Kroger Proposes A Distributor Oversee Brand Placement

Kroger, one of the largest alcohol retailers in the United States, has proposed a drastic new alcohol category management system. The new category management system would be managed by Southern Wine and Spirits, one of the largest distributors in the country, and would be funded by wholesalers and suppliers. What Kroger suggests is a “pay to play” system that would be detrimental to many small wineries who may not have the resources to participate. At this point it is unclear whether or not this proposal is legal in the eyes of TTB.

Kroger currently uses a system in which the biggest producers work as “category captains” who advize Kroger how to allocate shelf space. This new plan would allow Southern Wine and Spirits to oversee how much display brands get at the more than 2,600 Kroger stores across the US. Alcohol companies, rather than Kroger, will pay Southern for the service.

WineAmerica, along with our industry colleagues, have concerns over the legalities of this new system. We question the legality of the proposed system under the Federal Alcohol Administration Act, as well as state tied house laws. With our industry colleagues we have drafted a letter to the Treasury department requesting a careful review and guidance on this proposal. The letter language is below:

 

November 18, 2015

Jacob J. Lew, Secretary

Department of the Treasury

1500 Pennsylvania Ave., NW

Washington, DC  20220

 

Re:  Request for Clarification on Category Management from the Alcohol and Tobacco Tax and Trade Bureau

Dear Secretary Lew:

On behalf of the undersigned trade associations representing beer, wine and distilled spirits, we are writing to urge Treasury Department action on clarifying the rules of trade practices generally and category management specifically high profile category management concept being promoted by one of the nation’s largest retailers. We believe the category management proposal being mandated by one of the leading national grocery store chain operators raises serious issues of compliance by the alcohol industry with both state and federal laws.

It is the responsibility of the Alcohol and Tobacco Tax and Trade Bureau to the Federal Alcohol Administration Act (FAA Act).  We are specifically requesting clarification of TTB’s category management guidance and enforcement of the Act’s various trade practice  provisions such as the tied house, commercial bribery and exclusive outlet prohibitions. Moreover, prohibitions on providing items of value either directly or through indirect inducements such as arrangements are of immediate concern for our members.

As an industry, we support an appropriate regulatory framework at both the Federal and State levels.

With the dramatically increasing number of legitimate beverage alcohol producers in the beer, wine and spirits industries, as well as the increasingly concentrated economic power at the retail tier, the need for TTB to provide a fair and level playing field for the regulated industry alcohol laws and regulations has never been greater.

When issues such as the proposed retailer planogram system (category management) and payments to a third party providing services to one retailer are industry members, TTB what is permissible under the law and the penalties for.

In 1995, TTB’s predecessor agency ATF issued revisions to trade practice regulations to accommodate more recent business practices. However, the exceptions listed in the revised guidance were intended to be limited, This proposed national grocery store chain program goes far beyond the scope of the amendments and is contrary to the purpose of the Federal Alcohol Administration Act.

Please issue guidance to the industry on this closely watched issue. We are available to about this program.

 

Reach out to Michael Kaiser, Director of Public Affairs here at WineAmerica with any questions. 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.

Congress Approves Omnibus Appropriations Bill

Includes COOL Repeal and Increased TTB Funding

Happy Holidays from all of us at WineAmerica. We had a very productive and successful year and we look forward to 2016. We will be back in the new year with a full slate of work on such issues as music licensing requirements and federal excise tax reform.

Congress wrapped up their work for the year today with the passage of the Fiscal Year 2016 Omnibus Appropriations Bill, sending it to the President’s desk for final signature. The bill fully funds the federal government until September 30, 2016. The bi-partisan agreement features several provisions relevant to the American wine industry.

  • TTB Funding: The bill features $106,439,000 in appropriations funding for TTB. This is $5,000,000 more than last fiscal year, with that money dedicated to label and formula approval.
  • COOL Repeal: The bill repeals the mandatory country of origin labeling requirements for certain cuts of beef and pork. The repeal of the COOL rule will protect the American wine industry from costly tariffs placed on wine exported into Canada and Mexico.
  • Tax Filing Requirements: Alcohol producers liable for not more than $50,000 per year in federal excise taxes to file and pay such taxes on a quarterly basis, rather than by month. Additionally, those producers liable for not more than $1,000 per year may pay taxes annually, rather than quarterly. The provision also exempts such producers from IRS bonding requirements.
  • Definition of Hard Cider: The provision defines hard cider for purposes of alcohol excise taxes as a wine with an alcohol content of between 0.5 percent and 8.5 percent alcohol by volume, with a carbonation level that does not exceed 6.4 grams per liter, which is derived primarily from apples, apple juice concentrate, pears, or pear juice concentrate, in combination with water. The previous alcohol content limit for hard cider was 0.5 percent to 7 percent.
  • Market Access Funding: The bill fully funds the USDA Market Access Program (MAP) at $200 million.  MAP funds are key for states expanding their wine sales into foreign markets.

If you have any questions about these provisions or any other part of the bill, please contact Michael Kaiser, Director of Public Affairs at mkaiser@wineamerica.org.

