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BevAlc Roundup | California to Increase Licensing Fees, Wine Economic Trends, and Improve Your Wine Descriptions

Tue, 07/23/2019 - 12:05

Now that it’s the middle of July, we can definitively say—it is hot out! Seemingly everywhere in the U.S. has been reporting record temperatures with little respite when the sun goes down. Wherever you are—whether out tending to grapevines or in an office—we hope you’re staying cool and well hydrated. (I think we can all be jealous of anyone who gets to spend lots of time in a cellar or cave tending the barrels!) Maybe you can find something to chill over with this week’s Roundup.

In this edition, we showcase a few changes being implemented by the TTB to ease your regulatory burden, and we review the latest reactions to last month’s Supreme Court decision in Tennessee Wines; we have tips on how to prevent churn in your wine club lists; and we look at what is going on with wine-beer hybrids and which are worth your time sampling.

In case you haven’t heard, the 2019 Direct-to-Consumer Wine Shipping Report is available for download. Get your copy today here.

Thanks for reading the Roundup this week. As ever, be sure to check out the rest of the ShipCompliant by Sovos blog for regular updates, and we’ll see you again in another couple of weeks.

Regulatory News and Discussions

TTB Newsletter | This week’s top news includes the establishment of the Crest of the Blue Ridge Henderson County AVA, information about a webinar on malt beverage formulas, how to register for our last TTB Trade Practice Seminar, and news that we recently certified 160 new individuals in our Chemist Certification Program. TTB

TTB Eases Rules For Making Changes to COLA Applications | The federal Trade and Tax Bureau (TTB) recently announced that it will enable a new “Conditionally Approved” status for Certifications of Label Approval applications. ShipCompliant

TTB Announces Real and Potential Regulatory Relief | During a week when most of us were busy with hot dogs and fireworks, the Tax and Trade Bureau (TTB) issued two announcements that could prove to bring real benefit to the beverage alcohol industry. ShipCompliant

Implications of the Supreme Court’s Tennessee Retailers Decision | The big question on the minds of many is whether future courts will strike down laws prohibiting out-of-state retailers and wholesalers from exercising the same rights and privileges granted to in-state retailers and wholesalers. Alcohol Law Advisor

More Lawsuits Follow Supreme Court Decision | Four new cases have been filed in an effort to open up interstate shipping for American wine lovers. Wine-searcher.com

CA ABC Licensing Fee Increases & Program Improvements | The California Budget Act of 2019 includes a multi-year plan to strengthen and modernize the Department of Alcoholic Beverage Control. California ABC

New California Online Privacy Law Threatens Small Wineries, Says One Vintner | When it comes to the onerous task of figuring out compliance, the law recognizes no difference between large technology companies and small wineries. Forbes

Industry Updates: Market Conditions and Developments

Wine Sales Up, Winery Hiring Down and Packaging Sales Trends | Steady growth in U.S. wine sales continued through June but shifts in the industry were evident in the kinds of packaging consumers are choosing and an ongoing moderation in hiring activity. Wine Business

How to Stop Losing Half Your New Winery Club Members in First 15 Months | Churn may make great ice cream and butter, but churn in winery club membership can sour a significant source of sales for many North Coast wineries. North Bay Business Journal

Consumers Are Drinking Less Wine. That’s Good For Wine Business, In Unexpected Ways | The wine industry could afford to take a new tack, which brings us to the counter-intuitive strategy of advocating for drinking less wine as a positive move forward. Forbes

When Will California Become Too Hot to Grow Wine Grapes? | Will climate change make some California regions unsuitable for fine wine grapes within our lifetime? San Francisco Chronicle

How to Build a Brand: Patience and Message Consistency Matter | Marketing campaigns in the wine industry typically include photos of beautiful wineries and discussions on terroir, vineyards and family history. Wine Business

Digestif

What Are “Oenobeers” And Which Ones Should You Try? | To create one of these brews, you take the must or juice of wine grapes and add that to malts of barley, wheat, or some combination therein. Uproxx

15 Helpful Words For Talking About Wine | Here is a practical lexicon that helps to describe the elusive characteristics of wine, without eliciting eye rolls and forehead slaps. New York Times

Horror Stories Brewers Lived to Tell | From lost batches to near-death experiences, brewers spill their most outrageous behind-the-scenes stories. SevenFifty Daily

 

Request a demo of ShipCompliant.

