by Michael Kaiser

9.12.16

The TTB has extended its comment period for Notice No. 160: Proposed Revisions to Wine Labeling and Recordkeeping Requirements. The notice proposes to amend the labeling regulations to provide that any standard grape wine containing 7% or more alcohol by volume that is covered by a certificate of exemption from label approval may not be labeled with:

• A varietal designation
• A type designation of varietal significance
• A vintage date
• An appellation of origin, unless the wine is labeled is in compliance with the standards set forth in the regulations.

WineAmerica did a full analysis of the proposal, you can read that here. The original comment period was closed on August 22. The TTB re-opened the comment requests from two different trade associations. The extended comment period is now open until December 7, 2016.

To submit a comment, or view the comments that have already been submitted, please visit the comment page here.

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Questions? Contact Michael Kaiser, Director of Public Affairs, mkaiser@wineamerica.org.

WineAmerica is the national voice the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 43 states and leads a coalition of state and regional wine and grape associations.  As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

8.4.2016

Washington — Today the Department of Justice (DoJ) announced that it has concluded its two year consent decree review, and that it will refrain from altering the existing decrees regulating Broadcast Music, Inc. (BMI) and American Society of Composers, Authors and Publishers (ASCAP), as well as other elements of the music industry. The consent decree has regulated BMI and ASCAP since 1941 in response to anti-competitive behavior. Importantly, the DoJ struck down the Performing Rights Organizations (PROs) requests for “fractionalized licensing.”

This is an important decision for wineries who purchase a “blanket license” from PROs in order to play music at their venue. A blanket license allows a venue to play a PROs entire repertory. Had the DoJ agreed to fractionalized licensing, a winery would have had to pay every PRO that represents a songwriter for a song with multiple writers: for example, if a song has four writers, each with a different PRO, then all four PRO could claim royalties for that single song.

Wineries already face difficult choices when offering live music at their venue, often forcing the winery to cancel their programs. WineAmerica believes that fractionalized licensing would have eliminated buyer’s choice in the marketplace, encourage anti-competitive behavior, and ultimately raise the cost of performing music.

WineAmerica will continue to work to bring transparency to the licensing process. We believe that small business should have the tools to make sound business decisions based on their unique needs.

WineAmerica applauds the Department of Justice in its decision, meanwhile we will continue our lobbying efforts to alleviate undue burdens put upon wineries by PROs.

For more information, contact, Tara Good, Director of Operations at tgood@wineamerica.org, 202-223-5175.

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WineAmerica is the national voice the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 43 states and leads a coalition of state and regional wine and grape associations.  As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

by Michael Kaiser

7.11.16

Background

In the Fall of 2008 the United States, and in turn the global economy, was on the brink of collapse. When the Obama Administration came into office in early 2009, their priorities included investigating the collapse and working with Congress to avoid similar collapses in the future. In 2009 and 2010 the Democrats controlled the House and the Senate and the Administration saw an opportunity to enact reforms with a Democratic controlled Congress. What followed was the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The “Durbin Amendment” is a key provision of the law. The Durbin Amendment is named for its sponsor, Senator Richard Durbin (D-IL).

What the Durbin Amendment does

The “Durbin Amendment” limits transactions fees imposed on merchants by debit card issuers. The amendment proposes to restrict these fees, which averaged 44 cents per transactions, based on one to three percent of the transaction amount, to twelve cents per transaction for banks with $10 billion more in assets. The Durbin Amendment does not apply to traditional credit cards.

The theory behind the amendment was that the fees were not reasonable and not proportional to card issuers’ costs. When Dodd-Frank became law in 2010, the Durbin Amendment was included in the final text. The law required the Federal Reserve to draft rules interpreting the amendment. In 2011, the Federal Reserve issued its final rules and the interchange fees were capped at 21 cents per transaction plus 5% of the transaction amount. Some banks implemented new fees as a result and drastically reduced rewards programs for debit cards.

