson said in a statement. The bill has already gained the support of 60 co-sponsors, including members of the Ways and Means Committee and House Leadership. Senator Marco Rubio (R-FL) has offered a companion bill, S. 3436, to Rep. Davidson’s legislation. Also in the Senate, Sen. John Thune (R-SD) and 40 other Senators sent a letter to Secretary Lew, asking that the proposed 2704 valuation regulations “not be finalized in their current form as they directly contradict long-standing legal precedent, create new uncertainty for taxpayers, and put family-owned businesses at a disadvantage relative to other types of businesses.” For those who wish to comment on the proposed estate tax rules changes, the Treasury estate tax regulations comment period ends November 2nd. Visit www.NoEstateTaxHike.org to offer comments. House Committee Passes Bill with Swipe Fee Repeal; Seen as Blueprint for 115th Congress On September 13, the House Financial Services Committee (HFSC) passed the Financial CHOICE Act (H.R. 5983). The legislation, introduced by HFSC Chairman Jeb Hensarling (R-TX), is a sweeping financial regulatory reform bill that would undo most of the DoddFrank legislation from 2010. Included in the bill is a provision (Sec. 335)
that would repeal debit card swipe fee reforms – commonly referred to as the “Durbin Amendment.” This latest iteration of the swipe fee battle began on June 13, when Rep. Randy Neugebauer (R-TX), Chairman of the Subcommittee on Financial Institutions and Consumer Credit, introduced H.R. 5465, a standalone bill that would repeal debit card swipe fee reforms. Ten days later, on June 23, Chairman Hensarling released a draft of the Financial CHOICE Act, which contained similar language. Over the last three months, ABL has urged members of the House Financial Services Committee to vote “NO” on the bill. Prior to the committee vote, ABL sent a “legislative alert” to Capitol Hill reminding them how opposed beverage retailers are to repealing debit card swipe fee reforms. ABL has also been working with fellow members of the Merchants Payments Coalition to share information and coordinate efforts. While the Financial CHOICE Act is unlikely to make it the House floor this year, much less be taken up by the Senate, it represents an effort to frame the financial reform debate over the next two years. House Passes Overtime Rules Delay Bill; ABL Supports Delay of Implementation On September 28, the House passed H.R. 6094, a bill sponsored by Rep. Tim Walberg (R-MI) that would delay implementation of the Department of Labor’s overtime rule for six months. With five Democrats supporting the measure, it passed 246-177. It should be noted that no Senate action on the legislation will take place until after the November elections, as the upper chamber adjourned before the House bill passed. The final overtime rule, announced by the Department of Labor in May, raises the threshold for employees who are exempt from overtime pay to $47,476 – more than double the current
dc update salary threshold of $23,660. Many small businesses, not-for-profits and trade associations representing both conservative and liberal interests alike, have expressed concern that the rule could have unintended consequences that would harm employers and affected employees alike. Should Congress not act, the new overtime rule will take effect on December 1, 2016. ABL supports a bill introduced by Rep. Kurt Schrader (D-OR), the Overtime Reform and Enhancement Act (OREA) (H.R. 5813), which would incrementally phase in the new salary threshold over the next three years to give businesses adequate time to adjust to the new standard, while also ensuring workers are fairly compensated. The bill would also eliminate a provision in the final overtime rule that allows for automatic updates to the salary threshold every three years. Senate Republicans have also started offering alternatives. Sen. Lamar Alexander (R-TN) has introduced a bill similar to Rep. Schrader’s that would incrementally implement the Labor Department rule over five years, starting with an increase to $35,984 on January 1, 2017. Both Rep. Schrader’s and Sen. Alexander’s bills would eliminate the automatic update to the limit every three years. Sen. James Lankford (ROK) has his own legislation that would delay the increase until June 1, 2017, and would delay the rule for two years in states – including Louisiana – that have experienced major disaster declarations since August 14. Kentucky, Maryland and Florida would also be affected by the Vitter bill. Marketplace Fairness Draft Legislation Introduced by House Judiciary Committee Chair House Judiciary Committee Chairman Bob Goodlatte (R-VA) has introduced draft legislation aimed at shielding businesses from demands by multiple states to collect sales taxes on interstate online transactions. It has received support from online retailers, as they would only have to deal with homestate tax collectors and auditors. The Marketplace Fairness Coalition responded to the draft by saying: “The Marketplace Fairness Coalition is pleased to see engagement in the legislative process on an important issue for America’s communities. We look forward to reviewing the bill details and working with Congress to pass the right federal solution to modernize state sales tax collection as soon as possible.” Senate legislation addressing e-fairness has failed to gain traction.