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TTB Announces Real and Potential Regulatory Relief

Wed, 07/10/2019 - 10:16

During a week when most of us were busy with hot dogs and fireworks, the Tax and Trade Bureau (TTB) issued two announcements that could prove to bring real benefit to the beverage alcohol industry.

Removal of Standard of Fill

First, on July 1, the TTB issued a press release announcing a deregulatory proposal that would eliminate the current requirements regarding the “standard of fill” for wine and spirits. The “standard of fill” is a term used by the TTB to specify the amount of liquid that wine and spirits containers are permitted to contain. Under these rules, all wine and spirits can be sold only in certain bottle sizes (such as 750, 500, 375, 100, and 50 milliliters—but not 400 or 600 milliliters). 

Under the proposed rulemaking, these specific amounts would be eliminated, leaving only a standardized minimum amount for wine, and a standardized minimum and maximum for spirits. If approved, thereafter, a wine or spirits producer would be able to fill any sized container above or within those thresholds, respectively. 

Besides being a welcome elimination of unnecessary regulatory requirements (as described by the TTB), this could expand the number and type of products made available to consumers. For producers who have worked to meet increased demands from consumers for wine and spirits in cans—and for more smaller-serving options—this change could be a particular boon. 

Currently wine may only be sold in cans sized 250 mL (and those only in 4-packs to reach a 1L “container”) or 375 mL. However, the standard can size in the U.S. is 12 oz, or 355 mL, which means that wineries are forced to source odd-sized cans, which can greatly increase the cost. But, if permitted to sell wine in a 12 oz can (as beer can be) or sell single 250 mL cans, they could better provide what consumers want: to be able to enjoy the wine they love in a more convenient and single-serving container.

The TTB is currently requesting that interested parties submit comments on the proposed rule changes through August 30, 2019, with submissions accepted here for wine and here for spirits.

Voluntary Disclosure Program

Then, on July 7, 2019, the TTB announced a new temporary voluntary disclosure program for beverage alcohol wholesalers or importers to correct unreported changes in their ownership schema. All parties importing alcohol into or distributing alcohol through the U.S. must be licensed with the TTB, which also requires them to report any changes to their control or proprietorship. 

However, it has become apparent in recent years, as the TTB has stepped up its enforcement of trade practice regulations, that many licensees have failed to report such changes. This has lead to a number of enforcement actions against wholesalers and importers. As such, this voluntary disclosure program is a welcome step by the TTB to enable parties that have, for one reason or another, failed to update changes in control or proprietorship to come into compliance with their license requirements without the risk of regulatory action.

This program is available to all industry members who are licensed by the TTB only as a wholesaler and/or importer, and who follow the procedures outlined here to disclose unreported changes to their control or proprietorship. The deadline to disclose such changes is December 31, 2019.

Summing Up

Both of these actions by the TTB should prove of benefit the industry. Providing wholesalers and importers a chance to freely update their licenses to indicate ownership changes could avoid many potential enforcement actions, relieving all parties of the cost in money and time those take. And if the proposed elimination of standards of fill becomes enacted, then wine and spirits suppliers could more effectively meet consumer thirst for alternative and smaller serving sizes. We at ShipCompliant by Sovos applaud these steps to relieve regulatory burdens.

 

ShipCompliant by Sovos is the only automated compliance tool integrated with the TTB. Find out how ShipCompliant helps producers stay in compliance with state and federal regulations, or download the 2019 DtC Wine Shipping Report.

The post TTB Announces Real and Potential Regulatory Relief appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Start Compliance Prep for Your Seasonal Beers Now

Mon, 07/08/2019 - 14:16

Right now, it’s easy to forget about the complex compliance process behind autumn and winter seasonal beers through the summer haze and its hazy IPAs. But breweries know these hot summer months are the best time to plan for those autumn and winter beers. Getting these beers to market can be time-consuming, and taking the first steps of label research and registration now can help ensure they’re on shelves in time.

