WineAmerica Joins Industry Partners to Oppose a Wholesaler Protection Bill

By Cary M. Greene

On Monday February 14, WineAmerica joined with our producer and importer trade association partners in expressing our opposition to the wholesaler-sponsored bill known as the Comprehensive Alcohol Regulatory Enforcement Act (CARE Act) or, more appropriately, the Wholesaler Protection Act. The purpose of our joint producer letter, available at http://www.winebusiness.com/content/file/Joint_Producer_Letter_GO_2_14_2011.pdf, is to ensure that members of Congress, particularly new members of Congress, understand the ramifications and intent of this harmful bill before it is reintroduced this year. As we noted in our joint letter, “[t]he 2010 bill would have invited enactment of discriminatory state laws and protracted litigation.”

When the CARE Act was introduced last Congressional session it was dropped under the bill number H.R. 5034. The bill will have a new bill number when it is reintroduced this session, but that will not stop WineAmerica from forcefully opposing the CARE Act.

Our core arguments against the CARE Act are simple: not only does the bill seek to undermine a core Constitutional tenet—that interstate markets should be free and open—it does so through scare tactics that are fundamentally at odds with the evidence.

Wholesalers talk constantly about the threat of “state deregulation,” that any changes to the three-tier system—even thoughtful, well considered changes—will result in underage alcohol consumption and states being unable to collect alcohol excise and sales taxes. They use these arguments consistently to push for the CARE Act and to try and establish its “necessity.”

Reading the recent Direct Wine Shipping report put out by the Maryland Comptroller’s office, http://www.comp.state.md.us/DWS_Complete.pdf, several facts become clear: (1) state regulation of direct-to-consumer shipping is effective; (2) the safety protocols written into state direct shipping laws prevent deliveries to minors; and (3) bonding and reporting requirements give states the tools for effective tax collection on wine shipments.

The arguments wholesalers use to defend the CARE Act are simply untrue, and we will be on the front lines of this fight until the bill is ultimately defeated.

WineAmerica Legislative Update

By Jennifer Montgomery

As we await the next step in the saga of the “CARE” Act, drama is not lacking on Capitol Hill as Congress and the Administration wrangle and argue over major money issues. President introduced his 2011 budget and as expected, the budget proposes some significant cuts which the Republicans feel do not go far enough. The House began debating the Continuing Resolution (CR) this week as well. The CR would provide money to operate federal agencies and programs through September. In its current proposed form it cuts 60 billion dollars from current spending levels. If it does not pass both the House and Senate, the possibility of a government shutdown becomes very real. It will be a very protracted CR debate in the House because approximately 600 amendments have been filed by members. We are still sorting out what the CR and Presidential budget cuts would mean to the programs that are important to our industry.

Going back to the “CARE” Act, WineAmerica, along with other groups that have been working together to oppose the bill, sent a letter to the Hill urging Members of Congress to refrain from co-sponsoring the bill when it resurfaces. We still have no solid intelligence that indicates when or in which chamber the bill will be re-introduced, but we know it will be resurrected and we are keeping a close watch on the Hill so that when it does show up we’ll be out in front of it.

One issue that is very important to the industry, but is still a little further down the road is the 2012 Farm Bill. But that being said, WineAmerica, as part of the Specialty Crop Farm Bill Alliance, has already begun educating the new members of Congress about the Farm Bill programs that we care about, meeting with USDA, as well as talking with other specialty crop groups about strategies for preserving these programs and their funding in what will be an incredibility tight Agriculture budget.

FY 2012 TTB Budget to be $5 million less than proposed for FY 2011

By Michael Kaiser

Today to much fanfare the White House released the FY 2012 Budget Proposal. This is the recommendation to Congress for the funding of the Federal government for the 2012 Fiscal Year. There are a wide variety of spending cuts that have been proposed by the Obama Administration in the proposal.

The TTB is facing a cut of $5,000,000 from previous years. Unlike previous budgets, there are no proposed “user fees” for TTB regulation. In the past the Bush Administration and the Obama Administration have proposed that the industry pay to be regulated through a “user fee.” The user fee was essentially a reintroduction of the Special Occupational Tax that wineries were subject to for many years.

The TTB has been struggling with budget issues for the past two years. Any reduction in funding would be detrimental to their ability to regulate the industry. We hope that TTB will be able to restore their funding to previous levels in order to best serve the wine industry and the public.

TTB Announces Changes for COLA Submissions

By Michael Kaiser

The Alcohol Tobacco Tax and Trade Bureau has just announced a few changes for submitting Certificate of Label Approvals (COLAs) and Formula Approvals.

As many of you probably noticed it is taking longer than normal for COLAs to be reviewed. The current average is around 20 to 25 business days, which works out to close to six weeks. The TTB came out with the following statement today:


COLA and formula reviews will continue to be conducted in as timely a manner as possible. To achieve that goal, we will continue to review COLA and formula applications in the order they are received. However, to reduce review delays on these applications, we will no longer be accepting “Expedite Requests” or “Informal Reviews,” effective immediately. As we are experiencing considerable increases in the number of applications received, you should allow adequate time for a 90-day application review process within your business plan and anticipate that we may require you to make revisions to your labels or formulas.

Now, this does not mean that it will take 90 days for your label submission to be approved, but what it does mean is to allow 90 days for any issues that may come up with the label. The TTB is currently understaffed, and with the current Federal hiring freeze, they cannot hire new staff and if someone leaves the agency they are not replaced.

What is of particular concern is the suspension of “Expedite Requests”. In the past, with proper documentation, the TTB would expedite the review of a particular label(s). Label approvals could be turned around in less than a week. Now a winery has no recourse for an expedited label review if an unforeseen rejection occurs.

TTB is strongly encouraging people to use the COLAs Online system. Online applications are reviewed in half the amount of time that paper submissions are. Because of the amount of labels submitted and the staffing issues at TTB, it is currently taking around 10 business days for COLAs to be reviewed online.

If you are a WineAmerica member and are currently using COLAs Online or want to switch to that form of COLA submission, I am always more than happy to review the label before it is submitted.

If you have any questions about this TTB announcement please contact me at mkaiser@wineamerica.org or at 202-783-2756.

To read the notice from TTB, please go here: http://www.ttb.gov/labeling/label-formula-application-adjustment.shtml