Alcohol Industry Suppliers Support Tax Bill With 51 co-sponsors in the Senate and 284 co-sponsors in the House, alcohol industry supplier trade associations are urging Congress to act later this fall to pass the Craft Beverage Modernization and Tax Reform Act (H.R. 2903 & S. 1562), which would overhaul federal excise taxes on beer, wine and distilled spirits. Sen. Ron Wyden (D-OR) and Rep. Erik Paulsen (R-MN) are leading the push on Capitol Hill to revamp the excise taxes charged on alcoholic beverages and expand incentives for small breweries, distilleries and wineries. The unified support of brewers, distillers and winemakers – as well as bipartisan majorities in both chambers – gives the legislation a real chance of passing this year. Most notably, the legislation would: Reduce the tax on the first 60,000 barrels of beer from $7 to $3.50 per barrel. The excise tax would go down from $18 to $16 per barrel for any production up to 2 million barrels. Reduce the tax on the first 6 million barrels brewed from $18 to $16 per barrel for brewers who make more than 2 million barrels annually. Replace the current 90 cents per gallon tax credit for wineries that produce less than 250,000 gallons of wine, which is now applied only to the first 100,000 gallons of production. Wine is currently taxed between $1.07 and $3.40 per gallon. Provide a new $1 per gallon tax credit on the first 30,000 gallons of wine by any winery regardless of size. Some wineries would be able to claim a 90 cents per gallon credit on the next 100,000 gallons. Reduce the tax rate from $13.50 to $2.70 on the first 100,000 proof gallons of distilled spirits production. Reduce the tax rate from $13.50 to $13.34 on the next 22.1 million proof gallons of production. Provide a tax credit of 5.6 cents per gallon to hard cider makers on the first 30,000 gallons produced and 6.5 cents on the next 100,000 gallons. Cider is currently taxed at 22.6 cents per gallon.
language that would amend the Federal Alcohol Administration Act to prohibit the manufacture, sale, distribution, or possession of powdered alcohol. Marijuana – State Ballot Initiatives Voters in Arizona, California, Maine, Massachusetts and Nevada will vote on legalizing recreational marijuana in November 2016. Arizona Proposition 205: Would allow adults to carry up to an ounce, grow up to six plants, and consume marijuana in non-public spaces. Retail marijuana sales would have a 15 percent tax imposed. California Proposition 64: Would allow adults 21 years of age and older to possess an ounce of cannabis, purchase dried flower and cannabis products from licensed retailers, and grow up to six plants for personal use. The initial taxes imposed would be a 15 percent state excise tax on retail sales, and cultivation taxes of $9.25 per ounce of flower and $2.75 per ounce of trim/leaves. Maine Question 1: Would legalize the recreational use of marijuana for people 21 years of age and older, which would also allow an adult to grow up to six plants. The proposal includes a 10 percent sales tax on retail marijuana and marijuana products. Massachusetts Question 4: Would allow adults 21 and older to possess up to an ounce of marijuana, keep up to 10 ounces of at home, and grow up to six plants. Marijuana sold in licensed shops would be subject to an excise tax of 3.75 percent in addition to Massachusetts’ 6.25 percent state sales tax. The initiative allows for the creation of a 15-member cannabis advisory board to study and make recommendations on regulations and marijuana products. Nevada Question 2: Would make it legal for adults age 21 and older to buy marijuana for recreational use, possess up to an ounce, and grow up to six plants at home — if that residence is more than 25 miles away from a licensed dispensary. Retail marijuana would be subject to a 15 percent excise tax. Cannabis consumption would be restricted to private premises, which could include a retail marijuana store. |
STOP Underage Drinking Act Subject of Congressional Hearing A bill (H.R. 1717) to reauthorize the Stop Underage Drinking Act was the subject of a hearing by the Health Subcommittee of the House Energy and Commerce Committee hearing on September 8. The bill, which has 104 co-sponsors, is being heavily lobbied by the Community AntiDrug Coalitions of America (CADCA), a representative of which testified at the hearing. While the hearing was part of an effort to build goodwill for the bill, a major obstacle looms in the Senate where its companion bill (S. 728) includes
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industry voices Independent Distributors and Retailers: Finding Opportunity Amid Change and Challenges
isruption is the new normal in today’s world – from global and homeland security to the world economy, politics and new technologies. And it’s safe to say that the beer industry is seeing its fair share of disruption, too.
CRAIG PURSER President & CEO National Beer Wholesalers Association (NBWA)
“In short, the establishment is scooping up the disrupters. But, most of the recentlypurchased craft breweries in the U.S. come with retail licenses.”
With disruption comes challenges. So-called disruptors start to behave like marketplace leaders. Some smaller-scale beer brands have become dominant in their segment and worked to limit competition from even smaller and newer brands. Disruptors have become acquisition targets of larger, more established players. Recent craft brewer deals, such as the sale of Ballast Point for $1 billion, have sent valuation shockwaves throughout the industry. Finally, establishment players and industry giants have begun to disrupt their own markets. Brick-andmortar retail giants Walmart and Staples are now among the top five online retailers. And in beer, the largest suppliers continue to aggressively purchase smaller brewers. In short, the establishment is scooping up the disrupters. But, most of the recently-purchased craft breweries in the U.S. come with retail licenses. It’s important to remember that threetier exemptions, like retail privileges, are intended to help generate more competition and help start-up businesses – not to reduce market access or help global brewers sell outside of the system. And the expansion of retail privileges to brewers continues to disrupt on-premise bars, restaurants and taverns. These developments are especially significant given that establishment players are attempting to disrupt markets by consolidating with each other. At $108 billion, the Anheuser-Busch InBev (ABI) acquisition of SABMiller is the most significant example. Last year, when news of the merger broke, we wondered what it would mean for independent distributors and retailers. After all, this news came on the heels of ABI purchasing more independent distributors and buying even more craft breweries. But, with challenges and changes comes opportunity. The ABI/SABMiller merger gave NBWA a new platform on which to advocate. During congressional review and throughout the Department of Justice’s exhaustive review of the industry, NBWA worked to ensure that distributor independence is maintained, that marketplace
competition is sustained and consumer choice is preserved. NBWA used the opportunity to tell the great story of America’s beer distributors and the independent distribution system – a system that’s generating a Golden Age for beer. Unprecedented variety, offered by more than 4,000 breweries – compared to less than 50 back in the ’80s. Craft brewers continue to grow, representing more than 10 percent of the overall beer market in the U.S. And imports continue to explode, offering tastes and experiences from all over the world. The winner in all of this is the American consumer, who enjoys an incredibly broad spectrum of beer. And this consumer choice is possible because of a robust and competitive system of independent distribution and retail. The system provides access to market and a competitive playing field for brewers of all sizes; and it is driven by consumer choice. All very important factors for the Department of Justice. The DOJ’s proposed final order said: The settlement preserves the ability of smaller brewers to compete… by protecting their access to important distribution networks. And independent distributors ... will have the freedom to sell and promote the variety of beers that many Americans drink. Brewers, distributors and retailers alike can agree that statement is a very strong endorsement of the independent distribution system. That’s why independent beer distributors and retailers must work together to highlight the value of this great system that delivers incredible variety of beers to retailers, providing consumers with tremendous choice and selection. Working together, we will continue to identify a wide range of opportunity in a sea of change and challenge to grow this great industry. |
industry voices Defining Shared Success ndependent tavern owners, retailers and Ifacing wholesalers share many concerns about issues the country and our industry. We share these concerns because our members are partners in business and because both ABL and WSWA are comprised of family-owned companies.