Don’t let COLAs and state registrations set you back

Seasonal beers are a great way for brewers to explore and introduce new ingredients and flavors and capture the essence of a certain season. New beers bring new labels, often as unique and exciting as the beers they advertise. Before these beers cross state lines and consumers can enjoy them, they need certificate of label approvals (COLAs) by the Alcohol and Tobacco Trade and Tax Bureau (TTB). Now is the time to start submitting labels for the coming seasonal releases. Making sure a label is compliant and has all the correct requirements isn’t as enjoyable as taking a sip of a much-anticipated seasonal beer, but it’s an essential step in getting your products to market.

In the past, getting COLAs was sometimes a lengthy process that could hinder your timeline for getting products to market if you weren’t properly prepared. The TTB has shortened the processing and approval times. The new feature, further streamlines the process, so approvals and changes take days instead of months.

Once you’ve got COLAs handled, it’s time to look at state registrations. With requirements varying state-by-state, it can be a challenge to stay compliant. Some states have little to no requirements, while others have a bundle. Most states want a type of registration or notice that your products will be sold within the state lines at bars, restaurants and liquor stores. A handful of states have their own label requirements to which you must adhere, while others will accept COLAs as proof of compliance. With each state having different processes and steps to compliance, planning and preparing with the right tools is instrumental to getting your seasonal beer in the hands of consumers.

The importance of labels

With thousands of beers on the shelves, a distinguished label can really make a beer stand out. According to Consolidated Label Co., 66 percent of American craft beer buyers say that a beer’s package or label is “very” or “extremely” important for getting them to notice it, and 60 percent say the package or label is “very” or “extremely” important in convincing them to give it a try and buy it. With shifting demographics making millennials the largest consumer group for craft beer, bold and interesting labels are synonymous with successful beers.

New trends and themes continue to pop up. Traditional winter beer styles like stouts, porters, and imperials are expanding to include barrel-aged, winter IPAs and featured flavors of chocolate, coffee, eggnog and more.

An evil Santa, a mad elf and a ninja gingerbread man are just a few of the spirited and unique labels you’ll find while strolling down the beer aisle in the coming months. Now is the time to make sure your compliance process is in order to ensure your seasonal beer labels will be on the shelves too.

Advantages of automated compliance solution

Compliance is integral to your operation, but rarely the easiest part. Some of the common burdens around compliance include product management complexity, too much time dedicated to researching and keeping up to date on federal and state regulations, and delays in getting products to market from unpredicted compliance issues. Reducing the burdens of compliance and simplifying your process can give you significant advantages.

An automated solution can keep you ahead of competitors. ShipCompliant by Sovos’ Market Ready eliminates the compliance burden with automated product management workflow and real-time government integration. A simplified process for label research and product and brand label registration gives you plenty of time to sit back and sip on your newest brews. Market Ready gets your products to market more efficiently, giving you the opportunity to beat competitors to the shelves with new products and get the attention of key distributors.

 

Request a demo of Market Ready today.

The post Start Compliance Prep for Your Seasonal Beers Now appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Webinar Recap: How to Comply With the Latest State Sales Tax Regulations

Tue, 07/02/2019 - 13:41

The ShipCompliant by Sovos webinar, “Don’t Panic! How to Comply With the Latest State Sales Tax Regulations” covered what sales tax regulations look like, how they have changed over the last year, and how these rules apply to wineries engaged in the direct-to-consumer (DtC) wine shipping market.

If you missed this discussion among Annie Bones and Tyler Blackney, of Wine Institute, along with ShipCompliant’s Regulatory Counsel Alex Koral, read on for a detailed recap of the information shared and their insights.

What Is Sales Tax, and How Has It Changed Recently?

Sales tax is familiar to anyone who has bought anything in the United States. As its name shows, it is a tax imposed by states on a sale of tangible personal property; when there is an exchange of goods for money, the state can require the seller to assess an additional percentage of the price of the goods, which the seller must then remit to the state.

