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Updated: 6 hours 36 min ago

Texas Introduces New Filing Frequencies for DtC Wine Shippers

Mon, 01/14/2019 - 10:19

In October 2018, the Texas Alcoholic Beverage Commission (TABC) instituted a rule change affecting holders of Out-of-State Winery Direct Shipper permits. This change adjusts the frequency at which permittees must file reports of their shipments of wine to Texas residents.

Effective January 1, 2019, Direct Shippers must file shipping reports either monthly, if they ship 5,000 or more gallons annually to Texas residents; or quarterly, if they ship less than 5,000 gallons annually to Texas residents. Previously, the reporting frequencies were quarterly or annually, respectively, if the Direct Shipper was shipping more or less than 4,000 gallons annually.

A final annual and quarterly report is still due in January 2019, based on the previous gallonage threshold. But thereafter, the first monthly report will be due in February 2019, to report shipments made in January 2019; and the first quarterly report will be due in April 2019, to report shipments made in January through March 2019 (quarterly reports will then be due in July, October, and January, to report shipments made in the previous three months).

For ShipCompliant users, we are adjusting the available filing frequencies to reflect this change by the TABC. Users should make sure to adjust their accounts accordingly and ensure they are subscribed to the appropriate frequency — this is particularly so for users whose annual shipments to Texas are close to the 5,000 gallon threshold.

 

Tackle compliance in every state with our Direct-to-Consumer Wine Shipping Rules

 

 

 

The post Texas Introduces New Filing Frequencies for DtC Wine Shippers appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Wyoming’s New Economic Nexus Rules May Affect DtC Wine Shippers

Fri, 01/11/2019 - 08:40

Last year, the Wyoming Department of Revenue (DOR) announced new “economic nexus” rules, expanding the number of businesses that will be required to collect and remit tax on sales made into the state.

We have recently confirmed with the Wyoming Liquor Control Division (LCD) and the DOR that licensed wineries making direct-to-consumer (DtC) sales to Wyoming residents will also be required to collect and remit sales tax, if they meet the new nexus thresholds.

Who now has sales tax nexus in Wyoming?

According to Wyoming’s economic nexus rules, businesses without physical presence in the state must begin collecting sales tax on sales to the state if annually they:

  1. Have gross receipts of more than $100,000 in the state — this includes all sales, including otherwise tax-exempt sales, such as distributions to the LCD; or
  2. Make more than 200 separate transactions into the state.

Anyone meeting these thresholds will be required, as of February 1, 2019 to begin collecting sales tax on retail sales they make in the state, and begin reporting these sales as soon as March 2019.

If you do not make any retail sales to the state (so are not engaged in the DtC wine market there) you are not required to register as a sales tax collector, even if you do still distribute your products to the LCD or other in-state retailers.

Wyoming was actually quite early to the economic nexus party, passing rules requiring remote sellers to collect and remit sales tax even before the Supreme Court’s monumental ruling last year in South Dakota v. Wayfair, in which such economic nexus rules were legitimized.

Wyoming had to stay implementation of those rules until the Supreme Court made its ruling in Wayfair,  but even then the state waited a little while before announcing in November that its rule would be effective in February.

What does this mean for DtC shippers?

The Wyoming LCD and DOR have confirmed with ShipCompliant researchers that wineries making DtC sales to the state will be subject to the economic nexus rules, just as any other remote seller. Therefore DtC shippers should review their annual transactions to the state and determine if and when they will have to begin collecting and remitting sales tax on their DtC orders to Wyoming..

Sales tax collection applies in addition to the 12 percent markup on wine purchases that the state also requires from DtC shippers.

Wyoming sent out notices to many wineries that they believe are close to the $100,000 or 200 separate transactions thresholds, informing them of their likely sales tax obligations.

If a winery has received this notice but will not meet the economic thresholds, it should reach out to the DOR right away. As the notice states, if a winery that received this notice does not either register for sales tax or notify the DOR that it is not subject to these new requirements by January 21, 2019, the DOR will assume a compliance failure and take appropriate punitive action.

If you received a notice, but are in fact not subject to the economic nexus rules (i.e., you will not exceed the annual thresholds), submit a written statement to that effect either by email to terri.lucero@wyo.gov, or by post to:

Wyoming Department of Revenue

Attn: Terri Lucero, Administrator, Excise Tax Division

122 West 25th St.

Cheyenne, WY 82002

In addition, wineries that use their DtC license to sell directly to Wyoming retailers should make sure to file “resale certificates” from their retailer customers with the DOR in order to be exempted from sales tax collection for such sales. These are “sales for resale,” for which the Wyoming retailer will be the party responsible for collecting and remitting sales tax, not the winery. This is standard practice for wholesale distributions of all products.

ShipCompliant is working to enable collection and remittance of sales tax for DtC wineries that meet the thresholds, and will send out notice to users when this functionality is ready. As more developments come out, we will make sure to keep you informed.

 

Tackle compliance in every state with our Direct-to-Consumer Wine Shipping Rules

 

 

 

The post Wyoming’s New Economic Nexus Rules May Affect DtC Wine Shippers appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

How to Expand Your Brewery’s Footprint: Craft Beer Distribution Laws and Market Conditions

Wed, 01/09/2019 - 17:22

It’s no secret that the craft beer scene has exploded over the past two decades in the United States. The total volume of beer produced by microbreweries has jumped from around 700,000 barrels in 2004 to nearly 6 million as of 2017, according to our friends over at the Brewers Association. Likewise, the total number of American breweries has skyrocketed from just over 1,500 at the turn of the century to well over 6,000.

This is great news for beer enthusiasts – both makers and drinkers – across the country, and indeed around the world. The market has seen continuous growth over the past several years; despite beer sales dropping in general, craft beer was up 5 percent in 2017 according to the same Brewers Association report.

While breweries are taking advantage of this pathway to increased sales and expansion, they are also faced with growing pains – and that’s perfectly natural for a business in any industry, let alone one as heavily regulated as alcohol production.

In addition to logistical issues most growing organizations face like analyzing the market, licensing, and managing distribution, brewers also have to cope with a bevy of federal, state, and local regulations. To help beer producers with their expansion efforts – in terms of both new products and geographical reach – we’ve compiled a guide, 10 Key Steps to Expanding Your Brewery’s Footprint.

This is the first in a short series of blogs detailing some of the issues breweries face when expanding. Stay tuned for the ensuing editions by subscribing to the ShipCompliant blog.

 

Understand your own ability to comply with craft beer distribution laws

Each state – and many local jurisdictions – has its own registration process, compliance obligations, and tax rates. This complicates expansion and distribution into new areas. Before you launch a new product or start selling into a new area, you should assess your internal resources. You’ll need to factor in the size of your team, the depth – or lack – of knowledge you have about multiregional compliance, and the finances you have allocated to address it.

Remember, registering products in new jurisdictions can be expensive and time consuming. If you spend too much time or money putting out a series of fires during registration because you weren’t fully prepared to handle it, you may end up hindering your own growth. It’s important to have a fully fledged plan in place and a complete understanding of requirements in each new area you intend to sell into before you actually attempt to expand.

 

Research the markets(s) where you intend to distribute beer

Compliance is a big component to expansion, but it’s also imperative to understand the state of the market itself. Different regions may have different trends in both beer production – for example, New England is known for its IPAs, Colorado for its darker beers, etc. – and consumption alike. Heavier winter beers probably aren’t going to sell as well regardless of the season in, say, Florida as they might in the midst of a chilly Minnesota November.

In addition to following trends, you should think of the ways you can diversify your products from those that are already selling well. What about your beer stands out from the local offerings, or from popular nationally distributed craft brews?

We’ll have more on how your branding can impact your beer’s identity – and, thus, how it resonates with consumers – in the next edition of this series. Until then, cheers, and happy brewing. 

 

 

Find out how ShipCompliant by Sovos can help your brewery stay on top of compliance by signing up for a free demo.

 

 

 

The post How to Expand Your Brewery’s Footprint: Craft Beer Distribution Laws and Market Conditions appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

The TTB Wants You – To Comment on Labeling and Advertising Rules

Tue, 01/08/2019 - 14:50

The end of 2018 proved to be a moment of flurious activity in the Trade and Tax Bureau (TTB). Last year, after the passage of the Craft Beverage Modernization and Tax Reform Act, the agency had to spend the holiday season tearing through the major tax overhaul, striving to implement rule changes that were set to take effect mere days later. In 2018, while the TTB’s late-year activities are a bit more long-ranging, the agency was still far from taking it easy.