What does it mean for consumers?

While the transaction fees on debit cards were capped, banks instituted fees on other accounts and transactions. The fees on deposit accounts (checking and savings) increased three to five percent. The fees on those accounts include monthly account maintenance charges, higher insufficient-funds fees, and inactivity fees. Banks also reduced debit card rewards program and enhanced credit card reward programs.

What does it mean for wineries?

Most wineries are small, family owned businesses. With less and less consumers carrying cash, debit cards are the preferred currency for many visitors to tasting rooms. The Durbin Amendment has directly affected wineries as small retailers. Some wineries are paying less in debit card swipe fees. Before the amendment was enacted, retailers paid an average of 44 cents for a normal debit card transaction, which was valued at $38. The Durbin rules meant that for the average $38 debit card purchase, the maximum fee charged would be about 24 cents, which is 45% less than before the law was enacted.

Small retailers that regularly process smaller debit card purchases may have seen costs rise. Before the enactment of the Durbin Amendment, many banks and card issues based transaction fees of a percentage of the purchase value, so merchants were paying smaller fees on smaller purchases and larger fees on larger purchases. After the rules went into effect, Visa and MasterCard began charging the maximum amount for smaller transactions. For example, instead of a winery paying a 17-cent fee for a $10 tasting charge, they suddenly faced a 62-cents fee for the same bill.

Additionally, small retailers have fewer free business checking accounts to choose from, as many banks have eliminated them to recoup their losses from lower swipe fees. Conversely the Durbin Amendment has helped larger retailers as the swipe fee they pay on large purchases has been cut nearly in half.

Current Status

Representative Randy Neugebauer (R-TX) has introduced H.R. 5465, which would repeal the Durbin Amendment. This would not allow the Federal Reserve to control the limit on debit card fees. It is unclear if this is repealed what the ramifications might be, if there is no federal control on the price limits, fees could increase. Additionally any reform on this issue will need to wait for a new Administration to assume office.

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Questions? Contact Michael Kaiser, Director of Public Affairs, mkaiser@wineamerica.org.

WineAmerica is the national voice the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 43 states and leads a coalition of state and regional wine and grape associations.  As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

 

 

by Michael Kaiser

6.27.16

TTB has issued Notice 160 (read it here) Proposed Revisions to Wine Labeling and Record Keeping Requirements. The notice proposes to amend the labeling regulations to provide that any standard grape wine containing 7% or more alcohol by volume that is covered by a certificate of exemption from label approval may not be labeled with:

• A varietal designation
• A type designation of varietal significance
• A vintage date
• An appellation of origin, unless the wine is labeled is in compliance with the standards set forth in the regulations.

If a winery is choosing to file for an exemption from label approval, under this proposal they will only be allowed to use the descriptors on their labels if the wine in question meets the current labeling requirements. For American viticultural areas (AVA) the requirements are:

• The AVA must be approved for use by the TTB
• 85% of the wine must be made from grapes grown in the AVA
• The wine must be fully finished in the state where the AVA is located

That is, a winery may use the AVA with a label filed as an exemption if they have purchased bulk wine that has been finished in the state where the AVA is located and bottled it elsewhere.

The TTB is taking this action in response to concerns raised by wine industry members and members of Congress regarding the accuracy of label information on certain wines covered by certificates of exemption from label approval. The are requesting public comments until August  22, 2016. Comments can be submitted the following ways:

• Internet: www.regulations.gov (via the online comment form for this notice as posted within Docket No. TTB–2016–0005 at ‘‘Regulations.gov,’’ the Federal e-rulemaking portal)
• U.S. Mail: Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Box 12, Washington, DC 20005
• Hand delivery/courier in lieu of mail: Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Suite 400, Washington, DC 20005

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Questions? Contact Michael Kaiser, Director of Public Affairs, mkaiser@wineamerica.org.

WineAmerica is the national voice the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 43 states and leads a coalition of state and regional wine and grape associations.  As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.