CRAIG WOLF President & CEO Wine & Spirits Wholesalers of America (WSWA)
“Addressing these issues will depend upon on our strength as individual organizations and on increased cooperation and partnership on behalf of our familyowned members.”
As the WSWA team recently reported to the ABL Board of Directors and staff leadership, there are a number of pressing issues that will impact ABL members and WSWA members alike. Tackling them will require coordinated action from our individual organizations. I’d like to update you on how we view certain key issues, and what we’re doing to address them. Marijuana legalization is here to stay. Four states have already legalized recreational marijuana; five more have ballot initiatives this year; four more have medical marijuana initiatives this year on top of the two dozen states where medical marijuana is already legal. While WSWA is neutral on the core question of legalization, we believe that if legalized, marijuana should be regulated similarly to alcohol. To that end, we are working at the state and federal levels to share our expertise and offer guidance to help Congress, governors and law enforcement officials address potential negative impacts from legalization. Part of the problem is that every state that legalizes marijuana is doing so in a slightly different manner. Therefore, we must work to ultimately ensure that the beverage alcohol and marijuana markets are not structured in ways that put alcohol at a competitive disadvantage – while at the same time ensuring public safety and social responsibility protections. Market privatization is another issue facing voters and legislators. An Oregon ballot initiative that would privatize the market was proposed this year – though it was ultimately withdrawn by its authors. We fully expect that this coalition will make another attempt in the near future. Since the Washington state market was privatized in 2011, we have seen a negative impact on consumer behavior (with some crossing borders to buy cheaper products in neighboring states) as well as an increase in thefts, and increased risks of underage access. None of this benefits wholesalers and retailers. WSWA continues to raise significant concerns about efforts in other states that may follow this model. Back in the nation’s capital, there is a push from the Obama Administration, some in Congress, and the Clinton campaign to dramatically increase the tax penalties paid when transferring assets to the next generation. Should this occur, our family-owned members will face Estate Tax consequences not borne by publicly-traded suppliers and retailers.
To address these concerns, WSWA is engaged on a number of fronts: Through the Congressional Hospitality Caucus, a bipartisan organization that hosts events and policy briefings, we collectively share industry’s positive story with elected officials and their staff. This coalition is actively supported by ABL, The Presidents Forum of the Distilled Spirits Industry and WSWA working in true partnership. WSWA also works to pool the support of some 2,000-plus wholesaler employees. Our PAC raises and contributes approximately $2 million to federal candidates over the course of each two-year election cycle. The WSWA-PAC supports candidates regardless of party – based solely on their support for issues important to wholesalers and the protection of the three-tier system. WSWA staff and member company employees also conduct tastings and educational events to educate candidates and officeholders about the brand building and local marketing expertise of wholesaler employees – putting a face on our industry and illustrating how political and policy decisions impact their constituents. Each year, we host a “Fly-In” that brings dozens of owners and senior managers to Washington, D.C., to meet face-to-face with their representatives, briefing them on issues of concern to hometown businesses and employees. Similarly, our warehouse tour program helps teach officials about the role wholesalers and their employees play building brands and serving retailers. In January, some 50 newly-elected members of the House of Representatives and U.S. Senate will take office. Most, if not all, of these newly-elected officials will require an intensive education on the value, benefits and importance of the three-tier system and its component parts: suppliers, wholesalers and retailers. If we do not educate these elected officials, they could form negative opinions of our industry based on other outside influences. Addressing these issues – and others looming on the horizon – will depend upon our strength as individual organizations and on increased cooperation and partnership on behalf of our family-owned members. I’m emboldened by our past record of success and focused on the success we can achieve, together, in the days ahead. |
FALL2016 2016||ABL ABL INSIDER INSIDER SPRING
economic impact Updated Economic Study Reflects Positive Impact of Beverage Licensees BL recently released an updated A economic impact study detailing the positive effect that America’s beer, wine and spirits retailers have on local, state and national economies through job creation, good wages and direct economic contribution.