The TTB’s biggest undertaking at this time was an announcement on November 26 of the publication of a proposed rulemaking to “update, simplify, and clarify the labeling and advertising regulations for wine, distilled spirits, and malt beverages.” This massive proposal (taking up well-over 100 pages of the Federal Register) has important implications for the beverage alcohol industry, which will be discussed in more depth below.

But along with this proposed rulemaking, the TTB has also been busy recently establishing and proposing new American Viticultural Areas (AVA). AVAs are an extremely important resource for the wine industry, as they provide accurate and dependable information for consumers regarding the source location of wines. Under federal laws, in order to use an AVA, 85% of a wine must be sourced from grapes grown within the AVA. For an industry taken by the idea of terroir (and rightly so!), having that assurance can be invaluable.

In recent weeks, the TTB has announced the establishment of AVAs for the Upper Hudson (NY) and the Van Duzer Corridor (OR), along with expanding the territories for the established Arroyo Seco (CA) and Monticello (VA) AVAs. In addition, there are also proposals to establish new AVAs for the Crest of the Blue Ridge Henderson County (NC), the West Sonoma Coast (CA), and the Eastern Connecticut Highlands (CT).

 

Proposed Amendments to Labeling and Advertising Regulations

While new and expanded AVAs are important news, the leading regulatory changes the TTB is working on are those listed by the agency in Notice No. 176, the proposed rulemaking published in the Federal Register of Monday, November 26, 2018.

As the TTB notes, this proposed rulemaking is just the latest in its multi-year effort to “Facilitate Commerce through a Modern Labeling Program Focused on Service and Market Compliance.” This effort has also included removing formula requirements in certain conditions, expanding the list of allowable revisions for labels where they do not need a new COLA, improving the functionality of COLAs Online and Formulas Online, and add lots more staff to handle labeling and formula regulations.

In the proposed rulemaking, the TTB sets out a number of regulatory adjustments and changes they hope to implement, with the stated intent of improving “understanding of the regulatory requirements and to make compliance easier and less burdensome”. These changes the TTB proposes include:

  • Incorporating changes to label standards that have arisen from statutory changes (e.g. the use of semi-generic designations on wine labels) or from international agreements (for instance, incorporating designations of geographic significance).
  • Permitting greater flexibility on the placement of mandatory information on labels.
  • Permitting greater flexibility for wine labels when certain appellations or when using multiple varietal designations.
  • Codifying long standing TTB interpretations of rules with First Amendment implications, such as the stance that the prohibition on disparaging statements does not prohibit truthful and accurate comparisons with competitor’s products.
  • Modernizing and finalizing rules regarding alcohol content statements for wines and malt beverages, including removing outdated language like the ban on use of the term “pre-war strength” (referring to pre-World War I strengths).
  • Instituting rules regarding packaging label requirements, including extending the requirement that opaque packages include mandatory label information to malt beverage products.
  • Clarifying rules regarding the use of terms associated with one commodity when used on labels of a different commodity, to prohibit such uses when they would confuse a consumer but permitting them when the use would not be misleading.
  • Consolidating alcohol advertising regulations in a single, new part 14 to title 27 of the Federal Register, which will aim to unify rules for all three commodity lines of wines, beers, and spirits.

Note that this proposal does not address other ongoing labeling initiatives by the TTB, such as “Serving Facts” statements, gluten content statements, standards of fill, or modern advertising issues (i.e. social media).

As said, the proposed rules cover more than 100 pages of regulatory adjustments, which can be rather dry reading. For anyone looking for an easier summary, the Libation Law Blog has promised to closely digest the proposed rules and provide helpful summaries of what they find.

The TTB also states that they intend to provide industry members with three years to update their practices and get into compliance with the rules once they are finalized.

Before they get finalized, however, there is opportunity for industry members to file their own comments and suggestions to the agency — indeed, that is the purpose of this proposed rulemaking, to solicit comments from the audience of affected individuals so that when the agency finalizes their rules, they are suited to the real life situation of those affected.

Anyone affected and interested by the proposed rulemaking is encouraged to voice their opinions to the TTB. The comment period is set to close on March 26, 2019 (though we have heard of a petition to extend that period). Before this period ends, comments can be submitted:

  • Online at the Federal e-Rulemaking Portal.
  • By mail, addressed to Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005.
  • In person or courier to the Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Suite 400, Washington, DC 20005.

However, while the TTB is open to comments from all and sundry, it is recommended that you not take this opportunity frivolously. A well-thought, incisive comment, professionally drafted perhaps with the consultation of an attorney will have a much greater impact than something put together late one night. Indeed, many industry groups are likely to file their own comments, so if you are part of any associations or organizations, consider reaching out to them to see how you can support or influence whatever they might submit to the TTB.

While the government shutdown continues, many agencies have ceased many normal functions. This will affect the ability of agencies to receive comments, consider them, and draft new rules. Though the due date for comments to the TTB is not until the end of March — hopefully long after the shutdown has ended — note that any comments you submit may not be properly received until normal government functions have resumed.

The post The TTB Wants You – To Comment on Labeling and Advertising Rules appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup | Government Shutdown Affects Beverage Alcohol Industry, Trends to Watch in 2019, and Breweries Move to Sustainability

Mon, 01/07/2019 - 14:48

2019 is now upon us, and with it comes the first Roundup of the new year! Already there are a number of critical ongoing issues that are affecting the beverage alcohol industry, in particular the government shutdown, now in its 3rd week. With the government at a standstill, beverage alcohol producers, who require approval from the federal government for their formulas and labels, are unable to release new and planned products. While threats of a prolonged shutdown may be just that — only threats — the prospect of further delays will bring compounding difficulties for the industry as it begins the year.

In other news this week, we also look at the upcoming Supreme Court arguments in the Tennessee liquor store residency case, along with a very interesting legal analysis on whether the plaintiffs are even justified in bringing their complaint and what might happen if the Court’s decision is based on this procedural question and not on the underlying legal principles. We then look at what might be included in a rumored sell off of brands by Constellation and why flagship brands tend to struggle. And finally, we celebrate the centennial of our very trusted and valued partner, Wines & Vines!

Speaking of Wines & Vines, stay up to date with the latest trends in the DtC wine market with the Sovos/Wines & Vines 2018 DtC Report. Make sure to download your copy here! (But know that the 2019 Report is coming just around the corner!)

 

Regulatory News and Discussions

TTB Closes Operations Amid Government Shutdown | Since mid-December, the federal government has been shutdown due to a budget impasse, leading the TTB to cease many regular actions. ShipCompliant

Government Shutdown Means You May Not See Any New Beers or Wines for a While | Breweries and wineries require federal approval for their products’ labels, but with the TTB closed during the shutdown brewers and vintners who want to roll out something new can’t. Fortune

Supreme Court to Hear Oral Arguments in Tennessee Retail Residency Case January 16 | The U.S. Supreme Court is scheduled to soon consider arguments in a case centered around the 21st Amendment and the three-tier system. Wine Business

Will the Roberts Court Stand Down on the Tennessee Wine Case? | An important but may be overlooked question is whether the plaintiff, Tennessee Wine and Spirits Retailers Association, has standing to sue? Irish Liquor Lawyer

New Laws Affecting the California Alcohol Sector in 2019 | Winery and alcohol producers now can post on social media about upcoming special events at restaurants, bars, wine stores or other venues in California. Wine Business

How Colorado’s New Liquor Law Will Affect the Craft Beer Industry | As of January 1, full-strength beer became available in grocery stores across the state. 5280 Magazine

Whiskey Sour: U.S. Craft Distillers Say Trump Trade War with Europe Is Killing Export Plans | Washington’s trade dispute with Europe may have faded from the headlines in recent months, eclipsed by grander tensions with China, but the fallout continues for many companies around the country that have long targeted Europe as an achievable export market. Washington Post

 

Industry Updates: Market Conditions and Developments

State of the Industry: What’s To Come For Alcohol in 2019? | The past year has seen the continued growth of craft beer and craft spirits, an increased number of microbreweries, and a rise in experiential drinking. Beverage Daily

Constellation’s $3 Billion Wine Sale: What’s on the Block? | Last fall, multiple reports surfaced that Constellation Brands is exploring a selloff of several wine labels—among them Clos du Bois, Cook’s, Arbor Mist, and Mark West—as it looks to continue premiumizing its portfolio in line with market trends. Shanken News Daily

