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BevAlc Roundup | 5 New Washington AVAs, the Mid-Year DtC Sales Review, and How to Avoid Bad Label Design

Mon, 09/17/2018 - 14:19

Over the next couple weeks here at ShipCompliant, we will be getting prepared for Oklahoma to open up to DtC shipping of wine on October 1; if you are interested in knowing what is required to ship wine to Oklahoma residents, you can find more information here. But for everyone else, there’s still the Round Up to distract us. This week we look at some proposed rules to require wineries to install equipment to control ethanol emissions, how climate change could affect wild yeasts, and evidence of beer production from 13,000 years ago.

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!

 

A World of Regulations: News and Discussions

TTB Newsletter | Top stories include improvements to Permits Online for amending trade names and new CBMTRA guidance for single taxpayers and importers. TTB

Hopped Up On Regulations: 5 Ongoing Concerns for Brewers | A brief look at some of the bigger uncertainties affecting the beverage alcohol industry, and in particular, how they affect beer producers and the sale and distribution of beer. ShipCompliant by Sovos

Regulators May Require California Wineries to Install Ethanol Emission Controls on Indoor, Closed-Top Tanks | Smaller and medium-size wineries may be required to install new ethanol emission controls, according to a settlement reached this summer between air district officials in Santa Barbara County and Wine Institute. Winebusiness.com

5 New Washington AVAs On The Horizon | What you need to know about the state’s prospective new appellations. SevenFifty Daily

How Reciprocity Laws Are Benefiting Craft Producers | Laws in New York and New Mexico are giving small producers a new way to boost their bottom lines. SevenFifty Daily

Class Action Suit Accusing Southern-Glazers of Unfair Business Practices Dismissed | A federal judge in San Jose has dismissed a class-action lawsuit against Southern Glazer’s Wine and Spirits LLC, the nation’s largest wine distributor, according to court records. Winebusiness.com

 

Industry Updates: Market Conditions and Developments

Sovos Announces 2018 Mid-Year Direct-to-Consumer Channel Data | Oregon wines suring while Napa sales stagnate, Rosé on the rise and Pennsylvania as a leading shipment destination. ShipCompliant by Sovos

Consumers Trade Up, U.S. Wine Sales Rise 3% | Cabernet illustrates trend as per-bottle prices increase, varietal remains dominant in DtC, off premise. Wines&Vines

It’s Like Mansplaining But For Race | What the wine industry can learn about black consumers. Forbes

Will Climate Change Kill Cantillon and Other Lambic Beers? | According to a study climate change may have a detrimental effect on the lauded beer style. VinePair

Experts: Smoke Taint in Grapes Can Be Managed | Growers can take measures to lessen the effects of smoke exposure; only at high levels does smoke decrease the quality of wine. Western Farm Press

New Partners For Wholesale Wine Sales | Here’s what works: Wineries find success with new types of distribution companies. Wines&Vines

 

Digestif: For Further Reflection and Enjoyment

According To History, We Can Thank Women For Beer | Beer consumption as been so disproportionately linked with men that it’s easy to forget women were the original brewers. Now, they’re staking their claim again. Huffington Post

Smart Branding Key To Future Wine Sales | The Silicon Valley Bank’s Wine Division’s found says that demographic shifts are transforming the industry. Wine-searcher.com

Traces of 13,000-Year-Old Beer Found in Israel | According to the authors of a new study, the discovery marks the earliest-known evidence of beer production among ancient peoples. Smithsonian Magazine

The Three Traps of Label Design | We should spend more time talking about wine labels, because they matter more than ever before – and badly-executed ones can be disastrous for your brand. Wine Intelligence

Taking Apart the Three-Tier System | Liza B. Zimmerman gets the inside story on US liquor laws with attorney Sean O’Leary. 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.

The post BevAlc Roundup | 5 New Washington AVAs, the Mid-Year DtC Sales Review, and How to Avoid Bad Label Design appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Hopped Up On Regulations: 5 Ongoing Concerns for Brewers

Thu, 09/13/2018 - 16:54

Often enough — and, likely more often than they’d prefer — brewers operate in a world of uncertainty. Will that new recipe taste good? Will my current canning machine meet my needs, or should I upgrade now? Is that new hot style a trend or just a flash in the pan?

At ShipCompliant, we like to bring clarity and guidance to beverage alcohol regulatory compliance. But we also have to admit that, as much as we might want to, we can’t control regulatory decisions. Instead there are a number of issues that are still undetermined and all we can do is wait and see how they play out.

Just because things can be uncertain doesn’t mean we can’t still talk about them. And so, we present here a brief look at some of the bigger uncertainties affecting the beverage alcohol industry, and in particular, how they affect beer producers and the sale and distribution of beer.

 

Taxes — What’s the Future of the CMBTRA?

It was a major coup last year when Congress passed the Craft Beverage Modernization and Tax Reform Act (CMBTRA) as part of the larger Tax Cuts and Jobs Act (TCJA). For years, advocates and lobbyists for the brewing industry strove to pass the CMBTRA (in particular, Brewers Association is owed a lot of credit). The bill began as a modest proposal to decrease the tax burden on small-sized producers, but ballooned as larger brewers and wine and spirits producers latched on. Despite garnering widespread support in both the House and Senate, the bill was languishing before its hasty joinder into the TCJA.

While the bill brought many benefits to the industry, the hastiness of its enactment resulted in some confusion and problems early on. There were questions about how would these reduced rates (or credits, for the wine industry) be filed with the TTB, how should importers claim the tax benefits, and how exactly would the bill’s new permission for brewers to transfer products in bond among each other work?

In the ensuing months, many of these initial problems have been addressed by the TTB. That does not mean, though, that all issues have been resolved. Indeed, perhaps the biggest uncertainty surrounding the CMBTRA is will it last? It is critical to remember that the CMBTRA has an expiration date on it. As written and passed into law, the special rates and procedures set up by the CMBTRA are set to lapse after December 31, 2019.

Many industry groups are working feverishly to get Congress to make the CMBTRA permanent — and hopefully to clean up some of the less-polished provisions while they’re at it. At present Congress is distracted by the elections, and who knows what will happen after November. Whether it can set aside political wrangling long enough to take action on the CMBTRA in the next year is, to repeat a phrase, uncertain, but there is reason to hope.

Any industry members who want the benefits of the CMBTRA to remain in place after December 31, 2019 would do well to reach out to their representatives in Congress and support other efforts by any state or national guilds or associations they are members of.

 

International Trade — What’s Up With Tariffs?

For an industry whose biggest domestic member is actually a subsidiary of a Brazilian-Belgium conglomerate, it should be no surprise that international trade issues can have a big effect on the beer producers. And so it was that, when the U.S. government announced it was imposing tariffs on a number of foreign products, brewers were quickly impacted.

At immediate issue are two tariffs that impact the supply chains and ability for brewers to expand their operations. (Note, so far, unlike wine and bourbon, beer itself has not been made subject to a tariff, only the component parts necessary to produce and distribute beer.)

The section 232 tariffs add a 25% tariff on all foreign produce steel (except steel produced in Argentina, Australia, Brazil, and South Korea) and a 10% tariff on all foreign produced aluminum (expect aluminum produced in Argentina and Australia).

The section 301 tariffs solely affect goods imported from China, but they deal with a much broader swath of commercial goods, including machines used to wash and sort seeds and grains, safety and relief valves, and other electronic appliances. Those tariffs are already in effect, but there are now proposed tariffs on goods that will have a further impact on brewers, such as iron and steel tanks and casks (i.e. kegs) and component parts of taphandles. Hearings on this latest group of section 301 tariffs took place in late August with the U.S. Trade Representative now determining whether (and when) to implement them.

Whether these tariffs are wise, productive, or otherwise merited is a much bigger discussion than there’s room for in this post. For now, we merely want to let brewers know that these tariffs are in place and are having an effect, though how they will ultimately play out is very much up in the air. The Brewers Association has a very handy review of these tariffs and what their impact on the beer industry is, where you can also share your personal experience with these tariffs.

 

Sales Restrictions — Will Rules on Taproom Sales, Self-Distributions, and Franchise Restrictions Continue to Evolve?

Perhaps one of the most important developments for the beer industry (likely on par with the rise of IPA) has been the trend toward loosening restrictions on when and how brewers can sell and distribute their products. With Georgia changing its rules last year, brewers in every state now have at least some ability to sell their beer directly to their customers.

Being able to sell pints in supplier-owned taprooms, or even being able to sell six-packs and growlers for take-away consumption, has given brewers the invaluable ability to interact directly with their customers and develop the necessary connections to popularize their brands. Without taking anything away from the benefits and positive aspects of the three-tier system and supplier-distributor relationships, these self-selling permissions undoubtedly enabled the craft beer industry to become what it is today.

However, that does not mean that everything is settled. On one hand, there are ongoing efforts to expand these permissions, to remove size restrictions and other limitations that still inhibit the craft beer markets in many states. But on the other, retrenchment is still very much at risk.

Or even when a positive bill moves forward, it can be waylaid by contrary forces. Recent examples from Texas and Maryland showcase how things can go wrong even if they begin with the best of intentions. Ongoing efforts to change the laws in Wisconsin also demonstrate the pitfalls that can stymie easing of regulations.

And these are just rules that affect how brewers can sell from their own facilities. There are many more other sales restrictions that the industry is looking to relieve. These include greater permission for brewers to self-distribute to local alcohol retailers, and bringing some renewed sense of fairness and commonsense to the numerous franchise restrictions that states impose. While these restrictions may have once made sense, it’s increasingly difficult to justify them in the current state of the beer industry, with many small producers competing for space among a dwindling number of distributors.

Brewers and their trade organizations continue to make efforts to expand their ability to control their own distribution lines. How these efforts will play out over the next several years, though, is (wait for it) uncertain.

 

Regulatory Enforcement — How Will TTB And Other State Actions Proceed?

One of the driving stories this year in regards to beverage alcohol regulation has been the spate of enforcement actions taken by the TTB and state agencies in response to trade practice violations. Several accounts of distributors paying out hundreds of thousands of dollars in settlement claims, or even of the California winery that lost its Basic Permit for a day, have brought this issue to the fore.

Part of this trend comes from a renewed commitment from federal and state regulators to police trade practice violations. It also benefited from increased funding for the TTB’s investigation division, which has enabled the TTB to put more resources into the effort.

How these enforcement actions will play out is unknown, with the TTB playing its cards close to the vest. It’s certainly possible that after making a quick splash, these actions will fizzle out. Or, perhaps, they could lead to a larger change in the industry, with even the largest industry actors (and therefore those most immune from the risk of fee-based penalties) changing their practices to comport with the stated principles of trade practice restrictions.

As a matter of odds, the likely result is somewhere in the middle, with a few high-profile cases with large fees assessed, or even extended losses of permits, that eventually returns to the previous state of quietude. For now, brewers would do well to take note that these enforcement actions are going on and to make sure that they are staying in compliance will both federal and state rules.

 

Commerce Clause v. 21st Amendment — What’s Going On In The Courts?