Providing a detailed and in-depth look at the role that beverage licensees play in the U.S. economy at the local, state and national levels, the 2016 Economic Impact Study of America’s Beer, Wine & Spirits Retailers notes these licensees generate in excess of 1.94 million jobs from direct retail alcohol sales. The total economic impact of America’s beer, wine and spirits retail industry is more than $295 billion. “We look forward to sharing this updated report first and foremost with our members – but also with the beverage alcohol industry and those making decisions directly impacting beverage licensees,” noted ABL Executive Director John Bodnovich. “This quantifiable data supports what our members, and beverage licensees as a whole, already know to be true: they are responsible for providing their communities with hundreds of thousands of jobs and millions of dollars in tax revenues at the local and state level – and billions at the federal level.” The 2016 Economic Impact Study of America’s Beer, Wine & Spirits Retailers indicates that while wages have remained relatively unchanged since 2014, the number of jobs supported – and tax revenues contributed – by beverage licensees has increased significantly during this period. The results reflect an industry and marketplace which continues to grow, providing consumers with an ever-increasing range of beer, wine and spirits products than ever before. “Beverage licensees and their businesses – be it on-premise or off-premise establishments – play a dynamic role in the larger economic portrait of this country,” noted John Dunham, President of John Dunham & Associates which conducted the economic research. “As reflected in the report, these businesses generate billions in tax revenues at the local, state and federal levels, and create millions of jobs throughout the larger economy.”
The biennial report – which updates the 2014 Economic Impact Study of America’s Beer, Wine & Spirits Retailers – was conducted by economic research firm John Dunham & Associates on behalf of ABL and its members. All jobs in on-premise full-service restaurants and drinking places, as well as all jobs in offpremise package stores, are included as these businesses depend on the sale of alcohol for a substantial portion of their revenues and profits. In all other locations, this analysis examines on- and off- premise retail alcohol beverage sales accounting for full time and equivalent jobs related solely to the sale of alcohol.
Key Findings $295.4 Billion
Total economic activity the beverage alcohol retail industry is responsible for annually
Federal taxes paid by the beverage alcohol retail industry last year*
Number of jobs direct retail alcohol sales account for in the U.S.
Number of additional jobs supported by the beverage alcohol retail industry in the U.S.
Study Expanded to Capture Full Impact of Businesses The 2016 report also provides a much broader picture of the impact of licensed establishments, many of which sell other products in addition to beverage alcohol. Alcohol sales and non-alcohol sales from licensed restaurants, drinking places and package stores create 1.94 million jobs and over $113 billion in direct economic impact. An interactive website provides users with the option of generating tailored reports based on all sales by on-premise, full-service restaurants and drinking places as well as off-premise package stores at the national, state, and local levels. An Advocacy Tool for ABL Members ABL members have access to the 2016 Economic Impact Study of America’s Beer, Wine & Spirits Retailers and are able to generate tailored reports and download data via the ABL website, www.ablusa. org. These reports and talking points can be broken out at the national, state, congressional district, and state legislative district levels, providing ABL members the ability to quantify the significant contributions they make to their communities when it comes to jobs, taxes and economic impact. “While ABL is primarily focused on legislative issues at the national level, we are supportive of our members as they fight against policies adversely effecting independent business owners, and further support their efforts to advocate for commonsense state alcohol laws and regulations,” noted Bodnovich. “It is our hope that this report and its findings will aid them in these efforts.” The 2016 Economic Impact Study of America’s Beer, Wine & Spirits Retailers is an ABL membership benefit, hosted on an interactive section of the ABL website. The study can be sorted nationally, by state, by congressional district and by state legislative district. To access the study, members can contact the ABL office by emailing firstname.lastname@example.org. |
*Figure includes on- and off-premise retailer, supplier and induced taxes
FALL 2016 | ABL INSIDER
member dispatch Make Sure You Have a Seat at the Table!
lmost five months after Senate Bill 197 (S.B. 197) passed out of the state legislature in Colorado, I’m reminded of what the new liquor laws could have looked like if “retailers” were not at the table.
MAT DINSMORE General Manager Wilbur’s Total Beverage Fort Collins, CO
“If you want your voice to be heard, you must make sure that you have a seat at the table!”
For those of you who are not familiar with S.B. 197, it fundamentally changes the ways in which beverage alcohol will be sold in Colorado over the next 20 years. The new law allows grocers the opportunity to possess up to 20 wine, liquor and beer licenses until 2037 (basically, five new licenses every five years), at which point they will be able to expand to as many stores as they would like. In order to get these new locations, grocers must clear out a 1,500-foot radius of any current liquor stores, and purchase a minimum of two liquor stores within their community (along with about one hundred other smaller details). This new law also allows current Colorado liquor stores the opportunity to expand, permitting them to hold up to four licenses over the next decade. These additional licenses will be a “phased in,” allowing for the market to adjust gradually, while also allowing current retailers to sell out, close-up shop, stay the same, or expand as they see fit. As with any legislation, there are going to be many “winners and losers,” but it basically laid out a twenty-year road map of what the industry in Colorado will ultimately look like, without pulling the rug out from underneath retailers, as a ballot imitative would have done. As many of you read this article, you might be facing similar pressures and/or situations depending on what state you’re currently doing business in. As we all know, each state has their own unique - and sometimes quirky - liquor laws, but one thing’s for sure no matter where you operate: If you want your voice to be heard, you must make sure that you have a seat at the table! This table might be with your local organization (for me, it’s the Colorado Licensed Beverage Association), at the county level, or possibly with ABL in Washington, DC at the national level.