Hop Take: Flagship Beers Are Failing Because Consumers Get Bored Quickly | This is the dichotomy of the craft beer business: The most successful craft brands are the ones suffering the most. VinePair

Top 10 DTC Sales Growth Practices | VinQuest 2018 reveals the importance of the human touch in DTC wine sales. Wine Industry Advisor

The Hispanic Consumer Is Key to the Future of the Wine Industry | Taking into account the expected demographic growth, according to research studies by Rabobank, a global agroindustrial bank together with the Wine Institute, by the year 2033 it is expected that Latinos could buy 96.5 million boxes of wine. Abasto

 

Digestif

Beer and Eco-Innovations | From small craft brewers to big multinational brewing conglomerates, there’s a growing self-awareness and collective consciousness about how the industry can change and become “greener”. Living It

100 years of Covering the Wine Industry | As the North American wine industry grew and evolved, so did Wines & Vines. Wines & Vines

The Best and Worst Beer and Liquor Trends of 2018 | 2018 was a weird year, as a drinker — and as a person who writes about the craft beer and spirits industries. Paste Magazine

Winemaking Disasters: When Wine Goes Wrong | Making wine is not easy. From natural disasters and vineyard pests to human error and deliberate sabotage, Matt Walls shares some of the trials and tribulations that winemakers have overcome to get the bottle to your table. Decanter

Wine Enthusiast 2019 Vintage Chart | A general guide to the quality and drinkability of the world’s wines. Wine Enthusiast

 

Find out how ShipCompliant by Sovos can help your business stay on top of compliance by signing up for a free demo.

 

The post BevAlc Roundup | Government Shutdown Affects Beverage Alcohol Industry, Trends to Watch in 2019, and Breweries Move to Sustainability appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup | Agencies Extend Trade Practice Enforcement, How Could a Great 2018 Harvest Affect Prices Ahead, and What’s in a Bubbly Wine?

Thu, 12/27/2018 - 09:10

As 2018 comes to a close, we at ShipCompliant by Sovos want to extend our deepest appreciation to all our clients, partners, and regular readers. We know it is such a privilege for us to be able to work in this industry and interact with so many fantastic people. We have very high hopes for what 2019 will bring, and all the many more years in the future when we can continue to support bringing your vision to fruition.

For this week’s Roundup, we look at a notice from California announces its plan to tax online orders — which has implications for the beverage alcohol industry as online sales expands; we then look at an announcement from the White House regarding the removal of certain tax exemptions for importers and exporters of beverage alcohol (all amid ongoing threats of government shutdown), then Brewers Association reveals a new definition for craft beer, and why innovation and availability brings good tidings for trying new wines in 2019.

In case you missed our End of Year Virtual Seminar, read our recap, which also has a link to the entire presentation, which you can watch at your leisure.

Happy New Years to everyone, and here’s to a great 2019!

Stay up to date with the latest trends in the DtC wine market with the Sovos/Wines & Vines 2018 DtC Report. Make sure to download your copy here, and stay tuned for the 2019 Report, set to be released in late January.

 

Regulatory News and Discussions

TTB Newsletter | This week’s top news includes a reminder to include who you are representing when you comment on TTB rulemaking, what’s new in the latest versions of COLAs Online and Formulas Online, registration is now open for our next Formulas Online webinar, and publication of four rulemaking documents related to American viticultural areas. TTB

Trump Administration Blocks Tax Breaks for Alcohol Companies | The Trump Administration finalized a regulation Monday that limits the ability of U.S. wineries and global alcohol companies to reduce their import taxes. Fortune

California Announces Intent to Tax eCommerce | In a news release published on December 11, the California Department of Tax and Fee Administration formally announced their intent to join 30+ other U.S. states in the taxation of remote commerce. Sovos

Trade-Enforcement Agencies Are Ramping Up Their Wine-Sales Investigations | The Washington D.C.-based Alcohol and Tobacco Tax and Trade Bureau (TTB) has been ramping up its investigations into legal infractions that break the Tied House Rules thanks to a $5 million infusion of government investment last year. Forbes

Why Santa Can’t Send You Christmas Spirit | In a world where consumer can get anything they want, however they want, the spirits industry is at a real disadvantage. Rabobank

Wine Institute Discusses Top Issues With California Legislators | The future of the wine excise tax reform approved late 2017, tariffs on US wine exports, and Brexit are among the issues on the Wine Institute’s to-do list, according to a recent hearing focusing on the wine industry before state legislators. Winebusiness.com

A High Court Ruling on Wine Retailer Interstate Commerce Is Ever so Near | It’s been more than a dozen years since the Supreme Court ruled against restricting out-of-state wineries from interstate shipping direct to consumers. That ruling is now being tested by out-of-state retailers seeking the same access. Forbes

 

Industry Updates: Market Conditions and Developments

Brewers Association Board Agrees to Revise “Craft Brewer” Definition, Form PAC | Citing a need to remain flexible at a time when a growing number of craft breweries are experimenting with non-traditional beer offerings, the Brewers Association (BA) today announced that it has once again revised its “craft brewer” definition. Brewbound

California North Coast Wine Grape Harvest in 2018 Too Much of a Good Thing? | The good news for the 2018 North Coast wine grape harvest is it produced fruit that a number of winemakers are praising for quality, but the not so great news is it may have provided too much of a good thing. North Bay Business Journal

Key 2018 Wine Trends — Gender and the Wine Industry | At the top of the list of issues driving the evolution of the wine industry is the momentum driving all sectors of the industry to examine the role of women in wine, both currently and historically. Fermentation

9 Beer and Spirits Predictions For 2019 | Instead of ushering in profound advancements or unforeseen windfalls, Forbes’ Tara Nurin believes next year will prove unremarkable. Forbes

 

Digestif

Why 2019 Is the Year of the Curious Wine Drinker | The discovery category in wine is growing, and that’s a tremendous boon for the curious wine drinker. Forbes

Busting Terroir Myths: The Science of Soil and Wine Taste | Professor Alex Maltman questions the new orthodoxy that vineyard geology is of overriding importance to a wine’s character, and highlights some factors that may have been overlooked when it comes to understanding wine terroir in the glass. Decanter

The Science of Bubbles in Wine | Examining the effervescence in sparkling wine and its influence on mouthfeel, flavor, and aroma. SevenFifty Daily

How Good Is Canned Wine? | There are a number of advantages to canned wine, and it is currently enjoying increasing popularity in the United States, where it is seeing healthy sales. Decanter

 

 

Find out how ShipCompliant by Sovos can help your business stay on top of compliance by signing up for a free demo.

 

The post BevAlc Roundup | Agencies Extend Trade Practice Enforcement, How Could a Great 2018 Harvest Affect Prices Ahead, and What’s in a Bubbly Wine? appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

TTB Closes Operations Amid Government Shutdown

Fri, 12/21/2018 - 16:09

The federal government has shut down after Congress was unable to pass a bill providing for funding for federal agencies. This has come about as a result of President Trump refusing to accept a bill — even a stop-gap measure providing temporary funding — that does not provide funding for his planned border wall with Mexico.

This shutdown means that all non-essential government services will be halted for the time being, which also affects the Trade and Tax Bureau (TTB).

While not all TTB activity will be halted — filing of tax remittances and operational reports will continue online — many key services the agency provides for the beverage alcohol industry are set for a temporary stop. These services include COLAs Online, Formulas Online and Permits Online. Thus, anyone hoping to submit a COLA, formula or permit application during the shutdown will find their efforts stymied.

During this time, ShipCompliant users may continue to use our COLA submission tool to prepare COLA applications; once entered in your ShipCompliant account, your application will be saved and queued to submit as soon as the TTB resumes normal functions.

All other state government-related support provided by ShipCompliant (e.g., tax filings, product registrations, LabelVision) will continue to operate as normal.

We hope the impasse affecting the federal budget process will soon be resolved — and that the President’s threats of a “very long” shutdown are just empty words — so that the TTB (but also all other government employees) can return to work and continue to provide the services the beverage alcohol industry requires as a matter of law to operate.

 

 

Find out how ShipCompliant by Sovos can help your business stay on top of compliance by signing up for a free demo.

 

The post TTB Closes Operations Amid Government Shutdown appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

‘Tis the Season for Boozin’ with These Traditional Holiday Drinks

Wed, 12/19/2018 - 19:10

The holiday season is a time to cherish loved ones, great food, and – perhaps most importantly – great booze. Holiday traditions are abound this time of year, and many include particular cocktails or other alcoholic beverages that most tend not to drink throughout the rest of the year. From mulled wine to eggnog, people have long included specialty drinks in their annual holiday traditions.

