Letter to the Department of Justice on Music Licensing

By Tara Good

7.25.2016

Last Friday, the MIC Coalition, which includes WineAmerica, along with bars, restaurants, and streaming services, sent a letter supporting DOJ’s decision to keep in place the longstanding consent decrees which have governed music licensing by ASCAP and BMI for decades.

View Letter to the Department of Justice

Additionally, MIC applauded DOJ’s clarification that the “blanket licenses” advertised by ASCAP and BMI, and detailed in their license terms and affiliate agreements, grant music users a 100% license to play any song in their repertoire.  DOJ rejected ASCAP and BMI demands for “fractional licensing,” which would virtually gridlock music licensing, hurting music lovers, artists and songwriters alike.

From the letter:

“We congratulate you on the Department’s work and your decision to preserve the decrees as currently written.  The decrees guarantee the fair and efficient licensing of public performance rights for musical works.

“In addition, we concur with the Department’s conclusion that 100 percent licensing is necessary for a functioning music marketplace.  The current blanket licenses, consistent with the license terms and affiliate agreements of ASCAP and BMI, do not limit the rights granted to licensees to “fractional” interests in compositions in the ASCAP/BMI repertoires; rather, they grant licensees the right to perform the compositions in the ASCAP/BMI repertoires as a “whole” (whether the compositions are owned entirely by members of the same PRO or by co-owners affiliated with different PROs). Modifying the consent decrees to allow fractional licensing would gridlock the licensed music market and introduce a structure that amplifies the market power of fractional co-owners and all but guarantees widespread collusion among competitors.  That would not be good for consumers, songwriters or artists, nor would it satisfy the public interest.”

Additional links:

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Questions? Contact Tara Good, Director of Operation at tgood@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.

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What is the “Durbin Amendment” and What Does it Mean for Wineries?

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.

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TTB Requests Comments on Wine Labeling Requirements

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.

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Pennsylvania Becomes 44th State to Allow Direct-to-Consumer Shipping

by Michael Kaiser

6.9.16

The Keystone State has become the 44th US state to allow some form of direct-to-consumer shipping of wine. Yesterday Governor Tom Wolf (D) signed House Bill 1690 into law, opening up state. Now, only six states prohibit direct-to-consumer shipping: Alabama, Delaware, Kentucky, Oklahoma, Mississippi and Utah. Pennsylvania is a “control state” and the Pennsylvania Liquor Control Board (PLCB) will remain in place.

Prior to HB 1690, Pennsylvania did have a DTC permit process.  The permit was extremely difficult to obtain as it required all sales to be fulfilled through the PLCB. The new DTC rules resemble the laws that WineAmerica, and our partners the Wine Institute and Free the Grapes! support. When HB 1690 is implemented, it will allow any wine producer licensed with the PLCB, another state, or another country to ship wine to a consumer. However, federal import rules would prohibit a foreign producer to ship. The new DTC license is only open to wine producers, not wine wholesalers or retailers.

To obtain the DTC license, a winery will need to send an application to the PLCB. The application must include a copy of the winery license and a $250 application fee. The applicant winery must also obtain a sales tax license (available here) and show proof of the license to the PLCB. The annual renewal fee for the DTC license is $250. The DTC sales limits are 36 standard cases to a consumer per calendar year per winery. There are no sales restrictions, so a wine that is sold by the PLCB can also be shipped directly to a consumer. The tax requirements are: 6% state sales tax, variable local county and city taxes–which could raise the total tax to 10%–and an excise tax of $2.50 per gallon collected from the purchaser and remitted to the state Department of Revenue.

Another key modernization development in HB 1690 is the ability of restaurants, hotels, and grocery stores with in-store restaurants to sell up to four bottles of wine for off-site consumption.

The bill also creates a commission to study the the possibility of privatizing the PLCB. The commission must provide a report to the Pennsylvania legislature in six months.

The new law goes into effect on August 8. WineAmerica will provide updates as needed.

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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.

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WineAmerica Board Meeting Brings New Leadership and New Members

FOR IMMEDIATE RELEASE

Contact:  Michael Kaiser

Director of Public Affairs

202-223-5172

mkaiser@wineamerica.org

May 26, 2015

Washington, DC – WineAmerica, the National Association of American Wineries, took part in the annual National Wine and Grape Policy Conference this week in Washington, DC.  Held in conjunction with Winegrape Growers of America, the three-day conference attracts wine industry leaders from across the country to meet and weigh in on the most pressing public policy issues affecting growers and wineries.

This year, industry leaders from all over the United States were in attendance, representing wineries, growers and state associations.  Subjects covered included federal excise tax reform, music licensing guidelines and the overall political climate in Washington, DC.  The event culminated with the Wines of America Congressional reception held in the Rayburn Gold Room, where members of Congress, their staff and selected guests sampled wines from 27 states.

New Leadership

Concurrently, the WineAmerica Board of Directors meeting was also held, where the board thanked Caroline Shaw, Executive Vice President and Chief Marketing Officer of Jackson Family Wines, for her two years of service as Chair of the organization.

The new WineAmerica Chairman of the Board is Trent Preszler, CEO of Bedell Cellars on the North Fork of Long Island. Trent has served on the board of WineAmerica since 2008 and the board of the New York Wine & Grape Foundation since 2004, where he is also Chairman. Trent earned an MS in Agricultural Economics and a PhD in Viticulture & Enology, both from Cornell University. He also worked in The White House Office of Science and Technology Policy during the Clinton Administration.

“I am thrilled to take the reins of WineAmerica and continue the robust growth and success we experienced under the leadership of my predecessor, Caroline Shaw,” said Preszler. “The future of WineAmerica is bright, and there are more compelling reasons than ever for American wineries to join our grassroots public policy mission.”

Assuming the position of Vice Chair of the Board is Martin Clubb of L’Ecole No. 41 in the Walla Walla Valley of Washington. Marty is a long time WineAmerica Board member and is currently the President of the Washington Wine Institute. Marty is the Managing Winemaker and co-owner of L’Ecole No. 41 with his wife Megan. Marty was also instrumental in the founding of the Walla Walla Valley Wine Alliance and served as its president for six years. Marty worked with other industry pioneers in the development of the Walla Walla Community College Center for Enology and Viticulture. He earned a chemical engineering degree from Texas A&M University.

New Members

The WineAmerica Board also appointed Dana Huber from Huber Winery in Starlight, Indiana to the open seat from the Great Lakes region. Dana and her husband Ted run Huber Winery and Starlight Distillery. Founded in 1978, Huber Winery is a pioneer in the Indiana wine industry, and they have since expanded into a diverse farm that grows many fruits and vegetables. In 2000 the Hubers founded Starlight Distillery, the first licensed distillery to open in Indiana. Ms. Huber joins another recently appointed Board member, Janie Brooks Heuck of Brooks Winery in Oregon.

WineAmerica would also like to highlight some of our latest members who have joined from our recent membership drive. St. James Winery, a key leader in the Missouri and Midwest wine industry has rejoined the organization, and will be a key member for us in that region. Other leading wineries to join WineaAmerica this spring are Leelanau Cellars in Michigan, Three Brothers Winery and Estate in New York and Dutton-Goldfied Winery in Sonoma County, California.

The next WineAmerica Board of Directors meeting will at the Allison Hotel and Resort in Dundee, Oregon from November 2-3, 2016.

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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.

For more information, visit www.wineamerica.org.

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