from all of them before your fight begins. These relationships must be constantly evolving, and nurtured as our industry grows and changes. This effort must also have leadership, and people who are willing and able to bring our industry together. This is where having a seat at the table is most important. Whether it is the legalization of marijuana, liquor law changes, or other industry issues, I challenge each and every one of you who is reading this to GET INVOLVED, otherwise you might wake up one day and realize that it is too late! To those of you in Colorado, who worked tirelessly over the past two years (you know who you are, and I don’t want to forget anyone by name), thank you for your tireless work, commitment and leadership you have given to our great industry! Mat Dinsmore is the General Manager of Wilbur’s Total Beverage in Fort Collins, Colorado. His foray into the beverage retail business can be credited to his father, Dennis Dinsmore, who previously worked in the liquor retail industry as well as for Diageo. Back when Mat was still in school, the Dinsmore father and son team often talked about starting a liquor business together – and their idea came to fruition in 2002, when Dennis and a business partner invited Mat to buy into the business. Upon Dennis’ retirement in 2014, Mat has been at the helm of Wilbur’s Total Beverage. In addition to his commitment to offering customers a diverse product selection, Mat is also committed to philanthropy within his community, working with an average of 1,000 different charities per year. Not only have these charitable projects helped Dinsmore make many strong business partnerships across the area, but he also abides by the principle that giving back is simply the right thing to do. He wants his business to help others as much as it can. |
Let’s face it: independent retailers are under immense pressure nationwide, and without friends at your local and state levels, proper political and legal representation, and a war chest that has some money in it, there is no way to make sure your wants and needs are met. To get the items listed above, you have to get a buy-in from small, medium and large retailers across your state, and monetary contributions
SPRING 2016 | ABL INSIDER
guest feature Brewers’ Voluntary Disclosure Initiative: A Positive Step in Educating Consumers
C JAMES McGREEVY III President & CEO Beer Institute
onsumers are increasingly interested about the food and beverages they eat and drink. Beer is no different. In fact, a recent survey conducted by the Harris Poll® on behalf of Nielsen found that 72% of beer drinkers think it’s important to read nutritional labels when buying food and beverages.
I am proud of the leadership these brewers and beer importers are demonstrating by participating in the Brewers’ Voluntary Disclosure Initiative. They are the first in the beverage alcohol industry to voluntarily provide consumers with this information in an organized fashion.
It was with an eye towards our consumers that the Beer Institute announced in July the Brewers’ Voluntary Disclosure Initiative that encourages our member companies to display specific consumer information on products, packaging or websites. This initiative is an important new approach by which beer companies will voluntarily include a serving facts statement on their products, as well as disclose ingredients on either the label or secondary packaging via a list of ingredients, a reference to a website with the information or through a QR code. In addition to meeting consumer demand, the Brewers’ Voluntary Disclosure Initiative will also be helpful to restaurants as they comply with menu labeling requirements set to go to into effect in May 2017.
I know how diverse the beer industry is, and the Beer Institute represents both large and small brewers. I have traveled to these breweries across the country, and I know that no two brewers, breweries, importers or beers are alike. These differences were taken into account when designing and rolling out this initiative to member companies, which is why participating brewers and importers are being encouraged to achieve compliance across their product lines by the end of 2020.
Participating brewers and importers will voluntarily list calories, carbohydrates, protein, fat and alcohol by volume on their beer products by including a serving facts statement consistent with the Alcohol and Tobacco Tax Trade Bureau (TTB) ruling 2013-2. In addition, they will provide freshness dating and disclose ingredients via a list, a reference to a website with the information, or a QR code on the label or secondary packaging. Beer Institute member companies, including industry leaders such as Anheuser-Busch, MillerCoors, Heineken USA, Constellation Brands Beer Division, North American Breweries and Craft Brew Alliance have agreed to put this information on all their products. These companies together produce more than 81% of the volume of beer sold in the United States. Serving Facts: Serving size: 12 fl oz (355ml); 1 serving/container. Per Serving: 4.2% ALC./VOL.; Cal: 96; Carbs: 3.2g; Fat: 0g; Protein: <1g
The Brewers’ Voluntary Disclosure Initiative has been positively covered in the media and warmly received by consumer groups. The initiative has been featured in over 1300 news media outlets, including The Today Show, Politico, The Wall Street Journal, The St. Louis Post Dispatch, and Fortune. The National Consumers League applauded the initiative as “a milestone,” and the Center for Science in the Public Interest said the initiative “is quite significant.” When companies voluntarily act on behalf of their customers, the media, policy makers, and advocates take notice. Brewmasters have spent centuries perfecting different kinds of beer. The result of this work is America’s most popular alcohol beverage, and brewers and importers who are participating believe it is critically important to keep consumers informed. Beer has never been more dynamic in the United States, with over 4,000 active breweries in operation today. The Brewers’ Voluntary Disclosure Initiative will only draw on this innovation by better informing our customers about the beer they enjoy. |
legal news Music Licensing News: Department of Justice Concludes Review of ASCAP & BMI Consent Decrees
n August 4, the Department of Justice Antitrust Division (DOJ) completed its review of the consent decrees that govern performing rights organizations ASCAP and BMI. The DOJ determined that no modifications to the consent decrees are warranted at this time. In a press release, the DOJ noted that “the department’s Antitrust Division also confirmed that the consent decrees require each organization to offer ‘full-work’ licenses that convey to radio stations, television stations, bars, restaurants, digital music services, and other music users the right to publicly perform, without risk of copyright infringement, all works in ASCAP’s and BMI’s repertories.” ASCAP and BMI requested the review in 2014, seeking to loosen the consent decrees. ABL, along with a variety of other music licensing stakeholders, provided comments to the DOJ during the review process. With its report, the DOJ has made it clear that the consent decrees are as important and relevant as they were when they were implemented. The DOJ also confirmed that “blanket licenses” cover all songs in a PRO’s catalogue, regardless of whether they have multiple songwriters that belong to different PROs. ABL issued the following statement regarding the Department of Justice Antitrust Division’s review: “Beverage licensees are pleased that the Department of Justice (DOJ), following an exhaustive multi-year review, has arrived at a commonsense conclusion to keep in place the consent decrees that are designed to prevent additional antitrust violations by ASCAP and BMI. It is clear that DOJ has given this issue the utmost consideration and ABL thanks the DOJ staff for their hard work and attention to this important matter. “ABL also welcomes DOJ’s confirmation of ‘full-work’ licensing, which means that the blanket licenses offered by Performing Rights Organization’s (PRO’s) provide licensees with the right to use all the works in that PRO’s repertoire without risk of copyright infringement. This reaffirms what licensees have long understood based on the contracts they have entered into with ASCAP and BMI.