But how did these drinks become designated as “holiday” beverages? What makes a hot toddy so special in December, as opposed to, say, April? And how has eggnog maintained its place as a holiday staple despite being loathed by so many?

To rediscover the origins of these drinks, let’s take a walk down memory lane – though, given their alcoholic content, we won’t fault you if you’ve, er, “misremembered” certain components.

 

Booze with medicinal properties – no, really!

We’ve all met someone who claims you can cure the common cold – or, more likely, revive yourself from a nasty hangover – with a stiff cocktail. But as it turns out, this was actually a common method recommended by doctors for centuries.

Some traditional holiday cocktails, like the famed hot toddy, began as medical remedies. The British empire found its way to India in the early 17th century in search of valuable spices. As VinePair explains, the Brits then began to add some of these spices to a traditional remedy native to the British Isles – hot water and Scotch. Thus, the “hot toddy” was born.

For decades, American colonists used hot toddies as a cure for the common cold, following in the footsteps of their primarily British ancestors. Given the timing of cold and flu season lining up fairly closely with the traditionally big American holidays – Halloween, Thanksgiving, Christmas, New Year’s – it makes sense that the drink has become associated with them.

As modern medicine has advanced in leaps and bounds since the colonial days, we think it’s safe to say the hot toddy is no longer a viable solution to your autumnal immune system woes – but we still wholeheartedly endorse sipping them on a crisp evening in front of a cozy fire.

 

Eggnog: The cilantro of the beverage alcohol world?

Everyone has an opinion about cilantro. Some say it tastes like dish soap; others think it’s delicious. Well, the same goes for eggnog (minus the soap comparisons…we hope).

But eggnog has been a staple of cross-continental holiday celebrations for hundreds of years, and it appears to be strongly maintaining its place as a highly-sought-after seasonal delicacy – in 2007, Americans consumed 122 million pounds of the stuff, and there was nearly a shortage in 2016 because of the overzealous demand.

So, how has such a polarizing drink managed to maintain such impressive staying power?

Well, perhaps it’s fair to point a finger at the Founding Fathers. That’s right – George Washington himself had a personalized eggnog recipe he served to guests at his Mount Vernon holiday gatherings, and early Americans were eager to follow suit given the abundance of the key ingredients (milk, eggs, and rum) in North America.

Eggnog predates the United States, of course. It is believed to have originated in medieval Britain, though the core liquor elements have changed from ale or wine to rum through the passing of time. Meanwhile, eggs were likely introduced to the mix some hundreds of years after the original drink was invented using hot, curdled milk as the base.

 

Mulled wine has outlived the language of its inventors

Much like the hot toddy began as a remedy for the common cold, mulled wine began as a defense mechanism against the biting winter in ancient Rome. Vivino notes it can be traced back as far as the second century, which means it has now officially outlived the Latin language its creators spoke.

Despite great popularity through the centuries, it wasn’t until Sweden got a hold of mulled wine and made some alterations – resulting in the name “glögg” to encompass the entire genre of drink – that it became a cornerstone of the holiday season. Its seasonal popularity was actually a result of some clever marketing, as producers widely began using imagery of Santa Claus in their package designs to appeal to consumers in the lead-up to Christmas. This came slightly prior to the turn of the 20th century, which is fairly recent compared to the aforementioned drinks.

No matter how you personally partake in boozy holiday celebrations – or don’t – the entire ShipCompliant by Sovos teams extends its best wishes for the season!

 

 

Treat yourself to the gift of stress-free compliance this holiday season by signing up for a free demo.

 

 

The post ‘Tis the Season for Boozin’ with These Traditional Holiday Drinks appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

ShipCompliant End of Year Virtual Seminar Recap

Wed, 12/19/2018 - 16:49

2019 is rapidly approaching! Which means that 2018 is almost gone (where did the time go?). Tis the season then for good food, family, and cheer. It’s also the time to reflect on the previous year and prepare for what may come in the new year. Not to miss out, ShipCompliant by Sovos presented its annual End of Year Virtual Seminar on December 12, 2018. If you missed the original broadcast, it is available to see here.

But in case you’re not inclined to watch the recap, here are some highlights:

 

BevAlc Industry Regulatory Updates

Direct-to-Consumer. 2018 will be another banner year for direct-to-consumer (DtC) shipping by wineries, with sales easily breaking the $3 billion level. In October, Oklahoma opened up, leaving only a handful of states with no allowances for DtC shipping. While there have been some hiccups with Oklahoma — particularly with regards to the use of fulfillment houses in facilitating shipping by licensees — we have high hopes for the state going forward. Valiant efforts were also made this year to open up Alabama and Delaware, which unfortunately fell a bit short. But we expect the campaign to continue in 2019, with even better results this time.

Craft Beverage Modernization & Tax Reform Act. At the end of 2017, Congress passed a major tax overhaul, which included provisions for beverage alcohol suppliers, drastically reducing their federal tax burdens. These provisions kicked into effect in 2018, though there was plenty of uncertainty as to how they would be applied, leaving the Trade & Tax Bureau (TTB) with lots of work to explain the nuances of the bill. If you’ve been taking advantage of this tax benefit, make sure you’re following the latest from the TTB on how to administer the taxes, and make sure to let your representatives in Congress know you need them to renew the tax cuts after December 31, 2019!

Tariffs. Earlier this year, the Trump Administration put various protectionist measures into effect. These included tariffs on aluminum and steel, and on a wide swath of goods coming from China. These import tariffs have impacted beverage alcohol suppliers, as they raise the price of materials necessary for the industry (especially with aluminum cans becoming more common in both beer and wine). In response, many countries have imposed their own tariffs on American goods, including wine and bourbon, leading to increased problems for American producers as they attempt to expand their export business.

Tennessee Wine & Spirits Retailers Ass’n and the case for retailers making DtC shipments. At the end of 2017, we published a series of blog posts discussing the current state of retailers making interstate DtC shipments of alcohol (on a change to Missouri’s rules, an overview of other states’ rules, and a broader review of the legal ramifications). That timing turned out to be rather prescient, as 2018 saw a slew of new lawsuits and efforts to expand that right. Cases out of Missouri, Michigan, and Illinois produced inconsistent results, with some courts finding it discriminatory to allow in-state retailers to make DtC shipments, and others finding that a legitimate use of a state’s 21st Amendment rights.

However, these cases have been put on hold until the Supreme Court rules on Tennessee Wine & Spirits Retailers Ass’n v. Blair. While that case is immediately about Tennessee’s 2-year residency requirement for applicants of off-premises liquor package licenses, it presents an opportunity for the Supreme Court to expand its 2005 Granholm ruling to retailers (meaning states would have less right to have rules in place that discriminate against out-of-state parties), or to shut the door on that line of thought. Since Granholm enabled the current state of DtC shipping for wineries that we all enjoy today, it’s needless to say that we are paying very close attention to this case and will providing our views when the Court hears oral arguments on January 16, 2019.

 

ShipCompliant by Sovos Product Updates

As valuable as it is to keep up with regulatory updates, it’s also moot unless our compliance and reporting system is also updated. And in 2018, we put considerable resources into improving ShipCompliant’s functionality, particularly regarding our state registrations and overall system performance.

We have invested a lot of time and resources into the performance of our platform and have seen huge improvements. We focused on order imports, report downloads, and registration generation time as these are the critical tasks of your business during busy times. Our January projections for the average time for system functions are:

    • Order imports: 10 seconds — 31 times faster than in April 2018.
    • Report downloads: 15 seconds  — 71 times faster than in April.
    • Registrations created:  30 seconds — 10 times faster than in April

We were also excited to reveal more about a planned, upcoming facelift for ShipCompliant, and about our vision for the One Sovos platform, which will incorporate more of the tools and functions that makes Sovos a world leader in business-to-government compliance management into a single system. We were thrilled to share screenshots from our MarketReady registration tool, a prototype that our team is currently developing against, and to share with you our plan for the future of the ShipCompliant platform.

Our changes for registrations were spurred by the feedback that you, our trusted users, provided to us. We value your input and hope you see the changes to our registrations that you requested. If you have not yet commented on registrations, and have a chance, please take the time to fill out the user survey in your ShipCompliant account. 

Of course, we also want to thank you all for your feedback and collaboration through the year that has helped us make our product even more easy to use, accurate, and scalable.