Last, but certainly not least, there are several rather interesting court cases moving through the dockets, which have the potential to bring a profound change to beverage alcohol regulations.

In June, the U.S. District Court for the Western District of Missouri invalidated several of the state’s restrictions on certain advertisements, noting that the state’s claim that they were necessary was undercut by the numerous exceptions to those restrictions that the state allowed. Notably, the Court did not consider the 21st Amendment in its analysis, which generally gives states a tremendous amount of power in arguing the validity of their regulations. If this case is upheld by the 8th Circuit on appeal, it could create a whole new world of legal review of state regulations. (You can find a rather nice review of the case and its implications here.)

Then, in August, the 6th Circuit Court of Appeals ruled that a Tennessee law requiring that applicants for a Tennessee retailer license be residents of the state for at least the last two years. This particularly affected corporate retailers, as the residency requirement applied to all officers, directors, and stockholders of corporate applicants. Following the logic of the seminal 2005 U.S. Supreme Court case Granholm v. Heald, the 6th Circuit found that the 21st Amendment does not shield a state’s regulation from scrutiny under the Commerce Clause — and critically, the Court applied the Granholm ruling to retailers, not just suppliers.

These are just two examples, but they are on the forefront of judicial review of beverage alcohol regulations.

Bringing change through litigation can be very expensive and time-consuming. But often enough, major changes in laws have had to come from the courts (and certainly, not just when it comes to beverage alcohol regulation). How they will play out, whether they represent upcoming revolutions in beverage alcohol regulations or just odd blips on the radar, though, is unknown.

 

What’s Next?

What the future may bring is inherently unknown. Even the best predictors can be thrown for a loop. But as they say, forewarned is forearmed. Knowing what the future could bring is itself a tool that everyone should take advantage of. Hopefully, having some awareness of these ongoing regulatory issues will serve you well. After all, getting that new strain of hops to make good beer is only the start of the process — you have to also be able to sell it compliantly.

 

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

The post Hopped Up On Regulations: 5 Ongoing Concerns for Brewers appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Sovos Announces 2018 Mid-Year Direct-to-Consumer Channel Data

Thu, 09/06/2018 - 11:03

Notable trends: Oregon wines surging while Napa sales stagnate, Rosé on the rise and Pennsylvania as a leading shipment destination

Sovos today revealed data on the performance of the direct-to-consumer (DtC) winery shipping market through the first six months of 2018. Among the notable trends in the report were Napa County wine sales slowing but remaining steady while sales of Oregon wines rise, and Rosé continuing to build momentum after strong gains last year.

The annual DtC report is a cooperative effort between ShipCompliant by Sovos and Wines & Vines. The full version of the report is released each January. To create this report, Wines Vines Analytics created an algorithm that uses its database of U.S. wineries to extrapolate all direct-to-consumer shipments from millions of anonymized direct shipping transactions filtered through Sovos’ ShipCompliant platform.

The following results compare the first six months of 2018 to the first six months of 2017. Overall, the DtC channel showed strength. The total value of shipments rose 13 percent, above the 12.5 percent 7-year average increase. Total volume of shipments rose 12.29 percent, above the 11.5 percent 7-year average increase.

 

Oregon surges while Napa sees more modest growth

Among winery locations, Oregon showed 26 percent growth in cases shipped, surpassed only by Sonoma County at 29 percent. Napa County wines, meanwhile, only saw an increase in cases shipped by 0.4 percent. However, this can be attributed to a rise in the value of products shipped. While the number of cases shipped from Napa wineries did not grow significantly over 2017, the average bottle price (ABP) jumped an impressive 5 percent compared to the first six months of last year.

The year-to-date numbers for volume of cases shipped:

Sonoma County +29%
Oregon +26%
Washington +18%
Rest of US +8%
Rest of California +7%
Napa County +0.4%

 

Rosé builds on momentum

In terms of varietals, Rosé continued to produce strong results after making large gains in 2017. Cabernet Franc was also a big riser, and traditionally dominant Cabernet Sauvignon maintained relatively steady growth despite Napa’s less impressive performance. The final numbers for varietals:

Top performers:

Cabernet Franc +37%
Rosé +33% (continued its strong growth even after last year’s great gains)
Sangiovese +26%
Petite Sirah +19%
Sparkling +18%
Cabernet Sauvignon +9%
Red Blend +7%
Moscato +2%

Weaker performers:

Syrah -6%
Riesling -2%

 

Pennsylvania shows thirst for wine

Pennsylvania remained a top destination for wine, with shipments up 44 percent on volume and 40 percent by value. Pennsylvania had a breakout year in 2017 and should also be a top gainer in 2018.

 

Limited-production wineries show pockets of strength

Smaller wineries experienced large price increases. Most notably, Napa Red Blends saw an unprecedented increase in average bottle prices (ABP), skyrocketing 110% from $74 per bottle to $156 per bottle. This would seem to be result of club shipments to members at a handful of high-end wineries, lifting the ABP significantly in this segment.

Overall, ABP at limited-production wineries – which produce fewer than 1000 cases per year – increased by 10 percent. Other highlights in the limited-production category include:

Napa ABP increased 15%
ABP in Oregon increased 19%
Combined, Napa and Oregon shipped 52% of all cases

As a result of price increases, limited-production wineries saw the largest increase in value of any category except the largest, which includes wineries that produce 500,000 or more cases per year. The difference between the increases in value and volume among limited-production wineries is uncommon. Final numbers by winery size included:

Fewer than 1,000 cases per year: +38% Value, +8% Volume
1,000 – 4,999: +12% Value, +10% Volume
5,000 -49,999: +14% Value, +13% Volume
50,000 – 499,000: +4% Value, +4% Volume
500,000+: +42% Value, +32% Volume

The 50K-49,999K wineries have underperformed thus far after having a banner 2017. However, autumn has historically been a healthy season in the DtC wine shipping channel, so there remains plenty of time for wineries in this category to gain ground.

 

About ShipCompliant by Sovos

Sovos offers a nimble software solution tailored to the unique compliance obligations faced by beverage alcohol businesses. As part of the Sovos suite of solutions, ShipCompliant users have access to constantly updated, accurate regulatory information for each of the jurisdictions in which they have compliance obligations.

Sovos’ ShipCompliant platform is the leading compliance and technology platform, automating registrations, tax calculations and reporting in the heavily regulated beverage alcohol industry. With ShipCompliant by Sovos, wineries, breweries, distilleries and other beverage alcohol companies can stay ahead of the latest regulatory changes impacting their business models. Learn more at http://sovos.com/shipcompliant.

 

About Wines & Vines

Wines & Vines offers a comprehensive collection of products to provide a wide range of information solutions for the wine and grape industry. Its magazine, Directory/Buyer’s Guide, Online Marketing System and soon to launch Wine Analytics Report provide news, information, marketing and research capabilities to help our clients grow and manage their businesses. For more information visit http://www.winesandvines.com.

 

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

 

The post Sovos Announces 2018 Mid-Year Direct-to-Consumer Channel Data appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup | Tennessee faces a challenge to its residency requirements for licensees, whither the California wine industry, and ways to accelerate aging spirits.

Tue, 09/04/2018 - 17:12

This is a busy time of year in the beverage alcohol industry, as the grape harvest continues apace and everyone else gets ready for the upcoming holiday season with its special products and unique offerings. So we hope you’ll take a minute or two and check out the Roundup. This week we have a couple reposts from the regular blog feed, in case you missed them. Then, we look at a recent court case in Mississippi that brings up interesting issues involving states going after out-of-state shippers, plus a new disease is affecting grapevines that is being called the new Phylloxera, and why women are at the beating heart of the Bourbon industry.

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!

 

LegislativeUpdate

TTB Newsletter | Top stories include restated policy on the use of controlled substances in alcohol beverages and new guidance related to distilled spirits. TTB

Pennsylvania Announces Simplification of DtC Wine Shipping Reporting | Effectively immediately, DWS licensees will no longer be required to complete the quarterly “by ZIP code” shipping report, including for any past reporting periods. ShipCompliant

What’s In A Label — Webinar Recap | Along with the Colorado Brewer’s Guide, we take a broad look into label regulations and registrations. If you missed the webinar you can rewatch it here. ShipCompliant

Mississippi Rising | On Monday, August 27th the Chancery court in Mississippi upheld “passage of title” terms of sale, dismissing a case brought by the Mississippi Attorney General alleging illegal shipments of wine into the state by out-of-state retailers. Booze Rules

Tennessee’s Retailers Petition U.S. Supreme Court Over Law Imposing Residency Requirements On Out-Of-State Retailers And Wholesalers | Trade association argues residency requirements ensure alcohol retailers know “their community and are invested in its welfare.” Wine Business

Committee Formed To Clarify State’s Alcohol Laws “Stacked Against” Small Producers | The head of a Wisconsin craft alcohol group says a legislative committee aiming to clarify the state’s alcohol laws is “stacked against” small breweries, wineries and distilleries. The Cap Times

7 Trends Currently Affecting Wine Sales and Wine Shipping | There’s no doubt about it: Changes are coming to the wine industry. And many of the trends we are seeing on the horizon will directly affect DTC wine sales, eCommerce wine sales, and the fulfillment of both. Wine Industry Network

IndustryUp

The New, Deadly Disease Threatening The Wine World | The most seriously affected winemakers are already dubbing it “the next phylloxera”. Financial Times

Top 10 U.S. Wine Distributors | As ranked by importance to U.S. wineries, top distributors and executives. Wines & Vines

Exploring New Directions For California Wine | Assessing the changing enology landscape and the challenges faced by young winemakers. SevenFifty Daily

Craft Beer Was Built On An Us-Versus-Them Ethos. Now It’s Tearing Us Apart | Today, it’s becoming increasingly difficult to determine who is an “us” and who is a “them”. VinePair

New Mobile Trends To Drive Sales | Embracing new mobile technologies, targeting and retargeting customers on social media, and ensuring seamless online shopping experiences are among the trends brands should embrace, Wine Business

JustFun

Who Run The (Bourbon) World? Women, No Matter How We Drink It | A group of some 150 women from 23 states and Canada gathered for a weekend of panels and distillery tours, and of course, sipping. Courier-Journal

Global Warming Could Throw France’s Wine-Making Traditions Into Chaos | Erelier, “unbalanced” harvests are putting Bordeaux’s premium grapes into jeopardy. The Atlantic

Here Are the Fastest-Growing Beer Styles In America Right Now | Funky brews are gaining steam, but IPAs aren’t going anywhere. Food & Wine

Accelerating The Aging Of Spirits | Experts discuss the advantages and disadvantages of speeding up the maturation process. SevenFifty Daily

What Does The World’s Best Wine Taste Like? | 7 ways to differentiate between an excellent wine and one that’s truly exceptional.  SevenFifty Daily

 

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 | Tennessee faces a challenge to its residency requirements for licensees, whither the California wine industry, and ways to accelerate aging spirits. appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

What’s in a Label? Webinar Recap

Thu, 08/30/2018 - 18:01

It is hardly a revelation to say that brand labels are incredibly important in the sale of beverage alcohol. After all, in an industry with a seemingly endless supply of new SKUs, having a great label is one of the best ways to identify your products and stand out from the crowd. But when it comes to beverage alcohol labeling, a company’s marketing plan is only beginning of the story. As with so much in the beverage alcohol industry, there is a tremendous amount of regulations surrounding brand labels.