“The DOJ review will help beverage licensees better understand how the music marketplace is supposed to work. Tens of thousands of bars, taverns and other hospitality businesses seek to make informed business decisions about music licensing, just as they do in all other aspects of their business. They know that fairness and transparency will lead to a music ecosystem that benefits consumers, venues and artists.”
The MIC Coalition, a group of music users including broadcasters, venues and streaming services, of which ABL is a member, also issued a statement which read: “The MIC Coalition applauds the Department of Justice Antitrust Division for completing a thorough, multi-year review of the longstanding voluntary consent decrees governing ASCAP and BMI after consideration of extensive input from music publishers, music users and the PROs themselves. “The decision to maintain current protections against anti-competitive behavior ensures that even though ASCAP and BMI control more than 90% of the U.S. music marketplace, music licensees can continue to access music under a system that fairly compensates music creators for their work.
Blanket Licenses & “Fractional Licensing” Music users typically purchase a “blanket license” from a PRO, which covers all of the songs registered with that PRO. PRO documentation and contracts make clear that blanket licenses provide the right to play musical works as a ‘whole’, and do not limit those who purchase such a license to ‘fractional’ interest in songs. In its review, the DOJ considered and chose not to adopt a new policy providing for “fractional licensing”. Under the current consent decrees, a licensee needs only to obtain a license from one copyright holder in order to perform a work. For a song with multiple copyright holders, anyone with a license from any PRO representing a song’s songwriter can play the song publicly. The DOJ correctly determined that “fractional licensing” requiring licensees to obtain separate permission from each and every copyright holder individually before being permitted to perform a song would create gridlock in the music industry, increase complexity for small and mediumsized businesses and drive up costs for musical performance, ultimately hurting music lovers and creative artists alike.
“DOJ is absolutely correct in clarifying that music users who purchase ASCAP and BMI blanket licenses unambiguously obtain the unlimited right to play the songs in these organizations’ repertoires. ASCAP and BMI’s own contracts and public representations of their licenses make clear that this is and always has been standard operating procedure. Deviating from this widely accepted practice would significantly harm consumers, services, venues and songwriters. “ASCAP and BMI’s massive market power remains as real a threat to a fair and competition-driven music marketplace as it has ever been. DOJ’s decision to maintain the current protections of the consent decrees appropriately serves as a check against antitrust violations that would create unworkable cost and complexity for those looking to play music publicly.” What happens next? BMI has already filed a lawsuit challenging the findings of the DOJ. ASCAP has publicly vowed to aggressively lobby Congress for relief from the ruling and what they see as the issue of orphaned works, which exist when multiple songwriters can’t reach a licensing agreement. Despite the DOJ giving the PROs one-year to comply with what is already existing law, it appears that this issue is not going anywhere soon. |
FALL2016 2016|| ABL INSIDER SPRING
guest feature Building a Relationship with Elected Officials and Sharing Your Voice on Issues That Affect Your Business Can Make a Difference ith ABL focusing primarily W on issues at the federal level, political engagement by on- and off-premise beverage alcohol retailers should look to extend to the state and local levels – where regulations remain impactful, and where your legislators also need to have a clear understanding of the retail industry’s platform.
D. TYLER BURR External Relations Trade Marketing R.J. Reynolds Tobacco Company
It’s paramount for the elected officials of your community to understand what issues are important to you. They see so many points of view, so it’s critical that they understand your side of things.
Rather than a PR appeal, this is an appeal for both education and information. “Elected officials care about their constituents and welcome their input on the issues important to their business,” said Allen Joines, the Mayor of Winston-Salem since 2001. “This communication helps make government more efficient and effective in serving the community.” Groups pushing for tobacco restrictions have now taken their fight to the city and county levels, where the number of proposed ordinances that could hinder retailing operations has skyrocketed. Need proof ? Just six years ago, there were about a dozen proposals introduced at the local level related to tobacco products and retail licensing requirements. In 2015 alone, the number of local proposals has soared to more than 400. But the good news can be found in the successful campaigns across the country where these bad ideas have been defeated – or at least mitigated – through the involvement of local retailers. To facilitate connections between industry retailers and their elected officials, R.J. Reynolds Tobacco Company worked to develop a simple, yet effective, seven-step process for political engagement – irrespective of the legislative issue – which can be utilized by any industry. STEP 1 – Register to Vote: A basic tenet of civic responsibility, voting provides you with a voice in the political process. STEP 2 – Contact Elected Officials: Don’t worry that your unsolicited comments will be intrusive; elected officials expect to hear from [beverage alcohol retailers] because they’re community leaders and support their communities. And when they don’t hear from you, they assume you’re either not interested in the issue or it’s not imprtant to talk about.”