 

End of Year Tips

As ever with our end-of-year reviews, we want to provide our users with some helpful tips so they can effectively navigate the very busy January filing period. January, after all, is when all annual (and quarterly, and monthly, and semi-annual) returns come due. For a winery making DtC shipments into every state available, that can mean over 100 separate returns in just one month.

So, to make things a bit easier come the new year, here are some steps you can take today:

  • Update your account information. This includes data like licenses and personnel, but also lots of shipping data. Making sure that when you input orders that all relevant information is included will make your returns populate just as you need them. A good example of oft-overlooked but necessary data are shipping tracking numbers, which more states are requiring you to report.
  • Update your settings and preferences. Getting appropriate tax rates, are doing all required age checks, and are filing the right reports can be easy in ShipCompliant — but it does require you to make sure your preferences are set, that you’ve indicated all the states you ship to and have subscribed to all the relevant tools available to you.
  • Reconcile reports. During annual reporting, all your shipping data will need to be reported. But as we all know, circumstances change — an order you entered in August may have been returned or added to from when you first entered it. Make sure to go back an fix any reports that have data that may have changed.
  • Review, Review, Review! Compliance can be simplified, but it cannot work in a vacuum. Even if your returns are always straightforward, it’s always best practices to go back and make sure the data look accurate. Taking a few minutes a month to ensure everything looks right can save you pain later on.

At ShipCompliant by Sovos, our aim is to enable you to take control of your own compliance. We partner with you in compliance by providing regulatory updates, automated reporting, accurate tax rates. This approach lets you control your compliance needs and manage your own compliance practices, based on the services we provide. This has been our winning solution for nearly two decades.

As we look forward to the years — and decades — ahead, with us continuing to enable your compliance solutions, we want to extend our deepest appreciation to everyone for your support and continued engagement with the ShipCompliant team as we’ve grown and developed.

Happy holidays, and cheers to a wonderful New Year!

 

 

Find out how ShipCompliant by Sovos can help your business stay on top of compliance by signing up for a free demo.

 

 

The post ShipCompliant End of Year Virtual Seminar Recap appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

ShipCompliant Introduces New Wine Distribution Compliance Resource

Mon, 12/17/2018 - 17:29

Producing quality wine is complicated and intricate, but selling and distributing that wine in an industry rife with complex government regulations can present an even more substantial challenge. Each new state you expand into will have its own unique regulations, licensing requirements, excise tax rates, and other compliance obligations you will need to fulfill before you gain approval to distribute there. While some states will have similar standards and rules, no two are identical.

You may know your home state’s laws like the back of your hand, and you may be on top of the differences between all your varietals. But when attempting to enter a new state with complex and complicated rules – like Oregon or New York – it can be tricky to pin down exactly what the state is asking of you.

Enter the new ShipCompliant by Sovos Winery Distribution Rules tool. Our team compiled rules, rates, and other pertinent information for each of the 50 states and Washington, D.C. under the following buckets: Licensing, registrations, distribution process, and filings.

Some states do not have certain components – for example, California does not require local wineries to have a license to sell their products within the state – but all have intricacies that require close inspection before you attempt to distribute your products. Expanding your winery’s distribution is a necessary aspect of growing your brand, but it can be complicated and at times lacks clarity. Even the “easy” states can have particularities – using California as an example again, the state prohibits would-be distributors from sending more than 1 liter of samples per brand to retailers, and that retailer cannot have purchased the brand in the past.

Wine distribution is a minefield of regulations, but you can successfully navigate it with the ShipCompliant Winery Distribution Rules resource.

 

 

Struggling with distribution rules, rates, regulations and other compliance obligations? Head on over to the Winery Distribution Rules.

 

The post ShipCompliant Introduces New Wine Distribution Compliance Resource appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Holiday Cheer in the Direct-to-Consumer Wine Shipping Channel

Thu, 12/13/2018 - 15:25

The holiday season is known for the warmth and generosity it inspires in people, but it’s also an incredibly important time of year for wineries. December is a busy month for most companies in business-to-consumer industries due to the holiday rush, and the direct-to-consumer (DtC) wine shipping channel is no different. October, November, and December have historically been among the strongest-performing months of the year for DtC shipments, both in terms of value and volume.

In fact, these three months have seen nearly 40 percent of the total annual value in the DtC channel in both 2016 (39 percent) and 2017 (38.4 percent), despite only making up one quarter of the calendar year. Likewise, the volume of DtC shipments has traditionally been stronger in the fall. In 2016, about 36 percent of sales for the year fell between October and the end of December, a number that dipped by less than half a percentage point in 2017.

Stay tuned for our upcoming 2019 Direct to Consumer Wine Shipping Report, set to be released in mid-January, for insights on how the DtC channel performed this year in comparison.

 

What’s the outlook for holiday DtC wine shipping?

The cause of the surge in sales during autumn is generally due to consumers stocking up on booze in advance of – and during – the holiday season in preparation of parties and big events. This works out well for many wineries, timing-wise, as harvesting tends to slow toward the end of the summer and they can focus their internal resources on preparing for the big holiday swoon.

With more states passing legislation to embrace the direct-to-consumer channel each year, wine producers can look forward to continued growth across the country. Pennsylvania legalized DtC wine shipping two years ago and exploded on the scene last year with a 158 percent increase in shipments.

But the Keystone state wasn’t finished; our midyear data showed a further 44 percent uptick in sales to Pennsylvania consumers through the first six months of 2018. These numbers figure to be even more impressive after the high-volume holiday season comes to a close.

 

How can my winery prepare to grow in the DtC channel?

It’s unreasonable to expect each state that authorizes DtC shipping to immediately become fertile destinations like Pennsylvania has, and only a handful of states that do not allow DtC shipping remain. But this year-over-year growth in that state demonstrates consistent upward trajectory in the channel. Remember, DtC wine shipping has only been legal anywhere in the United States since the famed Granholm decision of 2005, so this channel remains a relatively new market that has yet to realize its full potential.

Wineries can expect residents of established DtC states and newer DtC states alike to continue buying wine via this channel in exponentially greater volumes. It may make sense for your winery to consider expanding sales into new states. To navigate the different rules and regulations in each state and ensure you are in compliance when branching out, head over to our Direct-to-Consumer Wine Shipping Rules tool.

 

 

See for yourself how ShipCompliant by Sovos can help your winery stay on top of compliance for your DtC shipping efforts. Re quest a demo today.

 

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BevAlc Roundup | Will the Illinois Lebamoff case affect Tennessee Wine and Spirits, new AVAs in California, and how Prohibition shaped today’s wine country

Tue, 12/11/2018 - 11:49

Now is the time of year when we look back and recap what happened in the past months and take stock of what went well and what we can improve for next year. Speaking of which, in this Roundup, we have the TTB looking forward to rule changes for labeling and advertising regulations (and wanting your input!); then we preview the outlook for smaller wineries in the years to come, which experts expect to darken; and finally, looking back, we see what were the top beers from 2018. And, regarding end-of-year wrap ups, don’t forget to tune in to the ShipCompliant by Sovos annual Virtual Webinar, on December 12 (or catch it later when we post it next week)!

Stay up to date with the latest trends in the DtC wine market with the Sovos/Wines & Vines 2018 DtC Report. Make sure to download your copy here!