What makes sales tax compliance difficult is that how it applies in a specific moment depends greatly on where a sale occurs. The rate of the tax (or whether there’s a tax at all) can vary greatly depending on that location. This is because many states permit local jurisdictions—counties, cities, and other “special districts”—to impose an additional tax rate.

For brick-and-mortar sellers, this complexity can be greatly diminished because they are generally dealing with only one location. However, when the seller is asked to have the purchased goods shipped to the purchaser’s address, things get tricky quickly.

The first question is whether the seller would be required to collect and remit tax at all. Whether there is a tax obligation depends on what is called “nexus,” which essentially means a sufficient connection between seller and state by which it is not unfair for the state to impose an obligation. For many years, the specific definition of nexus had been “physical presence,” meaning the seller had to be actually located in the state (though what constituted a presence had become attenuated over the years). 

However, in last year’s Supreme Court decision, South Dakota v. Wayfair, the definition that many states use for nexus has expanded to include “economic” nexus. Under this definition, once a seller meets a threshold of economic connection (i.e., revenue) in a state, the state can impose a sales tax obligation. Generally this threshold is $100,000 in total retail sales, but it can vary state-by-state. (You can track what states’ economic nexus rules with this free Sovos resource.)

This change in policy has meant that many more sellers—namely Internet sellers—have tax obligations in many more states.

Once a seller has a sales tax obligation, some standard procedures should be followed.

They will first be required to register with the relevant tax authority (the Department of Revenue, or similar). Then, when a sale occurs, they will have to accurately calculate the appropriate tax rate. When a sales occurs at a brick and mortar store, the tax rate associated with that location applies. When a sale is made remotely, to be delivered to the purchaser, however, the rate will be that which is associated with the purchaser’s address. This means that remote sellers, with a greatly expanded tax liability, need to determine rates for many more locations (i.e., wherever they ship to).

(The Streamlined Sales Tax initiative aims to simplify sales tax regulations within its 24 member states. We recommend looking into this initiative find how to simplify your compliance, particularly for registrations.)

Once tax has been collected at the time of purchase, the seller must then remit it to the state, along with whatever reporting requirements the state imposes. It is critical to remit this money to the state in a timely fashion, as failure to do so can bring additional penalties, interest, or worse.

But What About Direct Shippers of Wine?

Wineries that participate in the legal DtC wine shipping market are actually well ahead of the game. This is because most states that permit DtC shipping of wine condition getting a DtC shipping license on the shipper assuming a tax liability in the state. So long before Wayfair, wineries were already complying with sales tax requirements all across the nation.

These wineries should follow the same procedures as for other taxpayers: recognize where they have a tax obligation, register to collect and remit tax, calculate and collect the correct tax, and remit it on time. At ShipCompliant, we have been supporting these requirements for nearly two decades, proving that with the proper systems, such obligations are meetable.

But there are—of course—some additional complications for wineries engaged in DtC shipping. These include recognizing if there is a special tax rate for wine (different than the general tax rate), or whether some other tax applies (for instance, in a state like New Hampshire that doesn’t have sales tax, but does impose a percentage markup on the cost of wine, which is also imposed on wine shipped DtC to the state).

Also, there are some states that do not impose sales tax obligations as a condition of being a DtC wine shipper: Minnesota, Iowa, Colorado, Missouri, and Florida. As these states pass economic nexus rules (so far Minnesota, Iowa, and Colorado), wineries that meet those states’ economic nexus thresholds will then have a sales tax obligation. 

So while DtC shipping wineries may have been dealing with expanded tax obligations for many years already, it still can’t be said to be uncomplicated. 

A Couple of Tricky States

In the webinar, we discussed in detail two states that present particular challenges because of their economic nexus rules.

Colorado is notorious in sales tax circles for its complexity. Since its economic nexus rules became effective on June 1, 2019, many remote sellers have had to figure out how to handle this tricky state. What makes Colorado particularly challenging is that the state divests a great deal of authority to local “home-rule” jurisdictions to enact and manage their own sales tax policies. 