STEP 3 – Activate Your Employees: The success of your business directly impacts your employees. As such, encourage them to make their voice heard. STEP 4 – Visit Elected Officials: Meeting face-to-face with your elected officials is a great way for them to get to know you and provides the opportunity for you to educate them about your concerns on issues related to your business. STEP 5 – Invite Elected Officials to Your Business: First-hand impressions are the best way to build support and empathy. Lawmakers can meet your employees and get a better understanding of how their decisions affect your business. Set aside time during a visit for a photo opportunity and send a post-visit thank you note that summarizes your position. STEP 6 – Build Relationships: Building relationships with legislators and their staff is Engagement 101. As part of the relationship-building process, include them on the distribution list of your company’s external communications and participate in town hall meetings. This helps make your business their priority. STEP 7 – Attend a Day on the Hill: Participating in your state association’s “Hill Day” events is a great way to get involved and make your voice heard.
A Hat Worth Wearing In an industry where on- and off-premise retail operators wear an endless number of personnel hats – owner, manager, clerk, HR manager, technology guru – they’re hardly wanting for yet another, especially one colored by poli-tics. But with issues being debated at all levels of government that are far too important to your business, this is a hat retailers must wear. Don’t be deterred from action, as the implications for your business are far too great. And be sure to look to ABL for help in getting engaged politically. ABL works hard to protect the best interests of the entire beverage alcohol retailing industry before Congress and federal government agencies – especially against rules and regulations that can have a negative impact on your business. While it can be easy to get frustrated and downhearted with the political process - especially when it comes to partisanship - don’t let that discourage your involvement. The more you get involved, the more likely you are to effect change. |
state & industry
California: San Francisco to Get First New Liquor Licenses Issued by State in 77 Years A recent bill sponsored by state assemblyman Mark Leno (D-San Francisco) has the city of San Francisco primed to get its first new liquor licenses in over seven decades (albeit just five of them in total). Earmarked for new and/or existing restaurants located within one of seven commercial areas which currently lag behind with respect to the number of restaurants or “full” liquor licenses in operation. With licenses on the secondary market averaging approximately $300,000 in the San Francisco area, the idea behind the new licenses is to provide businesses in these commercial with a more affordable option. Indiana: Lawmakers Begin Survey of ‘Inconsistencies’ in Alcohol Laws State lawmakers met during the last week of September to begin their review of the state’s existing alcohol laws and regulations, aiming to highlight a number of “inconsistencies” and provide the General Assembly with a number of recommendations on reforming the laws. The chair of the committee, State Rep. Matt Lehman, noted that “there are some things this committee wrestled with and said, ‘here, maybe, are some priorities that we need to focus on going forward.’ As far as a recommendation on what we do with it, I don’t think necessarily it’s going to come from this committee… It is an issue we’re going to have to deal with at some point.” Kentucky: State Lawmakers Consider Whether to Allow Home Delivery of Alcohol Drizly, one of the leading companies in the emerging alcohol delivery sector, has asked the Kentucky legislature to consider a bill that would permit it to operate within the state. Passage of the bill would allow the company to expand in to a new market and source local stores to deliver wine, liquor and beer to customer’s homes through its mobile application. Maine: State Police Chiefs Group Opposes Marijuana Legalization Question on November Ballot As voters prepare to head
to the polls in the coming months, the Maine Chiefs of Police Association recently announced its formal opposition to the question of marijuana legalization on the state’s November ballot. The measure would legalize recreational marijuana use for adults in the state. In opposing the ballot measure, the association highlighted concerns about public health and safety. Michigan: Beer Tax Would Increase More Than 200% Under Michigan Bill Under a proposal from state representative Tom Hooker (R-Byron Center), the state’s beer tax would increase by some 244% - or roughly $0.05 per 12-ounce can. Currently standing at $6.30 per barrel ($0.019 per 12-ounce can), the state legislature has not increased the beer tax since 1966. New York: Cuomo Signs Legislation to Update State Alcohol Law New York Governor Andrew Cuomo recently signed legislation that is set to modernize the state’s antiquated Alcoholic Beverage Control Law. Last updated over 80 years ago, the law included prohibitions against on-premise establishments selling alcoholic beverages before 12:00 p.m. on Sunday. Pennsylvania: State Police Age Compliance Program The Pennsylvania State Police’s Bureau of Liquor Control Enforcement is currently working to recruit individuals between the ages of 18 and 20 interested in criminal justice to volunteer as underage buyers for their Age Compliance Program. Program volunteers are trained by officers from the Bureau of Liquor Control Enforcement and sent to on- and off-premise alcohol retailers, attempting to purchase alcohol. Upon completion of the program, participants will be provided with a Certificate of Age Compliance Program Participation. Virginia: State ABC Launches “Project Sticker Shock” The Virginia ABC recently launched a new community awareness program designed to prevent individuals 21 years of age and older from purchasing and/or providing alcohol to minors. Dubbed “Project Sticker Shock,” the campaign involves participants visiting partnering stores and placing stickers on age-restricted products. These
stickers contain information detailing the dangers and penalties involved when caught providing alcohol to any individual under the age of 21. The program also seeks in highlight compliance with the state’s underage drinking laws. Washington: Study Finds Many Who Voted to Privatize Liquor Sales in State Would Now Vote Differently After voting to privatize liquor sales in the state, it appears many Washingtonians are experiencing buyer’s remorse. According to a recent article in the Journal of Studies on Alcohol and Drugs, some 20% of residents who voted in favor of measure in 2011 would change their vote. This compares to the 4% of residents who initially voted against the measure.