There are rules about the contents of labels: what can be on them, what has to be on them, what can never be on them. Suppliers are required to run their labels past government regulators who check on those rules. And this all occurs at both the federal and individual state levels. To help explicate this situation — at least to provide a basic understanding of what all is at issue — ShipCompliant by Sovos hosted a webinar on August, 23 to go over the ground level considerations that beverage alcohol suppliers should be aware of when bringing new products to market.

In the webinar, I was joined by Andres Gil Zaldana, Executive Director of the Colorado Brewers Guild, who brought the specific perspective of registering labels in the Centennial State.

The webinar is available here for you to rewatch, but I’ll discuss some of our key takeaways below:

 

Know the Federal Rules for Beverage Alcohol Labeling

The first step in navigating the world of label regulations is understanding the rules that are set forth in Title 27 of the Code of Federal Regulations (CFR). The CFR describes the guidelines that beverage alcohol suppliers must follow, and which, if followed, will get them 90% of the way. Though the CFR has different rules for the three types of beverage alcohol (beer, wine, and spirits), there are some general rules that apply to all labels.

As described in the CFR, all labels must include certain information. These include: a trade name (to identify the specific product being sold; the producer or importer’s name and address (to identify the source of the product); the product type or class (to identify what exactly is in the container — say, to discern between a whisky and an amber ale); the net contents (to identify the amount of product being sold); the government warning (to identify that, yes, alcohol can have toxic effects; and the alcoholic content (to identify how intoxicating the product is).

There are specific rules about each of these mandatory pieces of information. For instance, beer products must have net contents listed in imperial units, whereas wine and spirits must be listed in metric units. In addition, a statement of alcoholic content is optional for beer and “table wine”. Then, there is a slew of prohibited information, largely determined around the goal of preventing customer confusion. Types of prohibited label contents include health statements unsupported by scientific research, lewd and obscene images or phrases, unauthorized use of a famous person’s image (real or fictional, dead or alive), and plain-old falsehoods.

There are a lot of specifics when it comes to federal label rules, getting down even to the specific font-size for the government warning. Thankfully, the Tax and Trade Bureau (TTB) has issued product-specific manuals that go over all those specifics. Anyone designing labels should pay careful attention to these Beverage Alcohol Manuals (including, yes, a new and improved manual for wine labels). These BAMs can be found here for: beer, wine, and spirits.

 

Know How to Get Your Labels Approved by the TTB

To ensure that all these label rules are being followed, the federal government often requires that labels be screened by the TTB for approval. This review is known as a Certificate of Label Approval (COLA), and many labels cannot be sold in interstate commerce without getting a COLA.

There are some exceptions to getting a COLA: Beer products that are only being sold in the same state in which they are produced, and wine products with an alcohol by volume content of less than 7% both do not need a COLA. Wines and spirits that are only being sold in the same state in which they are produced will instead get a Certificate of Exemption from Label Approval.

But because receiving a COLA is often a requirement for a product to be sold, minimizing the delays in getting a COLA can be critical for a beverage alcohol supplier bringing new products to market.

Perhaps the best advice for getting a COLA quickly is to pay careful attention to the rules outlined in the CFR and scrupulously following the guidelines presented in the BAMS. It is also important to ensure your licensing information is correct — a discrepancy between your label and your federal basic permit, such as a missing trade name or a new address, is reason for the TTB to return a COLA application for correction. By using the “notes for reviewer” section, you can also help explain away some elements of your label that otherwise might raise an eyebrow.

Another key way you can avoid the COLA application process is to use the TTB’s guide for allowable revisions. These are changes that you can make to an approved label that do not require getting a new COLA. While there is no fee associated with applying for a COLA, and so it may seem free, there are still opportunity costs and the cost to the TTB for administering COLA reviews that make taking advantage of the allowable revisions process valuable.

 

Know How Things Work Among the States

By and large, states follow the rules and regulations outlined in the CFR regarding the allowable content of labels. So meeting those requirements should get you most of the way.

But there are some exceptions. A notable difference is statement on the alcoholic content of beer and table wines: where that is optional under the federal rules, a state could require it (e.g. Washington), or a state could specifically prohibit it (e.g. Mississippi). Such exceptions are rare, but the are something that a supplier entering a new state should make sure to look up.

Generally states are less particular about a label’s contents, trusting the COLA review for that. But they can still have intensive registration processes. For instance, states with franchise rules (rules that delimit a supplier’s ability to establish and amend the provisions of their agreements with distributors) will be more active in logging the details of a distribution arrangement.

As such, many states require more documentation than just a label or COLA for a brand label registration. They often want detailed descriptions of a distributors authorized territories, or even signed copies of a distributor agreement. Knowing what all a state may require when registering labels, and getting it all together ahead of time, can make the registration process much easier.

 

…And How Does it Work in Colorado?

Andres Zaldana, of the Colorado Brewers Guild, closed out the webinar, reviewing the registration process in Colorado.

As Andres noted, Colorado is one of the states that utilizes the Product Registration Online (PRO) system (a service that ShipCompliant by Sovos operates for state regulators). By working through PRO, beverage alcohol suppliers can easily get automatic approval for their labels in Colorado (other states using PRO may take longer to approve a registration), meaning they can sell those products in the state as soon as they have hit the “submit” button.

For Colorado-based brewers who only sell their beers within the state, however, there is a different system. Andres stressed that, instead of working through PRO, these brewers must instead use the “Alternative ‘Malt Liquor’ Product Registration” service, which is available here.

In recent years, Colorado has undertaken many initiatives to improve the registration process for beverage alcohol suppliers. This includes using modern online systems, like PRO, but also has entailed updating state regulations. One such change that Andres pointed out, was the removal of the 30-day waiting period for labels that were being imported into the state; as of August 1, these labels can now be sold as soon as they are entered into PRO.

The Colorado Brewers Guild works to promote the state’s craft beer industry, including by ensuring that the rules they operate under are both fair and complied with.

 

Remaining Questions

We always appreciate getting feedback and questions from our audience, but we are not always able to get to them or provide a complete answer in the webinar. As such, we have a follow up here:

The Craft Beverage Modernization and Tax Reform Act of 2017 changed the ABV limit for “table wine” for the purposes of calculating federal excise tax; what effect did this change have for labeling rules?

In the webinar, there was an interesting discussion about the proper definition of “table wine” for labeling purposes; this is an important distinction to recognize, as there are some differences for table wine and higher-ABV wines. Historically, the upper threshold for “table wine” has been at 14% ABV. While the CBMTRA did raise this threshold to 15% ABV, that change only affected the calculation of federal excise taxes. After reviewing documentation on the TTB’s website, it is apparent that for labeling regulations, including when a statement of alcoholic content is merely optional, “table wine” continues to be capped at 14% ABV. We apologize for any confusion on this subject.

You mentioned COLAs often when discussing state registrations, but what is the difference between a COLA and a state label registration?

A Certificate of Label Approval (COLA) is label registration with the federal government. Getting a COLA means that the TTB has reviewed your label and found that it meets the requirements found in the CFR. States can have their own, separate registration process, though. Generally this is less about getting approval for your label and more about informing the state about the labels you want to sell there, often including informing the state of your distribution agreements. Often a state registration will require supplying a copy of your COLAs. So having a COLA may be part of registering with the state, but getting a COLA and registering a label with a state are separate events.

If we only sell a wine into a state occasionally via direct shipping, what are our label registration requirements?

Registration requirements vary when it comes to suppliers making only direct-to-consumer (DtC) sales in a state. If you are selling across state borders, you do need COLAs for your labels, even if otherwise you only sell those labels in the same state where they’re produced. At the state level, the rules vary. Many states do not require registration of labels that are only being sold DtC, but some do. The rules vary from state-to-state, but they generally require only submission of a list of the brands you intend to sell DtC or the process is the same as any other label registration. For more information on DtC registration requirements, we recommend you check out our new state-by-state DtC Wine Shipping Rules pages.

If you change a label with an approved COLA in a way that is not listed on the TTB’s list of available revisions, what is the process for updating that COLA registration?

If you make changes to a label that are not in the list of allowable revisions, you will need to get a new COLA. This means submitting the label through COLAs Online and allowing the TTB to review the revised label. There are ways to make this easier, for instance by including a note to the reviewer indicating that a similar label had already been approved (include that COLA number) and pointing out the changes that you’ve made. While the old label’s COLA will remain valid, if you are permanently taking it out of distribution, you can surrender the old label’s COLA through COLAs Online iif you so choose. Instructions on surrendering a COLA can be found here.

 

Did you miss out on the webinar? Never fear – we recorded it for you! Head on over here to watch it in full.

The post What’s in a Label? Webinar Recap appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Pennsylvania Announces Simplification of DtC Wine Shipping Reporting

Mon, 08/27/2018 - 16:10

On August 27, 2018, the Pennsylvania Liquor Control Board (PLCB) sent out a notice to holders of a Direct Wine Shipper License (DWS) informing of a change in the state’s reporting requirements.

Effectively immediately, DWS licensees will no longer be required to complete the quarterly “by ZIP code” shipping report, including for any past reporting periods.  All other quarterly reports will still be required. These other reports include the Sales/Use Tax Return, the Excise Tax Return, and the “by product” shipping report.

The notice also states that the PLCB will soon be sending out license renewal notices for DWS licensees, and reminds DWS licensees that completion of all of their quarterly reporting requirements is a condition of that license renewal. 

The move is a part of a welcome easing of the regulatory burdens DWS licensees face, following up on the move by the state earlier this year to add a file upload service to its reporting system. ShipCompliant users can expect to see this change reflected in their accounts before the next filing deadline in October.

If you have any questions regarding the simplified reportings requirements or your license renewal, the notice indicates you should reach out to RA-LBLICENSINGMOD@pa.gov or call 844-707-5475. If you have any questions regarding your ShipCompliant account, please reach out to support@shipcompliant.com.

The post Pennsylvania Announces Simplification of DtC Wine Shipping Reporting appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup | Guidance for Importers claiming tax refunds, the California grape harvest begins, and the oldest physical traces of beer is found.

Mon, 08/20/2018 - 17:38

Before we get to this week’s Roundup, we want to give a quick shout of support for everyone out there dealing with the wildfires raging across the West. Last year was a terrible year for fires, and by all accounts this year has been no better so far. We give our fervent hopes that the winds keep quiet, the temperatures drop, and some gentle rain comes to relieve things.

In this week’s Roundup, we have a guest post from Wine Institute providing guidance on new health warnings California is requiring all sellers of alcohol (including DtC wine shippers) to use, there’s a interstate squabble in New England revolving around New Hampshire’s lack of taxes, so far this year the wine market is growing with DtC sales up 8% over last year, and what can the craft spirits industry learn from craft beer’s successes and failures.

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!