Canada and Mexico Given Approval to Implement over $1 Billion in Damaging Tariffs on American Exports, Including Wine

Washington, DC – The World Trade Organization (WTO) announced today that it is authorizing Canada and Mexico to move forward with a combined $1,009,760,000 in retaliatory tariffs in response to U.S. noncompliance on Country of Origin Labeling (COOL) for muscle cuts of beef and pork. WineAmerica urges Congress to enact a full repeal of the non-compliant provisions of the law to avoid retaliation and honor our international trade obligations. Wine has long been a target for COOL retaliation and today’s announcement signals that we have run out of time on this issue. Retaliation could start within days, posing a very real threat to our economy and thousands of American jobs. Unless Congress acts now, companies that export to our two largest trading partners are in jeopardy of losing significant market share that will be difficult to regain. We urge Congress to act now to bring the U.S. into compliance and end this impending negative economic blow to the U.S. economy.

WineAmerica will work with its partners in the COOL Reform Coalition to ensure quick a timely repeal of the COOL rules.

To learn more about the COOL issue, please visit WineAmerica’s in-depth analysis on the impact it will have on the American wine industry.  

Reach out to Michael Kaiser, Director of Public Affairs here at WineAmerica with any questions. 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.

WineAmerica Appoints Janie Brooks Heuck to Board of Directors

WineAmerica has appointed Janie Brooks Heuck of Brooks Wines to the Oregon seat on the WineAmerica Board of Directors. Janie will represent the Oregon membership of WineAmerica in the Oregon regional board seat.

Janie is the Managing Director of Brooks Wines in the Willamette Valley. Brooks winery was founded by Janie’s brother Jimi Brooks in 1998. Upon Jimi’s unexpected passing in 2004, Janie quickly found herself responsible for the business operations of the winery. Eager to gain knowledge of the wine industry as quickly as possible, she surrounded herself with Oregon’s highly respected winemakers and business advisors and enrolled in a Viticulture and Enology course at UC Davis to increase her acumen in the industry. As time evolved, Janie continued to gain experience, which resulted in the desire to carry out Jimi’s wish – for Brooks Wines to be more than a winery, a family legacy that he hoped one day would be continued by his son Pascal.

Janie has been volunteering her time to run Brooks since 2004 and the sole owner is Jimi’s son, Pascal. Since his passing, Janie has increased the production from 3,500 cases to 15,000 cases. She has been very active in the Oregon wine industry.  She held a six year term, including a year as Chair of the Board for Oregon Pinot Camp.  She is currently on the Board of Directors of International Riesling Foundation as the Vice President of Marketing and serves on the media committee for the International Pinot Noir Celebration.

“I am very honored to join the WineAmerica Board. It is an outstanding resource and advocate for all wineries across the country.” said Heuck, “I look forward to serving as a liason between the ever growing and strengthening Oregon Wine industry and the important work of WineAmerica.

The WineAmerica Board recently met in Lexington, Kentucky. Completing a two year transition process that culminated in streamlining the Board of Directors from 29 to 17 members. The WineAmerica Board will meet again in Washington, DC from May 22-24, 2016 as part of the National Wine and Grape Policy Conference. Registration information and more can be found here: The National Wine and Grape Policy Conference

 

WineAmerica Board Meets in Lexington, Kentucky

FOR IMMEDIATE RELEASE

Contact: Michael Kaiser

Director of Public Affairs

202-223-5172

mkaiser@wineamerica.org

October 28, 2015

WineAmerica Board Meets in Lexington, Kentucky

WineAmerica, the National Association of American Wineries, just concluded its annual Fall Board of Directors meeting in Lexington, KY. The two day meeting resulted in the board of directors being reduced from 29 to 17 in order to make the board a more streamlined organization representing every wine growing region in the United States. The officers of the WineAmerica Board are Caroline Shaw, Chair of the Board and Executive Vice President of Jackson Family Wines, Santa Rosa, California; Trent Preszler, Vice Chair and CEO of Bedell Cellars, Long Island, New York; and Martin Clubb, Board Treasurer and Owner and Managing Winemaker of L’Ecole No. 41 Winery, Walla Walla, Washington.

Keynote speaker at the conference was Larry Meyers, the principal of Meyers & Associates a lobbying firm in Washington, DC. Meyers led an engaging discussion around key issues facing the American wine industry. The top issues included federal excise taxes, music licensing and adequate funding for the federal Tax and Trade Bureau. International issues were also discussed to include the impact of retaliatory tariffs from the Country of Origin Labeling (COOL) debate, the Trans Pacific Partnership (TPP) and the reauthorization of the Import/Export Bank.

“It’s important for the wine community to gather each Fall to discuss not only critical issues facing us in our nation’s capitol but also regional issues we can find common ground on,” said Caroline Shaw. “Hosting the meeting in Kentucky added to our grass roots development and gave us the opportunity to taste the wines of this growing wine region. A big thank you to Old 502 Winery, Purple Toad Winery, Springhill Winery, StoneBrook Winery and Wight-Meyer Vineyard and Winery for sharing their remarkable wines.

The next meeting of the Board of Directors of WineAmerica will take place in Washington, DC on May 23, 2016 when they co-host with the National Grape and Wine Policy Conference with Winegrape Growers of America.

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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Dinner at Stonestreet Farms

Marty and Megan Clubb, L’Ecole No. 41, Walla Walla, Washington – Caroline Shaw, Jackson Family Wines and WineAmerica Chair – Barbara Banke, Chairman and Proprietor, Jackson Family Wines – Larry Meyers, Meyers and Associates.