 

Regulatory News and Discussions

TTB Newsletter | This week’s top news includes an offer in compromise accepted from Eagle Brands from a trade practice investigation, posting of the presentations used during our recent malt beverage and distilled spirits labeling webinars, publication of three rulemaking documents related to American viticultural areas, and request for comments on TTB information collections. TTB

New Rulemaking is the Next Step in Our Labeling Program Modernization | The TTB announces the publication of a rulemaking document in the Federal Register to propose updates, simplifications, and clarifications in the labeling and advertising regulations for wine, distilled spirits, and malt beverages. TTB

Reading the Tea Leaves on the Lebamoff Decision | The Lebamoff case out of the 7th Circuit was a strongly written opinion by Chief Judge Diane Wood to influence the Supreme Court’s direction in the upcoming Tennessee Wine case. Irish Liquor Lawyer

Supreme Court Sets Oral Argument in the Tennessee Retailers Case for January 16, 2019 | A showdown for retailers arguing against discriminatory state laws gets set for mid-January as briefs for the petitioners are filed. Alcohol Law Review

Florida the Latest Battleground for Interstate Shipping | A Florida legal declaration seeks to open the state up to the auction and retail market. Wine-searcher.com

USDA Purchases More Than $10 Million in California Table Grapes | California table grapes were included in the USDA Food Purchasing Program for the first time as part of the mitigation program because of the 53% tariff imposed on U.S. grapes by China. The Sentinel

 

Industry Updates: Market Conditions and Developments

Gloomy Outlook for Smaller Wineries | Storm clouds are gathering over Northern California’s hundreds of small wineries. Wine-searcher.com

The Latest Trends in Wine as Seen By Global Execs | Sopexa, the international marketing and communication agency with a special emphasis on food and drink, has released its 2018 Wine Trade Monitor. Forbes

8 New California AVAs on the Horizon | What you need to know about the Golden State’s new appellations. SevenFifty Daily

Think Millennials are a Tricky Bunch? Meet Generation Z…. | After 15 years on center stage, Millennials are about to have to share the spotlight with a new generation whose arrival will rock the consumer scene. Beverage Media Group

 

Digestif

How Prohibition Shaped American Wine Country | If Prohibition never happened, could Missouri have been Napa? We take an in-depth look at how the 18th amendment changed wine the U.S., who survived, and how. Wine Enthusiast

Scotch Whisky v. American Whiskey: Who Won 2018? | Before the fanatics rise up against the statement, this article is not based on flavour or craft. Forbes

The 50 Best Beers of 2018 | Our favorites span light and salty goses made in tanker trucks, to complex, barrel-aged-and-blended wild ales made using coolships and SPain’s ancient solera method. VinePair

Wine Institute Launches Mobile Version of DiscoverCaliforniaWines.com | The website is available for the U.S. and customized for top export markets in nine localized and foreign language versions. Wine Business

 

Find out how ShipCompliant by Sovos can help your business stay on top of compliance by signing up for a free demo.

 

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BevAlc Roundup | TTB Crackdown on Consignment Sales, Whither American Whiskey, and the Six Types of American Wine Drinkers

Mon, 11/26/2018 - 10:42

The holiday season can so often end up filled with chaos and stress that it distracts from the reasons we value this time of year — as a chance to reflect on those we love and care about and everything that brings us joy. And so, as we prepare for a period of busy sales and hectic shipping, we at ShipCompliant by Sovos want to extend our deepest gratitude to our clients, our partners, our friends who all together strive everyday to make each other’s lives better and further this wonderful industry we share. Thank you all so much, and we hope you all had a lovely Thanksgiving holiday!

For this week’s Roundup we look at the Amicus briefs filed before the Supreme Court in favor of the position of the Tennessee Wine and Spirit Retailer’s Association — this will surely capture a lot of attention in the months ahead; if you are an interested party, look around for ways you can get your voice in front of the Court. Speaking of which, this week’s Roundup also has a report on a citizen’s action to file an Amicus, which anyone in favor of expanding the consumer’s interests can subscribe to. We then look at some end-of-year reports for the wine and beer markets, see how tariffs are affecting the bourbon industry, and take a more nuanced look at what trade and market forces actually affect sales of U.S. wine in France.

Stay up to date with the latest trends in the DtC wine market with the Sovos/Wines & Vines 2018 DtC Report. Make sure to download your copy here!

 

Regulatory News and Discussions

TTB Newsletter | This special edition of the TTB Newsletter announces that we have published rulemaking designed to significantly update and improve the alcohol advertising and label regulations, which is a part of our strategic goal to modernize our labeling program. TTB

Fourteen Briefs Filed in Support of Tennessee Wine and Spirits Retailers Association’s Appeal to the Supreme Court | These parties both supported the positions of the Tennessee Retailers, and offered other perspectives to paint a more complete story for the Supreme Court’s consideration. Alcohol Law Review

Wine Consumers to Fund Supreme Court Brief on Wine Shipping Case | A GoFundMe Campaign has been launched that gives wine consumer across the country the opportunity to help fund a “Friend of the Court” Amicus brief in the upcoming Byrd v. Tennessee Supreme Court case. Wine Industry Advisor

TTB Imposes One-Day Suspensions on Napa Valley Wine Companies Over ALleged Illegal Consignment Sales | The suspension of the winery and three other wine companies stems from a joint operation TTP conducted with the California Department of Alcoholic Beverage Control in March. Wine Business

California Winer to Change Labels for Oregon Brands | A Napa Valley winery at the center of a labeling dispute in Oregon has agreed to put new labels on two brands of Oregon Pinot noir, including Elouan and The Willametter Journal. Capital Press

Wineries Run Afoul of Obscure Law | An arcane part of the Americans with Disabilities Act is causing headaches for some producers. Wine-searcher.com

New U.S.-Mexico-Canada Trade Deal Could Open up B.C. Grocery Stornes to Washington Wine Sales | Washington winemakers have chafed for years over the unequal treatment their bottles receive in grocery stores in British Columbia. Spokesman

 

Industry Updates: Market Conditions and Developments

2018 U.S. Wine Sales Are Up, Especially Red Wine Shipped Direct | The U.S. wine market is both up and in the red — red wine, that is. Forbes

As US Beer Shipments Decline, Off-Premise Sales Remain Flat | Shipments of domestically brewed beer are down about 2.9 percent, according to the Beer Institute, but year-to-date volume sales at off-premise retailers are still basically flat. Brewbound

Craft Bourbon Craze Is Over in Europe Thanks to 25% Import Tax | Europe had been blossoming as a source of new revenue — but this market has been effectively cut off for producers that lack the clout or brand recognition of titans like Brown-Forman Corp. and Diageo Plc. Bloomberg

Planning for the Future of American Whiskey | Distillers discuss strategies for keeping up with market demand, forecasting sales, and driving growth. SevenFifty Daily

Sustainability Produces Good Small Winery Financial Performance, Says a Recent Study | Reported last month in Science Daily, a comprehensive study that stretched from the U.S. to Europe points to financial success when small-to-medium-sized (SME) wineries follow sustainable viticultural and winemaking practices. Forbes

 

Digestif

Trump’s Right — It’s Harder to Sell U.S. Wine in France. Tarifs Aren’t the Whole Story | “American makes some good wines, but we have everything we need here in France.” Bloomberg

US Wine Drinkers Defined in Six Segments | US drinkers are changing their behaviour towards the wine category, the US Portraits 2018 from Wine Intelligence has revealed. Harpers

Is Less Really More for Wine Labels? | Wine labels have a habit of being dense and over-complicated. Wine-searcher.com

Cocktails At Kroger? Why Supermarket Bars Are Going National | Shopping drives most of us to drink, it seems; and savvy grocery chains figure they might as well capture those dollars by turning supermarkets into destinations for excellent craft beer and wine. VinePair

 

 

Find out how ShipCompliant by Sovos can help your business stay on top of compliance by signing up for a free demo.

 

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TTB Issues Circular Regarding Trade Practice Guidelines

Mon, 11/12/2018 - 16:02

One of the biggest news stories in the beverage alcohol industry over the last year or two has been the intensified enforcement of trade practice violations by the federal Trade and Tax Bureau (TTB).

An industry circular posted by the TTB on Friday, November 8, 2018 points to the agency’s current engagement with this trend of enforcement, and provides all beverage alcohol suppliers and wholesalers guidance on what activities they should avoid in order to remain in compliance with federal rules. Increased enforcement has been a developing topic since early 2017, when the TTB first received an additional $5 million in appropriations from Congress to expand its investigations activities. For the TTB, trade practices violations were seen as a critical area of rules and regulations that required intensified education and enforcement.

As the circular indicates, despite these increased efforts by the TTB, the agency continues to see “significant and widespread” violations of trade practice rules. According to the circular, the violations that it sees includes such activities as (quoted from the circular, but not a complete list) :

  • Industry members paying fees or providing other things of value to retailers in exchange for display space or shelf space (including designated tap space), commonly referred to as slotting fees.  In some cases, such payments are hidden in the company’s books as payments for samplings that never take place.
  • Industry members and retailers altering invoices in an effort to conceal the nature of inducement payments.
  • Industry members and retailers altering invoices in an effort to conceal the nature of inducement payments.
  • Industry members illegally operating without a valid Federal permit due to not timely reporting changes of ownership, management, or control over their operations.

Trade practice rules are intended to create fair competition and equal access within the beverage alcohol industry. They prevent certain actors from using their established wealth and presence in the market from getting unfair edge over other members of the industry. As the circular says, “[The TTB] believe[s] that the industry as a whole has the ability and desire to operate within the law.“

The circular includes encouragement for industry members to undergo a voluntary disclosure with the TTB for any violations the industry member may have committed. By voluntarily disclosing, an industry member will mitigate whatever action the TTB may take against them for the violation.