 

LegislativeUpdate

TTB Newsletter | Top stories include the Wine Beverage Alcohol Manual is back and better than ever and two new American grape varieties are now available for use. TTB

New Prop 65 Warning Requirements for Online Sales and DTC Shipments in California | On August 30, 2018, newly-amended Prop 65 clear and reasonable warning regulations that apply to any winery that sells and ships their products to consumers in the State of California come into effect. ShipCompliant by Sovos

Customs and Border Protection Interim Regulations For Refunds of Excise Taxes on Imported Beer, Wine and Spirits | Brief outline of proposed rules for parties to claim refunds on excise taxes for imported beer, wine and spirits in connection with the 2017 tax reform act. Alcohol Law Advisor

Alcohol a Factor In Fight Between Maine And New Hampshire Over Millions In Revenue | New Hampshire wants to sell more booze to out-of-staters so it’s offering them discounts — something Maine’s liquor agency dismisses as a “gimmick”. Press Herald

Will Wasteful State Spending Lead To Private LIquor Stores in North Carolina? |  In the coming months North Carolina politics might feature a fight over whether to end the state-run monopoly on liquor. News Observer

Exploring The Legal Ramifications of Wine And Week Events | How to navigate the regulatory hurdles of crossover activitations. SevenFifty Daily

IndustryUp

U.S. Wine Sales Up Despite Import Competition | Total sales increase by 2% to $2.9 billion, DtC up 8% over 2017 in typically slow season. Wines&Vines

California Wine Harvest Begins | Despite the gloomy air, producers are pleased as the 2018 harvest kicks off. Wine-searcher.com

US Cider Sector Enjoys Massive Growth; Although Education And Sector Consolidation Remain Key Challenges | As public demand for cider options continue to grow, creating an experience and showcasing diversity in the category will be the key to success. Beverage Daily

The Effects of Recent Global Wine Mergers and Acquisitions On The Industry | Changes in technology, business models and market structures are disrupting the global wine market and creating new sets of winners and losers among wholesalers, retailers and suppliers. Forbes

Winning Distributor Attention | Pushing this ocean of product through the chaos of a quickly changing and ever-consolidating distribution network poses monumental challenges for all suppliers and distributors alike, even the largest and most-disciplined. Wine Industry Advisor

JustFun

Selling Wine Without A Tasting Room | Without a brick-and-mortar presence, small wineries have to work harder to reach potential customers. SevenFifty Daily

Spirits, Beer And Lessons To Be Learned | The craft movement has taken over the world of drinks. As the number of artisan producers rises every week, could spirits learn a thing or two from their lower abv partner in the beer world? Spirits Business

Ancient Ceramic Cups Reveal Oldest Direct Evidence of Beer In Mesopotamia | Researchers are working on resurrecting the recipe. Smithsonian Magazine

Creating Labels That Stand Out On The Shelves | Measuring design effectiveness with the “Opt-in Design Category Audit”. Wine Business

Tapping the Future | In the right situations, wine on tap is hitting its stride. Beverage Media Group

 

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 | Guidance for Importers claiming tax refunds, the California grape harvest begins, and the oldest physical traces of beer is found. appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Iowa and Minnesota Post New Sales Tax Nexus Rules That May Affect DtC-Selling Wineries

Thu, 08/16/2018 - 10:07

In June, the United States Supreme Court ruled on South Dakota v. Wayfair, a case with major implications for eCommerce. Briefly, the ruling permits states to now impose sales tax liability on businesses regardless of where the business is located.

At the time of the ruling, we wrote that the effects of this ruling on the direct-to-consumer (DtC) wine market would only come out in the future, as most states that permit DtC wine shipments already required the sellers to collect sales tax. DtC wine shippers would only face a change if  the handful of states that did not condition getting a DtC license on being a sales tax collector acted on the Wayfair ruling.

Well, now, less than two months later, we can now say that the Wayfair ruling has begun to impact the DtC wine market.

In recent weeks Iowa and Minnesota have issued notices from their respective revenue agencies indicating that in the coming months they will require remote sellers to collect and remit sales tax on sales they make into the state. This is notable because currently Iowa and Minnesota are both among the handful of states that do not require DtC wine shippers to become sales tax collectors.

DtC wine shippers selling into Iowa and/or Minnesota should therefore be aware that come January 1, 2019, and October 1, 2018, respectively, their tax liability in these states may change.

 

What Exactly Is Going On?

A key principle undergirds state regulations: a state should not be able to burden a person or business that does not have sufficient contact with the state (which makes sense, you don’t want Texas charging you for speeding in California). The shorthand phrase for this sufficient contact is called “nexus”, and for decades the standard for the nexus under which a state could require a business to collect sales tax was what is known as “physical presence” nexus, as set forth by the Supreme Court in the 1992 case, Quill v. North Dakota.

Ever since the Quill ruling, states have tried to stretch physical presence as much as possible. Over the years, more and more of the retail market has been diverted to “tax free” Internet sales, which lead states to stretch physical presence even more. (Internet sales are seen as “tax-free” because most online sellers sell into states other than the one(s) they have physical presence in, and therefore they are not obligated to collect sales tax — in such cases, the consumers were obligated to pay their states’ “use” tax, so they weren’t actually tax free). Eventually, the stretching became an outright effort to overturn Quill and physical presence nexus, all leading to the Wayfair decision.

Problematically, the Wayfair ruling did not actually set up a new standard for nexus, it instead merely erased the previous physical presence rules. So states now have a much more open field to play with when it comes to establishing tax requirements.

The new playing field permits states to require business who have no direct, physical connection to the state — “remote sellers” — to pay sales taxes on their sales into the state. DtC wine shippers, selling wine across state borders from, say their Napa-based winery to a resident in Des Moines, are remote sellers and so will be affected by these new rules as much as any other eCommerce business.

Positively, there is a common pattern for the new nexus rules that states are setting up, including protection for small-scale sellers, uniform reporting processes, and prohibiting retroactive tax collection. However, there are enough particularities that it makes sense to walk through each state individually.

(At Sovos, we have extensive expertise in all things sales tax. If you want a broader, non-DtC wine focused view of the Wayfair ruling, and its impact on eCommerce, we recommend you look at our blogs and webinars available here.)

 

Minnesota

In 2017, Minnesota passed a bill establishing a sales tax requirement on remote sellers. At the time, the bill was in direct violation of the physical presence nexus rules that used to be in effect. However, with the Wayfair ruling, these rules became enforceable.

As such, the Minnesota Department of Revenue (DOR) recently posted a basic notice for remote sellers on its website, but most people will likely find its FAQ more informative. The key things to know about Minnesota’s upcoming requirements for remote sellers are:

  • Qualifying remote sellers will be required to register with the Minnesota DOR and begin collecting sales tax on their sales to the state by October 1, 2018.
  • Minnesota has a state sales tax rate of 6.875%, with local municipalities able to impose up to an additional 1.5%.
  • Minnesota is a “destination-based” tax jurisdiction, meaning tax is assessed at the location where the customer takes possession of the goods.
  • Marketplace Providers (who provide an online environment for third-party sellers to make sales to customers, like eBay or Etsy) are required to collect and remit sales tax on behalf of their users. Remote sellers are personally responsible for collecting sales tax on sales made outside of such Marketplaces.

 

Iowa

Iowa passed its remote seller nexus rules only in May, clearly anticipating a positive ruling from the Supreme Court. Well, things went their way, and the state is now gearing up for enforcing these rules. A notice from the Iowa DOR is available here. The key details for Iowa’s remote seller nexus are:

  • Qualifying remote will be required to register with the Iowa DOR and begin collecting sales tax on their sales to the state by January 1, 2019.
  • Iowa has a state sales tax rate of 6%, but municipalities can impose up to an additional 1%.
  • Iowa is a “destination-based” tax jurisdiction, meaning tax is assessed at the location where the customer takes possession of the goods.
  • There is a small seller exception, so these rules will only apply if you are a remote seller who during the current or previous calendar year makes:
    •  $100,000 or more in revenue from their sales to Iowa; or
    • 200 or more separate sales transactions.
    • Note: It is unverified at this time whether these threshold numbers only apply to retail sales, or if sales for resale may count. That the rules relate to “retailers” indicates that only retail sales should apply, but this is as yet unconfirmed by the state.
  • Marketplace Providers again are obligated to collect and remit sales tax on behalf of their users.

 

And What Does This Mean For DtC Wine Shippers, Specifically?

It is very important to remember that these rules do not inherently apply to all DtC wine shippers. Wineries making DtC sales to these states should pay careful attention to the small seller exceptions; if you fall under these thresholds you will NOT be affected by these rule changes. ShipCompliant users who do meet the thresholds can at present find the necessary returns in their account, as soon as they become registered with the states DOR.

Indeed, many DtC wine shippers may be far from reaching the revenue thresholds in either state: according to our annual DtC report, in 2017 Iowa saw only $15 million in total DtC shipments; and Minnesota limits wineries to shipping only 2 cases per customer per year. This does not mean that no one will hit the revenue threshold, but it does indicate that the numbers of wineries who do could be limited.

However, there is still the separate sales thresholds that each state applies. Here, things are still a little hazy with the biggest open question being “what is a ‘separate sales transaction’”?

This matters because it’s not always clear when a transaction has happened. One-off sales may be clear, but what about club or subscription sales? Is there a transaction each time there’s a payment of money, or each time a package is shipped? Would a winery who charges each time it ships a wine club order be making more separate transactions than a winery who charges only once per year, even if they ship the same amount of wine at the same frequency.

And, while Minnesota’s rule seems to include only retail transactions, Iowa’s is less clear — it’s possible that a wineries sales to Iowa wholesalers for resale could be included in these thresholds. (Though we do want to caution, based on past experience it is unlikely that the state will take that position.)

Due to the uncertainty in some of these rules and how they may apply to the specific conditions of some wineries (for instance, large, corporate wine groups making many sales across many platforms will have to deal with the small-seller thresholds differently than a single-shop operation), it is highly recommended that you consult with counsel or accountants before registering as a sales tax collector in either Iowa or Minnesota.

 

Final Thoughts

In a way, DtC wine shippers are well positioned for this new post-Wayfair world of sales tax rules because they have been already dealing with these type of rules for years. Indeed, ShipCompliant by Sovos was founded in large part to help wineries with their interstate sales tax compliance, and it remains a key part of our platform today.

But that does not mean that DtC wine shippers are immune from the changes in state sales tax rules that are coming down the line. These notices from Iowa and Minnesota are proof of that. Going forward, the remaining states that currently do not require DtC wine shippers to collect sales tax, but could if they change their nexus requirements, are: Colorado, Florida, Missouri, and Nevada.

Similarly, there are states that do not require DtC wine shippers to collect local tax (like Texas), or those that impose a tax other than sales tax (like Kansas with its “Occupational Tax”). Depending on if, and how, they change their nexus rules, DtC wine shippers could be caught up in their novel tax schemes.

As tax policies change, and as states change their rules to reflect those policies, it is critical for businesses to stay ahead of the change. This often necessitates using tools designed to navigate the complicated regulatory systems.