Colorado’s economic threshold is $100,000 of total annual retail sales, which the state defines as any sale that is not for resale—that is, sales to the final consumer. Therefore, sales by wineries to Colorado wholesalers for distribution through the state’s three-tier system will not apply to this threshold.

Currently, Colorado’s economic nexus rules only apply to “state administered” taxes, meaning only taxes handled by the state Department of Taxation, whereas “home-rule” jurisdiction taxes only apply if the seller is physically located in that jurisdiction. As an example, if you’re a remote seller shipping to Broomfield, Colorado (a home rule jurisdiction), only the state rate will apply; but if you ship to a state-administered jurisdiction then city and county rates may apply.

In addition, Colorado requires sales tax registrants to indicate each jurisdiction in which they make sales. For remote sellers, this can be anywhere in the state. As such, we recommend that when a remote seller registers for sales tax in Colorado, they select all jurisdictions (a total of 683).

California also presents a challenge—mostly in that its rules are rather new, and affect instate businesses as well (e.g., wineries located there). Effective April 25, 2019, California has established an economic nexus threshold of $500,000 in retail revenue. Any seller meeting or exceeding this threshold is required to collect all state and district taxes, based on where the purchaser takes possession of the goods. This applies to both sellers in California and outside, which is a major change for local businesses. 

Previously, California businesses that shipped across the state were only required to collect the 7.25% state rate on those sales. Now, though, if they make more than $500,000 in sales in California, they will have to assess many more local, district taxes. This sets out four possible scenarios for a business selling to California:

  • A California-located business that makes less than $500,000 in total California retail revenue will only need to collect local district taxes for sales made wherever they have a physical location. For any order that they ship to addresses within the state, then only the 7.25% rate will apply.
  • A California-located business that makes $500,000 or more in total California retail revenue will need to collect the local district taxes on all sales they make. Sales finalized where they have a physical location will have that premises rate applied; sales shipped to other California locations will need to assess local district taxes at those locations.
  • Non-California businesses that make $500,000 or more in total California retail revenue will need to collect sales tax, including all relevant local district taxes, based on the applicable rate at where they are shipping goods.
  • Non-California businesses that make less than $500,000 in total California retail revenue are easy—they have no California tax obligation, and are free to ship to the state without collecting or remitting sales tax. The exception would be for non-California wineries shipping DtC to the state; these parties do have a sales tax obligation in the state, as a condition of getting a DtC shipping license. However, only the 7.25% rate will apply for all locations to which they ship.

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Sales tax is complicated, both in understanding its regulations and policies, and in meeting your compliance needs. At ShipCompliant by Sovos, we aim to provide the information and tools necessary for businesses to succeed unhampered by these complex government regulations. You can find such information through our webinar series and  blog. If you’re interested in additional compliance support, reach out to us to see how we can enable your business to thrive.

The post Webinar Recap: How to Comply With the Latest State Sales Tax Regulations appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

TTB Eases Rules for Making Changes to COLA Applications

Mon, 07/01/2019 - 11:49

The federal Trade and Tax Bureau (TTB) recently announced that it will enable a new “Conditionally Approved” status for Certifications of Label Approval (COLA) that will enable a simplified process for suppliers to correct applications with typos, a move that should bring welcome relief to all US beverage alcohol suppliers.

Previously, any error in a submission would prompt a “needs correction” response from the TTB that would require the applicant to correct and resubmit their application; this could add additional weeks to the time-sensitive go-to-market process. The TTB sent about half of COLA submissions back for corrections, often enough due to simple errors such as typos on application forms.

COLA changes should speed time to market 

Starting on June 27, 2019, the TTB will let producers amend some fields in their COLA applications without having to restart the application process. When a TTB specialist notices an error in certain fields of the application, they will flag these errors and propose a correction that the applicant can either accept or reject. 

A “Conditionally Approved” status is only available when a specialist proposes a correction to the following fields: Brand Name, Fanciful Name, Appellation (Wine Only), and Grape Varietal (Wine Only). These fields are particularly prone to typos in an application, and as the specialist can compare what is printed on the product label against what is on the application, they are able to recommend a proposed correction.