The TTB takes its role in enforcing trade practice violations seriously, especially with the additional resources it has had in recent years to engage in enforcement actions. Industry members would do well to also take the TTB’s actions seriously and ensure that they remain in compliance with the federal rules that govern their license.

We at ShipCompliant by Sovos recommend everyone to read this circular and review the federal (and relevant state!) rules regarding trade practice, and take any necessary action to get compliant and stay compliant.

 

 

Find out how ShipCompliant by Sovos can help your business stay on top of compliance by signing up for a free demo.

 

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BevAlc Roundup | ADA Compliance for Winery Websites, Pabst and MillerCoors Clash, and Southern Oregon Wineries Blend Tradition and Modernization

Mon, 11/12/2018 - 15:39

For the second year in a row, this season — the post-harvest and pre-holiday time — is being marked by devastating wildfires in both North and South California. While this year’s conflagrations have not directly affected wine country as last year’s did, the fires’ toll does not occur in isolation. Everyone is impacted when communities are reduced to ashes, when our friends and neighbors suffer. We at ShipCompliant by Sovos again extend our deepest sympathies to those who have been impacted so far, and fervently hope that the weather improves and those brave souls fighting the fires can turn the tide of ruin.

In this week’s Roundup, we look at a circular issued by the TTB cautioning the industry to review their Trade Practice compliance efforts in light of the agency’s continued enforcement actions, the Brewers Association mulls amending the definition of craft beer to incorporate more “non-traditional” styles, and has the Robert Parker rating system lost its sense of proportion or was 2016 just really great for wine?

Stay up to date with the latest trends in the DtC wine market with the Sovos/Wines & Vines 2018 DtC Report. Make sure to download your copy here!

 

Regulatory News and Discussions

TTB Newsletter | Top stories includes two grape varieties that have been approved for use on American wine labels, information about service delays in our TTB call centers, an invitation to apply for the Assistant Director position in the Alcohol Labeling and Formulation Division, and another permit suspension resulting from a trade practice investigation. TTB

TTB Circular: Industry Compliance With Trade Practice Laws and Regulations | Since the beginning of its increased enforcement efforts, TTB has found significant violations of Federal trade practice laws and regulations by some members of the alcohol beverage industry. TTB

Winery Websites and ADA Compliance | The recent news of lawsuits filed against New York wineries has caused industry members to ask if they face any litigation risk if their websites are not accessible to people with disabilities under the Americans with Disabilities Act (“ADA”). JD Supra

Briefs Filed With 8th Circuit Urge Support of Missouri Tied House Law and Advertising Regulations | The State of Missouri has filed its brief and addendum appealing the district court decision to strike down on emIssouri tied house law and two alcohol advertising regulations. Alcohol Law Review

Wine, Consumers and the Court | There is no other category of consumer whose day to day commercial habits are more impacted by politics than wine consumers. Fermentation

 

Industry Updates: Market Conditions and Developments

Pabst Says MillerCoors Is Trying to Put it Out of Business | Pabst Brewing Company and MillerCoors are going to trial, with hipster favorite Pabst contending that MillerCoors wants to put it out of business by ending a longstanding partnership through which it brews Pabst’s beers. Washington Post

2018 Craft Beer Report: Craft Beer Market Experiencing Marginal Growth | IPAs make up nearly a quarter of the craft beer production industry, the largest shar for a single style by a fairly large margin. Beverage Industry

2019 DTC Wine Symposium Announces Workshop Sessions | Content to focus on case studies, practical recommendations. Wine Business

Jim Bernau Responds to Copper Cane’s Joe Wagner | The article regarding Oregon Vintners Pushing Back on Copper Cane’s Labels generated a lot of interest, as did last week’s Joe Wagner Responds: Copper Cane owner explains his side of the story, published by the Oregon Wine Press. Wine Business

Brewers Association Board Proposes New Craft Brewer Definition, Intends to Form Political Action Committee | The Brewers Association board of directors today informed members of proposed changes to its bylaws that would significantly alter the trade organization’s official craft brewer definition, and create a new voting member class. Brewbound

 

Digestif

Why So Many 2016 Napa 100-Point Wines? | None of these were given lightly or without careful consideration of the hallowed position they hold among all the other great wines of the world that have received the pinnacle of wine criticism accolades throughout our 40-year history of Robert Parker Wine Advocate. Robert Parker Wine Advocate

Old World Tradition and New World Innovation The Wines of Southern Oregon | From Peter Britt, who grew grapes in Jacksonville in 1855 to the establishment of the Rogue Valley Vintners in 2018, South Oregon’s wine industry has come a long way. JPR

How Millennials Made the Modern Somm | The role of sommelier has been redefined by a younger generation looking for adventure. wine-searcher.com

 

 

Find out how ShipCompliant by Sovos can help your business stay on top of compliance by signing up for a free demo.

 

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BevAlc Roundup | A DtC Initiative in New Jersey, Brewers Say They’re Preparing for Climate Change, and New Grape Varieties Found in Chile

Mon, 10/29/2018 - 18:48

Happy Halloween! We hope that everyone celebrates the fall season — the colorful leaves, the harvest, the night of spooks and treats — festively and safely. While you’re at it, why not also celebrate with the Roundup?

This week we report on a tax change occuring in Colorado that may affect wineries shipping DtC into the state. We then look at all the nuances for suppliers to be aware of when setting up in a state with franchise laws, a new career survey of industry members points out areas for change, and a new story reports on the missing story behind the Judgment of Paris.

Stay up to date with the latest trends in the DtC wine market with the Sovos/Wines & Vines 2018 DtC Report. Make sure to download your copy here!

Regulatory News and Discussions

TTB Newsletter | Top stories includes the publication of our latest strategic plan, a reminder for breweries that use wine or spirits barrels for aging beer, an announcement about our next malt beverage formula webinar, and three recent field enforcement actions.. TTB

Colorado Announces New Rules For Remote Sellers That Could Affect DtC Wineries | Colorado, recently announced that it will soon begin requiring out-of-state sellers to start collecting and remitting sales tax on their sales to Colorado residents. ShipCompliant by Sovos

A Bridge Too Far For Granholm? Florida Importer Challenges California Three-Tier System | A Florida-based wine importer is hoping to shake up the California three-tier system. DPF-Law

How to Do Business in a Franchise State | A drinks lawyer explains how franchise law works and how suppliers can protect their businesses. SevenFifty Daily

“Frees the Grapes,” Campaign Launches to Give New Jersey Wine Consumers Freedom of Choice | Current shipping restrictions limit New Jersey residents’ access to only 4% of wineries nationwide. Insider NJ

Industry Updates: Market Conditions and Developments

Industry Leaders Weigh in on the State of the Drinks Business | New Career & Salary Survey Report has the industry talking about the future — and opportunities for change. SevenFifty Daily

U.S. Wine Sales Led by Value Increases | Sonoma overtakes Napa in DtC shipment volume as total DtC grows 14%. Wines&Vines

Bye-Bye, Beer? Brewers Say They’ve Got a Plan on Climate Change | Research published this week predicting that beer prices could double as rising global temperatures and more volatile weather cause shortages of barley created a big splash. NPR

Wine Supply is Hitting a Tipping Point | At some point as demand in volume flattens while bearing acres increase, we should expect to see a change in grape buying patterns from wineries and ensuing price changes depending on the specific region and variety. SVB on Wine

Digestif

The Hidden Figures Behind the Judgment of Paris | Many retellings of California wine’s most popular myth omit the women who made the Judgment of Paris happen. SF Chronicle

World’s Most Consumer Liquor Tries to Make It in the U.S. | A distiller of baijui, whose sales in China exceed the global sales of vodka, seeks to expand the high-alcohol spirit to the West. WSJ

26 New Grape Varieties Identified in Bío Bío | A research project into old vines in southern Chile has identified 26 new varieties, previously unknown in the world, and over 60 ‘uncommon’ varieties growing in Bío Bío. Decanter

4 Steps to a Profitable Cyber Monday for Your Winery | The holidays are just around the corner — now’s the time to capitalize on two of the biggest months for wine shipments. VineSpring

 

 

Find out how ShipCompliant by Sovos can help your business stay on top of compliance by signing up for a free demo.