ShipCompliant by Sovos is committed to providing the support that the DtC wine market needs to meet its regulatory needs, including by informing the market of important rule changes and maintaining a cutting-edge system designed to meet the evolving regulatory environment. We encourage you to follow this blog to get the information you need to stay compliant.

 

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

 

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New Prop 65 Warning Requirements for Online Sales and DTC Shipments in California

Mon, 08/13/2018 - 16:15

On August 30, 2018, newly-amended Prop 65 clear and reasonable warning regulations that apply to any winery that sells and ships their products to consumers in the State of California come into effect.  The new regulations (27 CCR § 25607.3 and 27 CCR § 25607.4)  require a Prop 65 Alcohol Beverage Warning language to be displayed on winery websites, on or in packages containing direct-to-consumer orders sent to a California address and in California winery tasting rooms.

Wineries that did not opt in to the 2014 Proposition 65 Consent Judgement negotiated by Wine Institute must use the new clear and reasonable Prop 65 Alcohol Warning language that includes a hyperlink to the OEHHA website.  Wineries, however, that opted in to the Consent Judgement may continue to use the current alcohol warning after the new regulations become effective on August 30, 2018.

Wineries that produce and sell products with can, lid and/or bottle cap liners containing BPA must also post the new Point of Sale BPA warning on their website and in California winery tasting rooms, and include the new Point of Display BPA Warning in or on direct-to-consumer shipments sent to a California address. As each winery has different practices, please consult your legal counsel or compliance department to determine if any of your products contain BPA. Written certification letters from your packaging suppliers and laboratory testing and analysis are methods that may help determine if any of your winery’s products contain BPA.

The chart and summary below provide a quick reference to the clear and reasonable warning regulations for Alcohol Beverages and BPA.

 

Direct-to-Consumer Shipments

For alcohol beverages shipped to consumers in California, the Alcohol Warning is required to appear on or in the shipping container or delivery package in a type size that is no smaller than the largest type size used for other consumer information on the product. In no instance may the alcohol warning appear in a type size that is smaller than 8-point. The warning message must be readable and conspicuous to the recipient prior to consumption of the alcoholic beverages.

  • Wineries not covered by the 2014 Consent Judgement must use the new Alcohol Warning language.
  • If the product contains BPA, the new Point of Display BPA Warning must also be included.
Website and Catalogs

The Alcohol Warning must be prominently displayed on the website so that the consumer sees the warning on their website prior to completing the purchase.  OEHHA does not consider a warning to be “prominently displayed” if the consumer has to search for the warning on the business’s website. Note that wineries are not required to display a warning to consumers outside of California.

  • Wineries not covered by the 2014 Consent Judgement must use the new Alcohol Warning language.
  • If products contain BPA, the new Point of Sale BPA Warning must also be included.

For more details see the updated PROPOSITION 65 CLEAR AND REASONABLE WARNINGS QUESTIONS AND ANSWERS FOR BUSINESSES: INTERNET AND CATALOG WARNINGS on the Office of Environmental Health Hazard Assessment California Environmental Protection Agency (OEHHA) website which you may access here.

 

California Winery Tasting Rooms

The Alcohol Warning should be provided using one or more of the following methods:

  • An 8 1/2 by 11-inch sign in no smaller than 22-point type, placed at eye level so that it is readable and conspicuous to customers as they enter the area or areas where, by permit or license, alcoholic beverages are served.
  • A notice or sign no smaller than 5 by 5 inches placed at each retail point of sale or display so as to assure that it is readable and conspicuous. The warning message must be in a type size no smaller than 20-point type and be enclosed in a box.
  • For alcoholic beverages provided for consumption on the premises served by food or beverage persons, or sold through an over-the-counter service, the warning message is provided on a menu or list identifying the alcoholic beverages served on the premises. If there is no menu or list identifying the alcoholic beverages served on the premises, then the warning message is provided on the menu or list identifying the food or other beverages sold on the premises.

Wineries not covered by the 2014 Consent Judgement must use the new Alcohol Warning language. If the products offered for sale contain BPA, the new Point of Sale BPA Warning must also be displayed.

Businesses with fewer than 10 employees are exempt from ALL Prop 65 requirements. Therefore, qualified businesses are not required to provide BPA and Alcohol warning signs.

 

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BevAlc Roundup | Oklahoma releases application for October DtC wine sales, craft brewers see stable mid-year sales, and a millennia-old wine jar factory found in Israel

Mon, 08/06/2018 - 16:31

It’s August, meaning the grape harvest has begun and planning for the winter season is in full swing. Why not take a quick break to read our Roundup? This week, we have a couple of in-case-you-missed-it pieces from the main ShipCompliant feed on changes for DtC shippers to Oklahoma and Pennsylvania. We also look at some court cases that have the potential to greatly expand interstate DtC shipping for retailers, big news in the world of wine reporting as Wines & Vines Magazine and Wine Business Monthly announce plans to merge, and scientists have confirmed it: water and whisky mix well.

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!

 

LegislativeUpdate

TTB Newsletter | Top stories include Permits Online 5.0 is finally here! The new system is designed to simplify your experience in submitting new applications and managing your existing accounts. TTB

Oklahoma to Open for DtC Wine Sales Sooner Than Later – Application Now Available | On October 1, 2018, new rules permitting licensed wine manufacturers to make direct-to-consumer (DtC) shipments to Oklahoma residents will become effective. ShipCompliant by Sovos

Pennsylvania Clarifies Age Verification Rules For DtC Shippers | The PLCB recently published a supplementary advisory notice, clarifying age verification requirements that Direct Wine Shipper (DWS) licensees must fulfill as a condition of their license. ShipCompliant by Sovos

Supreme Court has Chance To Decide If States Can Discriminate Against Wine Retailer Shipping? | Are there any circumstances under which the dormant commerce clause of the U.S. Constitution protects retailer and wholesalers from discriminatory state liquor laws? NAWR

TTB Issues Guidance on Transfers of Beer between Breweries of Different Ownership |

Last week, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published a TTB Procedure governing the transfer in bond of beer between breweries of different ownership. Alcohol Law Advisor

Retailers Spar With Total Wine Over Coupons | An amendment to Massachusetts law that would allow discounts is being resisted by independent store owners. Wine-searcher.com

With 3.2 Beer Brands Likely To Disappear, Lawmakers May Have To Act Or Face A Ballot Initiative | Utah lawmakers may be forced to deal with disappearing beer brands and move heavier alcohol content brews into grocery and convenience store shelves. Fox 13 Salt Lake City

IndustryUp

Despite Smoke, Vintners Positive In Napa, Sonoma | As vines progress through veraison, reports remain positive about the coming 2018 harvest. Wines&Vines

Mid-Year Growth Pace Remains Stable For Small And Independent Brewers | Production volume for the craft segment increased five percent during the first half of 2018. Brewers Association

A Change At The Heart Of The Wine Trade 100 Years In the Making | Wine Business Monthly and Wines & Vines Magazine will be merging, with Wines & Vines Magazines being folded into Wine Business Monthly. Fermentation

Carriers Trashing Wine Shipments | UPS and FedEx are confiscating and disposing of some wines shipped from New York retail stores to customers out of state. Wine-searcher.com

10 Things Keeping Wine Executives Up At Night — And Ways To Sleep Better | The rewards and challenges of growing, making, and selling wine can be numerous for grape growers, winery owners, and executives. North Bay Business Journal

JustFun

Israeli Archaeologists Discover Massive 1,800-Year-Old Wine Jar “Factory” | The remains of around 100,000 broken or flawed jars were also discovered. VinePair

Chardonnay Voted America’s Favourite Wine | Having once been associated with Bridget Jones mid meltdown, Chardonnay has risen phoenix-like from the ashes to become the most popular wine in America. The Drinks Business

Exploring Oregon’s Tasting Room Of The Future | The tasting room of the future may include an Olympic kitchen and miles of marble counters, or it may look like an airport terminal that dropped down into an AVA. Oregon Wine Press

When The 3-Tier System Works As It’s Supposed To, It’s A Beautiful Thing | This was a great example of how it can work for everyone, and why wholesale distribution should be a benefit to a winery’s direct sales, and vice versa. Tablas Creek Blog

Chemists Say Watering Down Whisky Improves The Taste | Science has confirmed that the whisky purists are right. Cosmos Magazine

 

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 | Oklahoma releases application for October DtC wine sales, craft brewers see stable mid-year sales, and a millennia-old wine jar factory found in Israel appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Oklahoma to Open for DtC Wine Sales Sooner Than Later – Permit Now Available

Thu, 08/02/2018 - 14:01

On October 1, 2018, new rules permitting licensed wine manufacturers to make direct-to-consumer (DtC) shipments to Oklahoma residents will become effective. On that date, Oklahoma will become the 45th state (plus D.C.) to license DtC wine shipments, with only Alabama, Mississippi, Kentucky, Delaware, and Utah remaining closed to DtC wine shipping.

The application to become a licensed Direct Wine Shipper in Oklahoma is also now available (find it here). However, wineries will have to wait for October 1 to begin shipping wine DtC, even if they get a license prior to that date.

That date will have been a long time coming, as Oklahoma residents voted to permit DtC wine shipments as part of an omnibus revamp of the state’s beverage alcohol regulations back in 2016. Belying its nickname, the state delayed implementation of the law as state regulators worked to smooth out the details of how DtC wine shipping would operate.

Indeed, this delayed implementation period has been productive, as DtC wine shipping advocates have worked with the state to remove certain restrictions that would have severely hampered DtC wine shipping in the state, such as a requirement that consumers themselves had to get licensed, and a ban on shipping wine DtC that was otherwise available in the state.

There was even a rather dramatic earlier this year, when Free the Grapes! organized a last minute signature campaign to pass a bill that would have imposed likely fatal restrictions on carriers fulfilling DtC wine shipments. Due to efforts of Free the Grapes! to get hundreds of Oklahoma residents to write to the Oklahoma governor expressing their interest in the bill, DtC wine shipping should proceed a pace — proof that your efforts to support DtC advocates like Free the Grapes! and Wine Institute work.

 

What Do Wineries Need To Know About Shipping DtC When Oklahoma Opens?

Like every other state that permits DtC shipping of wine, there will be some restrictions that shippers must comply with.