Once the applicant receives notice of their “Conditionally Approved” status, they will have 7 days to review and either accept or reject the proposed change. If the applicant accepts the proposed change, the status of the COLA will automatically change to “Approved,” and no further action will be required. If the applicant declines the proposed changes, then the COLA status will automatically change to “Needs Correction” and the applicant will be able to correct any errors themselves through the established correction process. If no action is taken within 7 days, then it the COLA status will move to “Needs Correction,” again following the established process.

In addition to the new “Conditionally Approved” status, the TTB announced other improvements to the COLAs Online tool, which will enable users to better track and manage their approved and pending COLAs. 

For smaller producers in particular, the TTB’s move should be good news. The COLA process has improved by leaps and bounds in the last few years — many can remember the bad old days when COLA approval was expected to take well over a month. Currently, the TTB indicates that the processing time is expected in about 18-20 days, depending on the product type. However, there is still room for further improvement, and the new policy should dramatically reduce this time by eliminating a slew of time-consuming corrections. 

 

ShipCompliant by Sovos is the only automated compliance tool integrated with the TTB. Find out how ShipCompliant helps producers stay in compliance with state and federal regulations, or download the 2019 DtC Wine Shipping Report.

The post TTB Eases Rules for Making Changes to COLA Applications appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

What the Tennessee Wine & Spirits Ruling Means for DtC Wine Shipping

Wed, 06/26/2019 - 17:55
Supreme Court Rules Against Tennessee’s Discriminatory Residency Requirements

After months of waiting by the beverage alcohol industry, the United States Supreme Court published its ruling in Tennessee Wine & Spirits Retailers Ass’n v. Thomas on June 26, 2019. The 7-2 opinion, written by Justice Samuel Alito, clearly and definitively struck down a rule in Tennessee that required applicants for an off-premises retail liquor license to have been residents of the state for at least two years.

While in the moment this ruling is limited to the question of Tennessee’s residency requirement, by affirming the principle that states are limited in their ability to discriminate against out of state interests, it presents an opening to loosen other restrictive rules imposed by states.

What Was Tennessee Wine & Spirits About?

The issue first arose a few years ago, when national retailer Total Wine Beer Spirits & More (Total Wine) asked the Tennessee Attorney General to opine on the constitutionality of the state’s two-year residency requirement for all applicants for in-state retail package stores. (Tennessee law also required a 10-year residency requirement for renewal applications, and required that all officers, directors, and owners of corporate entities meet the residency requirements; both of these provisions were overturned by lower courts, and were not at issue in the case before the Supreme Court.)

The Tennessee Attorney General found that the residency requirements were not enforceable, and Total Wine proceeded to apply for a retail package license; at the same time, a couple who had recently moved to Tennessee from Utah also applied for a retail package license relying on the same assurance that the residency requirement was invalid. However, the Tennessee Wine & Spirits Retailers Association threatened to sue the state’s liquor authority if it granted these licenses, leading to this case, which was designed to determine once and for all the constitutionality of the residency requirement.

The United States District Court for the Middle District of Tennessee, following the Supreme Court’s 2005 Granholm v. Heald ruling, found the residency requirement to be unconstitutional. This ruling was upheld on appeal at the 6th Circuit Court, leading to the challenge before the Supreme court.

The argument presented by Tennessee Wine & Spirits Association relied heavily on Section 2 of the 21st Amendment. This section provides great power to individual states to regulate their alcohol markets, and prohibits the transportation, importation, or possession of alcohol in a state that contravenes the state’s laws.

The opposing argument was based on what is called the “Dormant Commerce Clause,” which limits the ability of states to impose laws that limit interstate commerce or that set out discriminatory treatment of out-of-state interests in favor of in-state interests. (The doctrine is called the “Dormant” Commerce Clause, as it is not explicitly stated in the Constitution, but comes from the Commerce Clause, as set out in Article I, Section 8 of the Constitution, which enables Congress to regulate all interstate commerce. The implication, then, as worked out over nearly two centuries of Supreme Court rulings, is that states are prohibited from interfering in interstate commerce, unless explicitly permitted by Congress.)