 

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Webinar Recap: Routes to Markets with John Hinman

Fri, 10/26/2018 - 15:21

Among the ranks of beverage alcohol attorneys, there are few with the experience and depth of knowledge of John Hinman, founding partner of Hinman & Carmichael based in San Francisco. (Read their Booze Rules blog here.) So it was to our great pleasure that John recently joined us at ShipCompliant by Sovos to give a webinar presentation on navigating regulatory restraints when bringing products to market.

Beverage alcohol is a notoriously highly-regulated industry, and there are restrictions and limits on what suppliers can do to sell their products. These restrictions include licensing requirements, the need to register labels, and tax payments — but they often get even more nuanced and particular.

In an increasingly crowded market, where any room for suppliers to expand their presence is precious, these restrictions only add to the pain. And so it becomes invaluable to get ahead of the regulations and know what you are permitted — or prohibited — from doing.

This makes John’s presentation invaluable, as a resource cataloging the basic roadblocks that you will need to navigate on your way to market. If you missed the original presentation, we have posted it online available for you to watch here.

 

Highlights From the Presentation

There are so many particularities and nuances when it comes to legally distributing alcohol that it would be impossible to even brush the surface in a single webinar. However, John pointed out some key aspects to be aware of:

  • Understand the Three-Tier system: Beverage alcohol is not like any other commercial product, even if it acts like it at times. Many other industries break down into different producers, distributors, and retailers of goods — but few have legal mandates that require these to be separate entities. Know that, when entering the industry, you may not be able to engage in all the normal business activities you think you should.
  • 50 States Means 50 Different Sets of Rules: The 21st Amendment not only revoked the rule of Prohibition, it also granted broad power to each state to regulate and control the beverage alcohol market in its borders. While there are some general patterns, each state is unique and has to be looked at freshly each time. You might know how to sell wine in California with your eyes closed, but New York is a whole different animal.
  • Recognize the Different Routes to Market: As with the broader retail market, consumers are increasingly looking for ways to purchase alcohol outside of traditional stores, and laws are changing to accommodate this. Currently, 45 states and D.C. permit wineries to sell and ship directly to their residents. And every state grants at least some right for manufacturers to sell directly to consumers at their production facilities. While the rules can still seem hidebound (for instance, while wineries have a large map at play for direct-to-consumer shipping, retailers, breweries, distilleries, and importers are much more limited), the general trend has been to remove barriers. It is critical for alcohol producers to be aware of these alternative paths for selling their products going forward, while also being aware of the limits that currently restrict them.
  • Be Aware of the Gotchas: While the prospect of getting a product to market may seem rosy at times, there are still a number of ways for things to go sour. A major area of concern for producers are states with franchise laws in place. These laws delimit the ways that producers and wholesalers can set up distribution agreements — and more critically, how these agreements can be renegotiated or terminated. A producer who is cavalier about setting up a distribution agreement could find itself stuck in a rotten deal with no prospect for escape.

Another area of concern are restrictions on advertisements by producers, which has especial importance in the world of social media. Producers need to be aware of state and federal laws that restrict how they talk about their products and where they are available for sale. A stray tweet that unfairly singles out a particular liquor store, or a Facebook post about an upcoming wine-and-food pairing, could get a producer in trouble. To prevent this, anyone engaging in the beverage alcohol industry needs to stay vigilant with their messaging.

We again want to thank John Hinman for his wonderful presentation, and all the work he has done to make the beverage alcohol industry thrive.

 

 

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Colorado Announces New Rules for Remote Sellers That Could Affect DtC Wineries

Tue, 10/16/2018 - 16:46

These are heady days for sales tax wonks, as state after state works to pass rules and regulations that will allow them to impose sales tax obligations on sellers with no physical presence in their borders. This state of affairs was set up earlier this year by a U.S. Supreme Court decision, South Dakota v. Wayfair, which we have written about here.

Generally, these amended rules will not change things for wineries making direct-to-consumer (DtC) shipments, as many states already required them to collect sales tax as a condition of getting a DtC license. However, there were a few exceptions.

Recently, one of those exceptions, Colorado, announced that it will soon begin requiring out-of-state sellers to start collecting and remitting sales tax on their sales to Colorado residents. This will equally affect wineries shipping DtC into the state as it does any other remote seller.

According to the notice issued by the Colorado Department of Revenue, starting on December 1, 2018, remote sellers will need to begin collecting sales tax on their sales to the state if in either the previous or current calendar year they have made $100,000 or more in gross sales delivered in Colorado, including exempt sales; or 200 or more separate transactions selling goods delivered in Colorado.

Notably, this change will also affect any winery that has already has a Retailer Use Tax account in Colorado. If you have a Retailer Use Tax account, and will exceed the thresholds listed above, you will need to close that account and create a new Sales Tax Account.

Businesses can register their Sales Tax Accounts as of November 1, 2018, and new registrants will not be required to collect sales tax on sales made before December 1, 2018. Information from the state about these rule changes, and how to manage your Colorado tax accounts can be found here.

This all comes in light of a recent post by the Tax Foundation ranking Colorado last among states in their preparation to collect sales tax from remote sellers. And indeed, there are many unsettled questions regarding these rule changes. One major open question is how local taxes will be administered. According to the Colorado DOR, signing up for a Sales Tax Account will only obligate the registrant to collect and remit state-administered taxes (these include the state rate of 4.2%, along with some county, city, and district rates that are filed with the state regulators).

However, Colorado permits 349 county, city, and district tax jurisdictions to operate independently, including the administration, registration, collecting, and filing of sales taxes. This creates an enormous hassle for businesses by establishing separate tax systems within the state.

The latest information from Colorado is unclear as to whether remote sellers will be obligated to collect local-administered taxes, or just state taxes. But if the state does determine that local taxes will need to be collected, that will go far outside the bounds of what Justice Kennedy delineated as permissible for a state in the Wayfair ruling. While no challenge has yet been leveled against these new rules, Colorado seems to be blithely walking into potential litigation.

It is little surprise that states want to jump on the post-Wayfair bandwagon and begin reaping a new source of tax revenue. But Colorado’s situation should underscore the need for a careful, deliberate approach when establishing a tax scheme for remote sellers. Old rules that seemed to work when all but a vanishingly small amount of retailers had physical locations in the state cannot be easily mapped onto out-of-state sellers.

At this time no legal challenge has been announced, but it is eminently conceivable that these rules will have to be litigated.

Still, wineries selling DtC into Colorado who meet the above thresholds should pay careful attention to these rule changes, plan appropriately, and make any needed adjustments in their tax accounts and elsewhere to make sure they will meet their obligations in the state. As things develop, if challenges arise or the state clarifies its rules, we will make sure to keep you informed.

 

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10 Key Steps to Expanding Your Brewery’s Footprint

Mon, 10/15/2018 - 17:34

Establishing your brewery’s brand in a crowded craft beer market can be challenging enough, and entering new markets with new products adds more fuel to the fire. But these challenges can be even further complicated by the bevy of regulations that apply to those in the beverage alcohol space. Between licensing, distribution logistics, and compliance obligations issued by governments at the local, state, and federal levels, expanding your brewery’s footprint can seem like a minefield at time.

But it doesn’t have to be this way. To help walk you through the preparation you need to complete before successfully conquering new territories and introducing new products to the market, we’ve put together a comprehensive – and free! – guide, “10 Key Steps to Expanding Your Brewery’s Footprint.” Figure out exactly what you need to do to become market-ready, from assessing your internal capabilities to knowing your audience to developing a foolproof expansion strategy to staying on top of compliance.

 

Download your free copy of “10 Key Steps to Expanding Your Brewery’s Footprint.”

 

 

 

https://www.shipcompliant.com/wp-content/uploads/2018/10/Breweries-10-key-steps-to-expanding-your-footprint.pdf

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10 Key Steps to Expanding Your Winery’s Footprint

Mon, 10/15/2018 - 16:24

Branching out into new territories and launching new products can be challenging in a beverage alcohol industry ripe with regulatory requirements and complications. Between licensing, market analysis, distribution and supply chain logistics, and complying with regulations imposed by governments at the state, local, and federal levels, expanding your winery’s footprint can be one landmine of potential noncompliance after another.

How can you successfully navigate these complications, and ensure your products are ready to hit the market on time while fulfilling all your obligations? Fear not – we’ve put together a comprehensive guide to conquering the tricky landscape of getting your products to market! Learn what you need to know to prepare your business for growth, from assessing your own internal capabilities to building the right strategy to sorting out logistics and compliance issues.

 

Download your free copy of “10 Key Steps to Expanding Your Winery’s Footprint.”

 

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