For shipping DtC to Oklahoma residents, shippers will have to:

  • Be licensed as a wine producer by their home state and hold a federal Basic Permit for the production of wine issued by the TTB.
  • Hold a Direct Wine Shipper license issued by the Oklahoma Alcohol Beverage Laws Enforcement Commission (ABLE Commission).
    • The application form is now available from the ABLE Commission (find it here). Wineries will need to provide a copy of their home state wine production license, along with extensive information on their corporate structure; financing sources (if applicable); and individual personal history for partners, corporate officers, directors, stockholders, LLC officers, trustees, and other individuals involved in the winery. This could be a lengthy application process so wineries looking to start shipping wine DtC to Oklahoma residents right away on October 1 should begin soon.
    • The Direct Wine Shipper license costs $300, and must be renewed annually for a cost of $150.
  • Not ship more than 6 9-liter cases of wine to any one person in Oklahoma per year.
  • Ship wine only in packages clearly labeled with the words, “CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY.”
  • Use only delivery services that will obtain the signature of a person aged 21 or older at the time of delivery.
  • File an annual report with the ABLE Commission detailing (in a manner to be determined by the ABLE Commission at a later date — we will provide details when we know them) the total amount of wine they shipped into Oklahoma in the previous year.
  • Collect and remit both excise and sales tax on all their DtC sales to Oklahoma residents. These taxes must be calculated as if the sale occurred in the state (meaning both state and local sales taxes will apply). These taxes must be remitted to the state annually.
    • Oklahoma imposes an excise tax on wine of $0.72 per gallon.
    • Oklahoma has a state sales/use tax rate of 4.5%, with additional local rates ranging from 0-7%.
  • Maintain records of their DtC shipments to Oklahoma, in case of an audit from the ABLE Commission.

ShipCompliant by Sovos will be updating its system in time for the October 1 date. Current users can expect these updates to appear in the system in the weeks leading up to the effective date. However, shipments of wine to Oklahoma will not be cleared for compliance until October 1. ShipCompliant users will thereafter be able to track their DtC wine shipments to Oklahoma, check them for compliance, lookup address-specific tax rates, and receive populated tax and shipping returns as required by the ABLE Commission.

 

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

The post Oklahoma to Open for DtC Wine Sales Sooner Than Later – Permit Now Available appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Pennsylvania Clarifies Age Verification Rules for DtC Shippers

Wed, 07/25/2018 - 16:45

The Pennsylvania Liquor Control Board (PLCB) recently published a supplementary advisory notice, clarifying age verification requirements that Direct Wine Shipper (DWS) licensees must fulfill as a condition of their license.

According to the notice, DWS licensees must meet two requirements regarding verifying the ages of their Pennsylvania customers:

  • Use only delivery services that will verify the age of the package recipient at the point of delivery and will refuse to deliver to anyone under the age of 21. This requirement is effective immediately.
  • Establish an “age gate” on their website that requires everyone visiting the site to affirm that they are 21 years of age or older. The PLCB recommends this gate is in place when a visitor seeks to initially access the site, but will permit the age gate to be in place at checkout. Further, the PLCB requires DWS licensees to have all Pennsylvania purchasers ordering by phone to affirm their age and identities when making an order. DWS licensees must meet this requirement by January 1, 2019.

These requirements replace earlier statements by the PLCB that it would have required DWS licensees to use online age verification services by January 1, 2019. That process can be complicated and expensive, so these new, easier-to-meet requirements are welcome news.

Indeed, both requirements are already standard in the direct-to-consumer wine market.

Both FedEx and UPS have protocols in place that require that delivery of wine can only be made to someone who is present at the time of delivery, who will sign for the package, and who will present identification verifying they are of legal age to possess alcohol.

The PLCB notice also addresses reporting requirements for DWS license holders, and a prohibition on DWS licensees selling any wines that they do not produce. However, this supplement does not change the PLCB’s previous statements on these issues. You can read about the reporting requirements here.

The PLCB notice does restate that the PLCB will evaluate how well any DWS licensee is complying with all their requirements when renewing those licenses. As such, all DWS licensees should pay close attention to what the PLCB is requiring. If you are concerned about your own compliance needs, contact ShipCompliant by Sovos today to see how we can help you.

 

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

The post Pennsylvania Clarifies Age Verification Rules for DtC Shippers appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup | WSWA announces its position on marijuana, tasting room sales support sales in wine stores, and hybrid grapes are a growing trend

Mon, 07/23/2018 - 16:01

Summer is now in full swing and things are getting quite hot! So why not cool down a bit with the BevAlc Roundup? This week we look at an interesting recent First Amendment case out of Missouri and what its impact on other challenges to beverage alcohol regulations could be, Tom Wark cautions wineries to be careful around offers that sound a bit too good, we get an early preview of what’s looking to be a banner California harvest, and some recent discoveries show that rum may have had its start in the East Indies before moving to the West.

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!

 

LegislativeUpdate

TTB Newsletter | Top stories include new CMBTRA guidances for transfers between breweries and Permits Online will be closed July 26-30. TTB

A New Virginia License Signal Potential Advancement for Online Beer Sales | Virginia’s new Internet Beer Retailer license opens up the chance for retailers without store fronts to sell to customers in the state. ShipCompliant by Sovos

Federal Court Rules Against State Liquor Statutes And Regulations Without A 21st Amendment Analysis | In a potentially groundbreaking case a federal district overturned a state’s regulations and statute that restricted alcohol advertising practices. Irish Liquor Lawyer

Whiskey Summit Planned In Hopes Of Defusing Trade Conflicts | Concerned that global trade disputes could escalate – with Kentucky bourbon makers caught in the crosshairs – the industry has invited whiskey associations from across the world to discuss ways to defuse the conflicts. Washington Times

Why Wine And Spirits Wholesalers Are Speaking Out About Marijuana Legalization | The links between alcoholic beverages and marijuana are not new, with wine publications writing about cannabis sommeliers, experts offering suggestions for weed and wine pairings, and some wineries even producing legal “weed wine,” a product that infuses marijuana into alcohol-free wine. Forbes

TTB Labeling (A Brief History) | The TTB has struggled over the years to provide consumers with useful information while balancing the needs of beverage producers. Spirited

IndustryUp

Scams and Frauds In the Wine Business — Be Watchful | Scams that are much more difficult to get to the bottom of are those are undertaken by a real person you are working with; a person who appears to have the knowledge and contacts and ideas that represent them well and will help you and your business. Fermentation

Early Reports Put 2018 Harvest At Above Average | California wine industry maintains an optimistic view, larger wineries sitting on full inventories. Wines and Vines

Do Tasting Rooms Steal Sales from the Wholesaler? | If you and your wholesaler have an enlightened view, you will view each as integral to success and in that reasoned world where we all get along, you will want to offer some wines that are in distribution. SVB on Wine

How Do Wineries Beat The Amazon Effect — Customer Centric Shipping | For too long fulfillment has been seen as an operational cost versus a marketing activity. Medium

Oregon Wineries Step Up, Outside Players Move In | Mergers and acquisitions, plus explosive growth of brands, transform the state’s industry. Wines and Vines

JustFun

In Wine and Critics, Populists Find an Easy Target | Studies keep drawing the conclusion that people like cheap wines best and should not trust experts. But the findings say more about fears than tastes. New York Times

Forget the Caribbean: Was Rum Invented In India? | Newly discovered evidence suggest that rum production predates the Caribbean by at least 1,000 years and may have actually started in South East Asia. The Daily Beast

The Emergence of Non-Vinifera Wines | A pioneering group of American winemakers are demonstrating the potential of hybrids. SevenFifty Daily

What Is Carbonic Maceration, and Why Does It Taste So Damn Fun? | This fermentation technique makes zippy, juicy wines that we can’t stop drinking. Bon Appetit

 

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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Sovos Announces Resource to Track Direct-to-Consumer Wine Shipping Rules

Mon, 07/16/2018 - 16:17

Sovos is excited to announce the launch of our new ShipCompliant Direct-to-Consumer (DtC) Wine Shipping Rules resource center. Wineries can use this tool to track the compliance obligations they have in any state where they currently sell their products. They can also review the requirements in any new state they hope to enter.

The DtC market has seen tremendous growth in the last ten years, topping $2.6 billion in sales in 2017, as was reported in the annual Direct-to-Consumer Wine Shipping Report. This growth seems poised to continue as states, wineries, and consumers embrace this channel. For example, Pennsylvania legalized DtC wine shipping only in 2016, but it has already catapulted into the top 10 destinations for shipments.

Despite this surge, DtC wine shipping is still not accepted in every state. A handful states do not permit it outright, while a few others take the middle road and only allow DtC shipping only when consumers have made their purchases while on-site at a winery’s tasting room.

These varying – and often complex – rules create a complicated landscape for wineries looking to sell through the DtC channel. The goal of the ShipCompliant DtC Wine Shipping Rules resource center is to enable wineries to ship wine direct-to-consumer with the confidence they are in compliance by arming them with the right information and resources.

The DtC Wine Shipping Rules page allows users to select states using an interactive map. Each state page offers an authoritative look at what wineries can expect when they sell wine DtC to those areas, for instance, which licenses they will need to apply for, which taxes they will need to charge, and any restrictions on the products that can be shipped DtC.

 

About ShipCompliant by Sovos

Sovos offers a nimble software solution tailored to the unique compliance obligations faced by beverage alcohol businesses. As part of the Sovos suite of solutions, ShipCompliant users have access to constantly updated, accurate regulatory information for each of the jurisdictions in which they have compliance obligations.

Sovos’ ShipCompliant platform is the leading compliance and technology platform, automating registrations, tax calculations and reporting in the heavily regulated beverage alcohol industry. With ShipCompliant by Sovos, wineries, breweries, distilleries and other beverage alcohol companies can stay ahead of the latest regulatory changes impacting their business models. Learn more at http://sovos.com/shipcompliant.

The post Sovos Announces Resource to Track Direct-to-Consumer Wine Shipping Rules appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

State Spotlight: A New Virginia License Signals Potential Advancement for Online Beer Sales

Thu, 07/12/2018 - 11:14

July 1, 2018 was a rather busy day for alcohol beverage regulations in the state of Virginia. Over a dozen different provisions were set to come into effect for the second half of 2018. Of these new and amended rules, several affect beer, wine, and spirits suppliers directly, such as:

  • An increase in the initial fee for an application from $65 to $195; along with an increase in the annual fee for Direct Wine and Beer Shippers from $95 to $230.
  • A requirement that all beer and wine being delivered to instate retailers for sale to consumers must now first come to rest at a Virginia wholesaler’s location for no less than four hours.
  • A new limit on breweries selling beer for on-premises consumption; going forward, no less than 20% of such sales in a year must come from beer produced on the licensed premises. (This rule doesn’t come into effect until January 1, 2019.)

Among these bills, one really stood out for its relative novelty, though it remains to be seen how much impact the rule change will really have. This new law was Senate Bill 695, which creates a new type of license for Virginia, an Internet Beer Retailer. Under the rules of SB 695 (now entered as Section 4.1-208(10) of the Virginia Code), licensed Internet Beer Retailers may now ship beer products directly to Virginia consumers.

This begs the question, though: What is an Internet Beer Retailer?

Thankfully, SB 695 included a new definition for this licensee, which is someone who maintains a place of business (1) that has adequate storage space, (2) where they can receive orders and payment by internet or phone, and (3) that is “not a retail store open to the public.” Essentially, this is only available to people who operate warehouses from which beer can be shipped from, which are not otherwise open to the general public.

 

What Makes the Internet Beer Retailer License Different?

It might help to have a little background to understand the novelty of this license. Despite the great strides that have created the modern eCommerce world, the realm of direct to consumer (DtC) sales of alcohol is still rather limited by regulatory restrictions. (For context, by “DtC” we mean when a customer is able to directly order alcohol for personal use from a seller, either while on the seller’s premises or remotely, which the seller is permitted to have delivered to the customer’s residence or place of business by a common carrier.)