The crux of the decision, then, fell on which provision of the Constitution had greater bearing: the 21st Amendment’s expansive grant of rights to the states to regulate their internal beverage alcohol market, or the Dormant Commerce Clause’s restriction on states’ ability to enforce discriminatory laws.

What Does Alito’s Ruling Say?

In his opinion, Justice Alito clearly sets out the position that Tennessee’s residency requirement is an improper discrimination against out-of-state interests, which is not saved by the powers granted to Tennessee under the 21st Amendment. As such it is unconstitutional, and fails on its face.

Alito justifies this reading by noting that Section 2 of the 21st Amendment has for decades — and increasingly so in more recent decades — been limited by other provisions of the Constitution. In various other cases, it has been found that limits on alcohol advertising improperly violate the First Amendment, or that discriminatory taxes that apply only to liquors produced out of state violate the Equal Protection Doctrine. As such, it is not at all improper to find that the Dormant Commerce Clause similarly can preempt a 21st Amendment claim.

Alito does not defang the 21st Amendment. He acknowledges that it does still provide states with the power to regulate their internal alcohol markets. However, he affirms the position that state laws that rely on the 21st Amendment must be based on the principles that the 21st Amendment was originally designed to enable: that states can “address the public health and safety effects of alcohol use and to serve other legitimate interests.” (Tennessee Wine & Spirits Retailers Ass’n v. Thomas, page 32.)

But the corollary then, is that purely protectionist measures that fail to show a connection to those interests must fail. Because Tennessee’s residency requirements are facially all about blocking the entry into the Tennessee market by out of state interests, and are not justified by concerns of public health and safety, they must fail.

Alito does address the claims by the petitioners that these rules are in fact tied to public health and safety concerns, but dismisses them as “implausible on its face” (page 33). Basically, the claim that the state needs to limit retail package store licenses to only parties that have resided in the state for at least two years cannot stand because the state can still require that there be an instate agent to be liable for any instate claim, or can require the out-of-state party to accept jurisdictional authority by Tennessee. (Alito also references the border town of Bristol, Tennessee, noting that it’s ridiculous to believe that a person in Memphis — 500 miles away — has more interest in the health and safety of the local community than a person residing across the street in Bristol, Virginia.)

As such, a state cannot merely claim that its laws relate to public health and safety, it must demonstrably prove that in court. However, left unsaid (and therefore likely ripe for future litigation), is what exactly are “other legitimate interests.” Seemingly, these should relate to public health and safety, and other principles of temperance, but there perhaps lies an opening for states to argue for the validity of other laws in the future.

Justice Alito was joined in his opinion by Chief Justice Roberts, and Justices Kagan, Ginsberg, Kavanaugh, Sotomayor, and Breyer. Justice Gorsuch wrote a dissent, which was joined by Justice Thomas.

Gorsuch’s dissent rebukes Alito’s opinion, stating that this ruling misinterprets the history of the pre-Prohibition era and the genesis of the 21st Amendment. Whereas Alito, and the majority of the Court, sees that history as limited to asserting the principles of public health and safety, Gorsuch takes a broader stance, finding that those principles enable states to impose all manner of laws (including residency requirements, which he notes themselves have a 150-year history). Essentially, this argument follows what many who support restrictive state rules claim: that states can impose any rules they want, “because alcohol”. They assert that since this is a dangerous and fraught product, states have free reign and it is improper for a court to second guess a state’s assertion that their laws are valid. (It should also be noted that Gorsuch and Thomas are notoriously critical of the Dormant Commerce Clause, and are apt to rule against any argument that relies on it.)

What Does the Tennessee Wine & Spirits Ruling Mean Going Forward?

Presently, this ruling only applies to Tennessee’s durational residency requirements, meaning that, indeed, Total Wine and other people who have not lived in the state for two years can receive a license to operate a retail package store.