EMV Adoption Remains Sluggish A recent survey released by management consulting firm The Strawhecker Group (TSG) notes an estimated 44% of retailers who accept credit and debit cards now have EMV terminals in place. Of these merchants with EMV terminals in place, however, only 29% currently accept chip-based transactions – resulting in 15% still relying on “swipe” transactions. Based on previous research and estimates, TSG expected this figure to be more than 50% at this point, thus reflecting the slowing pace of implementation across all retailers. Small Businesses Embrace Mobile Payments Over Credit Cards A number of small businesses have decided to opt-out of the EMV standards by pursuing mobile payment technologies as an alternative. According to the recent CAN Capital Small Business Health Index, nearly 35% of small businesses now accept mobile payments (Apple Pay, Android Pay, etc.) – a marked increase from 2015, when only 13% of businesses accepted mobile payments. The report also found approximately 27% of businesses are fully EMV complaint – a figure which falls in line with similar studies. The report further noted that nearly 70% of respondents do not plan on becoming EMV compliant within the next 12 months.
Amex Can Prevent Retailers from Pushing Other Credit Cards The U.S. Court of Appeals for the Second Circuit ruled in late September that American Express (Amex) can prevent retailers from encouraging customers to use credit cards with lower transaction fees – continuing its practice of enforcing contracts with merchants prohibiting them from attempting to get customers to pay with other forms of payment. The original case, brought by the DOJ and attorneys general from 17 states in 2010, argued that Amex was operating “an unlawful restraint of trade” by not allowing retailers to push customers to use payment methods other than Amex. In issuing its ruling, the U.S. Court of Appeals for the Second Circuit ruled that the lower court only considered the interest of retailers, “while discounting the interests of cardholders.” The judges further noted that “though merchants may desire lower fees, those fees are necessary to maintaining cardholder satisfaction – and if a particular merchant finds that the cost of Amex fees outweighs the benefit it gains by accepting Amex cards, then the merchant can choose to not accept Amex cards.” Debit Card Reforms Mark 5th Anniversary October 1 marked the 5th Anniversary of debit card reforms which brought increased competition to the market. The reforms included prohibiting Visa and MasterCard from preventing competitors from processing merchants’ debit card transactions and created new incentives for banks to establish their own fees for these services. “Debit reform brought free market principles to what was a broken market characterized by price-fixing,” said Greg Ferrera, senior vice president of government relations and public affairs at the Na-tional Grocers Association, a member of the Merchants Payments Coalition, in a press release. “Every-one has been better off since the giant card companies can no longer block competition and price-fix fees.” |
SPRING FALL2016 2016||ABL ABL INSIDER INSIDER
American Beverage Licensees 5101 River Rd, Suite 108 Bethesda, MD 20816 (888) 656-3241 www.ablusa.org
American Beverage Licensees is the preeminent national trade association for retail alcohol beverage license holders across
the United States. Its members are comprised of on-premise and off-premise retailers who annually help infuse billions of dollars into the American economy. ABL represents the interests of American small business owners and a historical part of the American way of life. Many members are independent, family-owned operators who assure that beverage alcohol is sold and consumed responsibly by adults. |
Beer Institute Diageo National Beer Wholesalers Association Wine & Spirits Wholesalers of America
PLATINUM Bacardi USA
Beam Suntory, Inc.
Distilled Spirits Council
Brown-Forman Castle Brands Charmer-Sunbelt Group Pernod Ricard USA Republic National Distributing Company Southern Glazer’s Wine and Spirits, LLC Wine Institute
Moët Hennessy USA
Presidents’ Forum of the Distilled Spirits Industry
Monarch Beverage Company Patrón Spirits Company Remy Cointreau USA
Sidney Frank Importing Co.
R.J. Reynolds Tobacco Co.
affiliate members ALABAMA Alabama Beverage Licensees Association ALASKA Alaska CHARR
ARKANSAS Arkansas Beverage Retailers Association COLORADO Colorado Licensed Beverage Association CONNECTICUT Connecticut Package Stores Association DELAWARE Delaware Small Business Leadership Council
FLORIDA Florida Independent Spirits Association
GEORGIA Georgia Alcohol Dealers Association
ILLINOIS Illinois Licensed Beverage Association
INDIANA Indiana Association of Beverage Retailers Indiana Licensed Beverage Association KANSAS Kansas Licensed Beverage Association KENTUCKY Kentucky Association of Beverage Retailers
MARYLAND Maryland State Licensed Beverage Association MASSACHUSETTS Massachusetts Package Stores Association
MISSISSIPPI Mississippi Hospitality Beverage Association
SOUTH CAROLINA ABC Stores of South Carolina
NEW JERSEY New Jersey Liquor Stores Alliance
TENNESSEE Tennessee Wine & Spirits Retailers Association TEXAS Texas Package Stores Association
MONTANA Montana Tavern Association NEW YORK Empire State Restaurant & Tavern Association New York State Liquor Stores Association
OKLAHOMA Retail Liquor Association of Oklahoma PENNSYLVANIA Malt Beverage Distributors Association of Pennsylvania
RHODE ISLAND Rhode Island Liquor Stores Association
SOUTH DAKOTA Licensed Beverage Dealers of South Dakota
VIRGINIA Virginia Licensed Beverage Association
WISCONSIN Tavern League of Wisconsin
WYOMING Wyoming State Liquor Association WINE & SPIRITS GUILD OF AMERICA
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