Currently, six states outright prohibit or severely restrict DtC sales (Alabama, Delaware, Kentucky, Oklahoma, Mississippi, and Utah; though Oklahoma will open up in October 2018). Of the remaining states, most only permit wine manufacturers to ship wine. Ten states will license retailers, both in-state and out-of-state, to make DtC orders to their customers, though mostly only for wine. Only seven states (and D.C.) permit DtC sales of beer, and only three of those permit DtC sales of spirits (Nebraska, North Dakota, and New Hampshire — Kentucky enacted its own attempt to expand DtC sales of spirits earlier this year, but its effect is, as yet, limited).

Virginia is already ahead of most other states in that it permits both retailers and breweries to engage in the DtC market. The Internet Beer Retailer license takes this a step further to enable businesses that are essentially only operating in the eCommerce market.

Now, this type of license is not without precedent. The Internet Beer Retail license follows closely in the steps of an existing Virginia license, the Internet Wine Retail license, which has been available for nearly a decade. And Virginia is not alone in having such licenses (it is still a lonely crowd of states). The California Type 85 “Limited Off-Site Wine Retail” license grants essentially the same permissions, though it only applies to sales of wine and is only available to businesses with a location in California.

Where the Internet Beer Retail license does seem to be forging new grounds, is in granting such permission to sales of beer. It also, helpfully, follows the Virginia Internet Wine Retail license by extending such permission to out-of-state entities, avoiding potential legal challenges under Granholm that the Type 85 license might be open to.

But extending permission to out-of-state entities does present an interesting question: how will they operate in their home state? Presumably, an Internet Beer Retailer operating from outside of Virginia would need some sort of license from their home state, something that would enable them to legally purchase alcohol from suppliers or wholesalers for resale without also requiring the holder to have a storefront open to the public — which is expressly forbidden by the rules of the Internet Beer Retailer license. Few states seem to have licenses that enable the holders to operate purely as remote retailers.

These limitations may inhibit the popularity of the Internet Beer Retailer license. Indeed, the Internet Wine Retail license may hint at a moderately tepid future market for the license: on the Virginia ABC’s license search tool, there are only around twenty active Internet Wine Retail licensees, all of them in-state (two out-of-state licenses are “pending”). This compares to over 1,100 active Wine Shipper licenses (the more standard DtC license available in Virginia).

Nevertheless, the Internet Beer Retail license is now available. It brings the potential for Virginia residents to purchase beer from more varied sources, and to seek out brands that may not be offered by their local brick-and-mortar beer retailers. Expanding the ability for consumers to engage in the wider alcohol market and have a greater availability of brands is a positive, which should make the entire industry stronger.

 

What to Know About Staying Compliant as an Internet Beer Retailer

Anyone looking to become licensed as an Internet Beer Retailer should be aware of the compliance requirements that this entails:

  • First and foremost, you must get licensed. The appropriate license, now available, is the Internet Beer Retailer, which costs $150 annually, plus the initial application fee of $195.
  • All applicants for Shipper permits must indicate at the time of application all brands that they intend to sell DtC — if the applicant does not own or have the rights to control the distribution of such brands, they must also file expressed written consent from the brand owner or other party who does control the distribution rights authorizing the applicant to sell those brands DtC.
  • Direct shippers may ship no more than 2 cases (288 ounces) of beer to an individual resident in Virginia per month.
  • Direct shippers must pay all applicable state taxes on their shipments to Virginia. These include both state and local sales taxes, as well as the state’s excise tax of $0.2565 per gallon. Accepting a sales tax obligation in Virginia is a requirement for getting licensed, even for out-of-state applicants.
  • Direct shippers must file a monthly report to the ABC summarizing each order made, including information on the recipient and purchaser, and the contents of the package shipped.
  • All packages containing alcohol must be labeled to indicate that they contain alcohol. Every delivery must be made to someone over the age of 21, who is available to sign for the package at the time of delivery. (It is important here to use qualified delivery partners who will ensure that this requirement is met.)

Each state has its own unique beer regulations. Make sure you know the rules everywhere you sell with our Brewer’s Guide to Compliance.

 

The post State Spotlight: A New Virginia License Signals Potential Advancement for Online Beer Sales appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup | Tariffs on whiskey come into effect, big beer loses market share, and why you should cheers the 4th with a glass of Madeira.

Mon, 07/09/2018 - 16:24

We all hope you enjoyed a fun and safe Fourth of July holiday last week! These hot summer days are typically a quieter time, but this week’s Roundup is rather busy, looking at the ill-effects a hotting up trade war will have on the beverage alcohol industry, why now is the best time to revamp your DtC wine sales programs, and, while major beer brands may be losing market share, American craft beer is increasingly capturing the rest of the world’s attention.

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!

 

LegislativeUpdate

TTB Newsletter | Top stories include a renewed promise to launch Permits Online v. 5 later this month. TTB

Caught In Tariff War, U.S. Distillers Fear Losing Out On Global Whiskey Boom | Distillers fear that a long boom in U.S. whiskey exports could be coming to an end. NPR

Trade War Worries For Winemakers | Could wine be the next victim in the brewing trade war? wine-searcher.com

Missouri Law Banning Truthful Advertising On Alcohol Prices Is Found Unconstitutional | Last week, U.S. District Judge Douglas Harpool issued a ruling agreeing that the state’s longtime ban on truthful advertising of alcohol prices is unconstitutional. River Front Times

Son Of Granholm Inches Closer | In the years since Granholm, lower federal courts have wrestled with the question of whether or not the Commerce Clause’s non-discrimination principle is limited to state laws imposing different rules on in-state versus out-of-state producers and products. Alcohol Law Advisor

IndustryUp

People Aren’t Super Excited About Beer Right Now | And wine sales are catching up! Food and Wine

What’s Killing Big American Beer? | More Americans are putting down Buds and Coors, instead grabbing wine, liquor, Corona, and Michelob. CNN Money

Flexibility And Confidence Key For Advancing Women In Wine | Offering flexibility and encouragement, and supporting women-owned business were key to advancing women in the wine industry, the Women of the Vine & Spirits’ inaugural London symposium revealed. Harpers UK

Slow Season For Your DtC Wine Club? Not Really: Summer Is For Strategy | Just because things move more slowly in summer, that doesn’t mean this isn’t a critically important period for wine clubs. Wine Industry Network

Direct Wine Sales: It’s Time To Rethink Loyalty Programs | As an industry, winery teams have continued to focus on club membership conversion as the number one direct customer acquisition path and it’s time to rethink this sales strategy. DTC Wine Workshops

The World’s Wine Industry Is Adapting To Climate Change | Climate change and its effects have led winemakers to explore new areas for vineyards and wineries, including Oregon’s Van Duzzer Corridor. CNBC

JustFun

A Toast To The Founding Fathers Should Include Their Favorite Drink | “It always amazed me that Americans had no idea their Founding Fathers drank more Madeira than any other wine,” says Broadbent, founder of Broadbent Selections, based in Richmond. Washington Post

Here’s Why Wine Makers Are Ageing Their Bottles Under The Sea | The underwater conditions — total darkness and constant temperature — are thought to accelerate the ageing process, adding complexity to the wine. Hindustan Times

We Asked 9 Somms: Is Natural Wine Overrated? | Fewer chemicals, less intervention, more environmentally friendly — nebulously defined “natural wines” hit a lt of touchstones for modern drinkers, especially sommeliers. VinePair

Not Just For Vikings: Mead Is Making A Worldwide Comeback | Far from being just a drink from the past, mead is becoming a “drink of the future” in the premium alcoholic beverages category, according to a report by GlobalData. Beverage Daily

Starting A Spirit Brand Without A Distillery | A drinks lawyer discusses product development, legal compliance, and getting to the market. SevenFifty Daily

America’s Craft Beer Diplomacy | Even in an era of “America First,” our beer isn’t enjoyed just in our backyards. It is a tireless and affable diplomat, beloved abroad no matter the conditions back home. New York Times

 

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 | Tariffs on whiskey come into effect, big beer loses market share, and why you should cheers the 4th with a glass of Madeira. appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

New eCommerce Platform Joins ShipCompliant’s Certified Partner Program

Mon, 07/02/2018 - 14:30

Sovos is pleased to announce its newest certified partner, Commerce7, a leading eCommerce platform in the beverage alcohol industry. Commerce7’s integration with Sovos’ ShipCompliant platform will allow wineries to ship wine direct-to-consumer with the confidence they are in compliance in a new, customer centric platform.

Larry Cormier, General Manager of ShipCompliant by Sovos, said, “We are excited about Commerce7 joining our certified partner program, as their solution is rightly focused on how to not just assist the winery, but also the winery’s clients through a user-focused platform. With more focus on eCommerce and wine club sales across the industry, it is important for us to add partners that will help grow this channel in a compliant manner. We are thrilled to be offering real-time compliance checks and the most granular alcohol-specific tax rates for every state and local jurisdiction to Commerce7 and their client base.”

Complex state requirements create a challenging environment for both regulatory bodies and wine sellers, culminating in compliance checks, which Sovos’ ShipCompliant platform automates for wineries shipping direct-to-consumer. To help businesses remain in compliance, ShipCompliant by Sovos has an extensive library of constantly updated, “rooftop level” accurate alcohol tax rates that pull in state and local tax rates for each customer, and forms required by each state and local regulatory agency. ShipCompliant by Sovos’ real-time tax rates and compliance checks via certified, integrated partners allow these wineries to grow uninhibited by compliance obstacles.

Commerce7 founder Andrew Kamphuis said, “We are excited about our partnership with ShipCompliant by Sovos. The ability to offer real-time compliance and alcohol-specific tax rates through the ShipCompliant platform saves time and reduces risk for our clients.”

Commerce7’s integration with Sovos’ ShipCompliant platform will give clients the ability to build their online presences focused on the end consumer. ShipCompliant by Sovos’ accurate and constantly updated tax rates allow wineries to remain compliant while growing their direct-to-consumer and wine club sales.

 

See how Commerce7 integrates with ShipCompliant. Request a Demo today!

 

About Sovos
Sovos offers a nimble software solution tailored to the unique compliance obligations faced by beverage alcohol businesses – ShipCompliant. Sovos’ ShipCompliant platform is the leading compliance and technology platform, automating registrations, tax calculations and reporting in the heavily regulated beverage alcohol industry. With ShipCompliant by Sovos, wineries, breweries, distilleries and other beverage alcohol companies can stay ahead of the latest regulatory changes impacting their business models. Learn more at http://sovos.com/shipcompliant.

About Commerce7
Commerce7 is a customer centric commerce for the alcohol industry. It is an eCommerce, Wine Club, and Customer Relationship Management (CRM) platform for DtC wine sales. Learn more at https://commerce7.com/.

The post New eCommerce Platform Joins ShipCompliant’s Certified Partner Program appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup | The impact of South Dakota v. Wayfair on DtC wine shipping, Pabst sues MillerCoors, and how to store wine bottles

Tue, 06/26/2018 - 10:39

It’s been a busy couple of weeks regarding regulatory issues, with both a major case coming from the Supreme Court that will impact all of eCommerce, and tariffs coming into effect against U.S. whiskey. On top of this, we also look at the fallout from the vote on Napa’s Measure C, a panel at the Vineyards Economics Symposium asks if it’s better to buy the whole vineyard or just the grapes, and Texas innovators look to bring regional-specific corn stock to whiskey producers.

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!

 

ShipCompliant Events

Sovos’ Technology Partner Manager, Curry Wilson, will be speaking at two events at the end of June on compliance issues and how you can use technology to create best practices for your winery wine expanding your DtC footprints. Other industry experts will also be presenting, so there is sure to be much for everyone to learn.

If you’re in the region, please consider attending. For more information, click below:

June 27th: Santa Barbara at Bridlewood Estate Winery

June 28th: Paso Roblas at Paso Robles Inn

 

LegislativeUpdate

TTB Newsletter | Top stories include the 2018 Satisfaction Survey opening — here’s your chance to give the TTB feedback. TTB

Supreme Court Rules That States May Tax eCommerce: What Does This Mean For DtC Wine Sales? | In a highly anticipated decision, the U.S. Supreme Court ruled yesterday that states may require online sellers to collect and remit sales tax regardless of where the seller is based. ShipCompliant

American Whiskey Makers Face Dreaded Reality: Tariffs | American distilleries large and small have watched warily as the threat of tariffs from Europe ratcheted up in recent weeks. CBS News

Uncorking the Cap: Law Would Make It Easier For New Jersey Drinkers to Buy Wine | Coalition of wineries, consumers and retailers cheer plan to get rid of current cap on amount of wine that can be shipped but liquor store alliance opposes the change. NJ Spotlight

The Alcohol Industry Gathers In Hawaii To Figure Out How To Enforce the US “Highly Archaic Regulatory Scheme” | Hawaii, with its surreal landscape, is a very fitting meeting place for NCSLA because the United States system of alcohol regulation is also undergoing geologic change and facing its own elves versus orcs moments. Booze Rules Blog

Examining The Fallout From Napa’s Measure C | After a tough battle, Liza B. Zimmerman looks at why Napa Valley’s agricultural bill didn’t pass. Wine-searcher.com

IndustryUp

Should Wineries Acquire Vineyards Instead Of Buying Fruit On the Open Market? | Speakers address trends during Vineyard Economics Symposium; Jan Krupp speaks on the sales of Stagecoach. Wine Business

MillerCoors and Pabst Brewing’s Bitter Legal Battle Is Headed To Trial In November | The center of the dispute is a decades-old agreement under which Miller Coords brewers all of Pabst’s legacy beers, including Pabst Blue Ribbon. CNBC

Wine Distributors Not Protected By Fair Dealership Law | In an unusual certification from the U.S. Court of Appeals for the Seventh Circuit, the Wisconsin Supreme Court has ruled (4-3) that “dealerships” with wine distributors are not protected by the Wisconsin Fair Dealership Law. Wisconsin Bar

Women Represent Big Opportunity For Beer Industry | Beer companies haven’t effectively marketed to women, and they’re leaving a lot of opportunity for increased sales on the table, according to Bridget Brennan, CEO of Chicago-based consulting group the Female Factor. Brewbound

JustFun

Examining America’s Emerging Wine Regions |  From the midwest to the southwest, winemakers are experimenting in new terroirs. SevenFifty Daily

Field Of Dreams: Texas Project Seeks New Corn Strains For Whiskey | A master distiller and a crop scientist who specialities in corn breeding are working on a project they hope one day will help bring local identities to American whiskeys. Reuters

“It’s Hip To Love Hops!” | Five consumer trends in craft beer. Beverage Daily

Rethinking the Role Of Wine Festivals In The Age Of Yelp And Instagram | Whether we sell them much wine this time around or not, festivals are part of the marketing of our region, and that investment is a long-term play. Tablas Creek Blog

Storing Wine On Its Side Is Nonsense, Says Scientist | Storing wine on its side won’t prevent corks drying out, and may even accelerate their degeneration, according to Amorim’s director of R&D, Dr. Miguel Cabral. Drinks Business

 

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 | The impact of South Dakota v. Wayfair on DtC wine shipping, Pabst sues MillerCoors, and how to store wine bottles appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Supreme Court Rules That States May Tax eCommerce: What Does This Mean for DtC Wine Sales?

Fri, 06/22/2018 - 11:22

In a highly anticipated decision, the U.S. Supreme Court ruled yesterday that states may require online sellers to collect and remit sales tax regardless of where the seller is based. While the immediate case, South Dakota v. Wayfair, only validates a rule passed by South Dakota in 2017, it will certainly have a major impact on all of eCommerce moving forward.

This case has major implications for eCommerce, and there is a lot to unpack in the Court’s opinion. For a fuller review of the impacts of Wayfair, we will be posting more information on the main Sovos feed, which you can access here. But many wineries selling direct-to-consumer (DtC) are concerned with how this could impact them, which we want to quickly address here.

 

How will Wayfair affect wineries?

In the immediate future, Wayfair will not have an adverse effect on DtC wineries. The Court’s decision only relates to the specific South Dakota law, which states that any seller making more than $100,000 in revenue or more than 200 separate transactions in a year must begin collecting and remitting sales tax on their sales to South Dakota.

However, DtC wineries are already required to collect and remit sales tax on their DtC sales to the state as a condition of getting their DtC license in the state. Essentially, these wineries were ahead of the game when it came to remote sales tax collections; going forward, other online sellers will need to do what DtC wineries have been doing since the state opened to DtC sales in 2016.

We can expect that many other states will soon follow South Dakota and enact their own economic nexus tax laws (as opposed to the “physical presence” nexus rules, which the Court deemed invalid). But here again, DtC wineries are already required to collect sales tax in most states where they can make DtC sales into.

There are a few states where the Wayfair decision could have an impact, however. States such as Colorado, Minnesota, Florida, and Missouri currently do not require DtC wineries to collect sales tax on their DtC orders, and so wineries would be in the same boat as other eCommerce sellers in these states. None of these states has as of yet passed a law similar to South Dakota, but once they do (and again, we have every reason to expect that to happen), then wineries would be impacted just like everyone else.

The Wayfair decision is still very fresh, and its full impact won’t be revealed for many months. Even when other states pass their own economic nexus rules, we can expect further litigation to hammer out what are the appropriate thresholds. Plus, there is always the possibility that Congress could act and again introduce its own standards.

As we learn more about the aftermath of Wayfair and how it is impacting the DtC wine market, we will make sure to keep you informed. We encourage you to subscribe to this blog for future posts and look at our sister blogs from Sovos, which will provide more background and details.

 

Want to know more about Wayfair? Get all your questions answered, as Sovos regulatory experts Chuck Maniace and Alex Koral host a live Q&A on June 27. Register today.

The post Supreme Court Rules That States May Tax eCommerce: What Does This Mean for DtC Wine Sales? appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup | Tariffs affect the industry, TTB levies its heaviest fine ever, and are regulations hampering the adoption of new technology?

Mon, 06/11/2018 - 18:25

We held our annual Wine Summit event on May 31, at the Napa Valley Marriott. The Summit was once again a fabulous occasion, full of regulatory updates, looks at market trends, and tips and tricks to improve DtC and three-tier sales. If you missed it, or just want to refresh your memory, read our follow-up post.

For this week’s Roundup, we have a special section looking into some foreign trade issues, including the latest on how tariffs are harming the industry. We then look at how efforts to open Delaware up to DtC sales are progressing, global trends in the sale of beer, and why weird, archaic, and super-local wine varietals are poised for a resurgence.

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!

ShipCompliant Events

Sovos’ Technology Partner Manager, Curry Wilson, will be speaking at two events at the end of June on compliance issues and how you can use technology to create best practices for your winery wine expanding your DtC footprints. Other industry experts will also be presenting, so there is sure to be much for everyone to learn.

If you’re in the region, please consider attending. For more information, click below:

Special Section: Trade and Exports News

Tariffs on Aluminum Are A Tax On Beer | This aluminum tariff will dramatically increase the manufacturing costs of American brewers and beer importers. Beer Institute

New Tariffs Risk Turning U.S. Whiskey Sour | An escalating international trade spat is driving up equipment costs and threatens to cut into profits from bottles exported to Europe, just as business is booming. Reuters

Trump Administration Seeks WTO Panel To Resolve Wine Dispute with Canada | The administration wants the WTO to set up a dispute panel to rule on its claim of Canada’s “discriminatory” practices in the province of British Columbia. CNBC

LegislativeUpdate

TTB Newsletter | Top stories include the release of the 2018 TTB Satisfaction Survey and an alternate procedure regarding the storage of tax-determined and non-tax-determined products. TTB

Retailers Fear Amazon Effect With Direct Wine Shipments | Wineries are major tourist attractions across the country. But vacationing Delawareans are in for a rude awakening if they decide to ship a case back home. Delaware Business Times

TTB Levies Largest Fine Ever | It’s been a big year already for federal agencies when it comes to dishing out fines — and a painful one for the recipients. Wine-searcher.com

Work To Open More States To DTC Wine Shipments Continues | State regulators zero in on illegal shipments. Wine Business

Why Can’t Native Americans Make Whiskey? | Outdated, paternalistic laws prevent tribes from taking part in the craft-spirits boom. The New York Times
IndustryUp

The Key Trend In The Global Beer Industry? “Drinking Less, But Drinking Better” | Beer drinkers are seeking quality or quantity, evidence by continued growth in premium, super-premium and craft categories. Beverage Daily

California Domestic Wine Revenue Successfully Endured A Decade Of Retail Flatness | It appears that California wine lost 3% of domestic market share to imports over the past decade, but in hard cash, its domestic wine revenue increased. Forbes

Growing DTC Wine Sales Locally and Digitally | An interview with Sandra Hess, Founder of DTC Wine Workshops Consulting Agency. Copper Peak Logistics

Secrets For Growing Direct-to-Consumer Wines Sales 2018 Videocast | On May 16, 2018, SVB’s Wine Division hosted a live videocast discussion of trends in direct-to-consumer wine sales based upon findings from a survey of more than 800 responses. SVB

JustFun

The Secret Trigger That Makes You Reach For Your Favorite Bottle Of Wine | As wine sales continue to climb in the U.S., vintners are incorporating augmented reality and other innovations in wine label design. CNBC

Why You Should Be Drinking Weird Wines | For years, the global wine industry had been devolving toward a monoculture, with local grape varieties ripped out in favor of more immediately profitable, mass-market types. The New York Times

The Slow Adoption of Technology In Wine Is Political | The single greatest deterrent to the wine industry becoming a full-fledged adopted of new economy tools isn’t a luddite’s aversion to the expanding digital toolbox. It is the anti-competitive, anti-consumer, and market-disabling state laws that champion barriers to trade. Fermentation

 

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The post BevAlc Roundup | Tariffs affect the industry, TTB levies its heaviest fine ever, and are regulations hampering the adoption of new technology? appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

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