However, Alito’s ruling does seem to open the door for a more expansive view of 21st Amendment doctrine that requires a showing by states that their laws demonstrably address a concern related to public health and safety or other legitimate state interests. The Court has reaffirmed the stance it has taken in more recent beverage alcohol cases (such as Granholm, Bacchus Imports v. Dias (1984), or North Dakota v. United States (1990)) that the basic argument of “because alcohol” will not carry the day.

Implications of the Tennessee Wine & Spirits Ruling on DtC alcohol shipping

This has broad implications on the direct-to-consumer (DtC) shipping of alcohol by retailers. Producers have benefited greatly from the 2005 Granholm decision that determined that when states enable in-state wineries to make DtC shipments of wine, they must grant out-of-state wineries the same permission (by implication this would also apply to other producers, such as brewers and distillers). However, retailers have not been extended the same rights.

Currently, about a dozen states permit the DtC shipping of alcohol by retailers, for both instate and out-of-state retailers (Connecticut recently passed such a provision, coming into effect July 1, 2019). However, a few states have recently passed laws that would prohibit out-of-state retailers from making DtC shipments of alcohol, while enabling it for instate retailers (namely Michigan, Missouri, and Illinois).

The states claim that this is permitted, as Granholm should be limited solely to producers, and did not address the rights of retailers. But Alito’s opinion seems to shift the landscape for these arguments, requiring that states put forth a clear argument that such facially discriminatory rules are based on the principle of upholding public health and safety. Following that direction, it is likely that the courts will have to rule against the states in the active court cases. And going forward, as more states move to expand DtC permissions for retailers, they will have to grant the same permissions to out-of-state retailers.

As Alito notes in his opinion (citing Granholm), “[i]n this age of split-second communications by means of computer networks . . . there is no shortage of less burdensome, yet still suitable, options” for states to monitor and control their beverage alcohol markets. By checking licenses, tracking orders, and providing tax calculation and reporting for the DtC wine shipping market, ShipCompliant by Sovos has been on the leading edge of this market, enabling our users to comply with the various states’ DtC regulations. Through our services, our users have been able to stay in good standing with state agencies, and states have received tens of millions in tax revenue.

We are therefore heartened to see the Court expand on the principle that states are limited in their ability to discriminate against out of state interests, despite the seemingly expansive nature of the 21st Amendment. By expanding the market, and not relying on discriminatory rules, states can enable greater consumer choice and empower businesses to succeed, and they can do so while ensuring the safety and health of the people they aim to protect.

 

Request a demo of ShipCompliant, or discover how ShipCompliant gives wineries control over DtC compliance.

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HAL Access Expands! ShipCompliant and Wineshipping Partner to Offer FedEx Hold-At-Locations (HAL) at Fulfillment Level

Tue, 06/25/2019 - 10:22

ShipCompliant by Sovos and Wineshipping announce a new integration to support FedEx Hold-at-Location availability. This addition of the fulfillment side of the HAL integration makes these HAL delivery options more accessible to wineries to offer to their customers, no matter the method of fulfillment.

With consumers expecting speed and convenience for their deliveries, FedEx HAL is an alternative delivery option to pick up their packages at a convenient time and location rather than have it shipped to their home or office.

HAL offers wineries’ customers more than 12,500 locations nationwide from which to pick up their wine shipments any time it’s convenient for them, offering a long-awaited solution to frustrating failed delivery attempts and expensive returns. This service ultimately gives consumers a better wine delivery experience, saving time and money.

Wineshipping and ShipCompliant have partnered to provide a seamless integration that can receive the Hold-at-Location selection from a HAL-enabled front-end system, like ecommerce or point-of-sale, directly into Wineshipping’s state of the art system via a customized API with ShipCompliant. This allows Wineshipping to generate a unique HAL-encoded label to create a new level of integrated efficiency through the delivery network, ensuring confidence of being in compliance with the complex direct-to-consumer wine shipping regulations.

“At Wineshipping, we are focused on creating best in class shipping solutions, and FedEx Hold at Locations is one of those services. We are excited to work with ShipCompliant by Sovos in bringing a compliant FedEx HAL program to our clients,” said Ravi Ramakrishnan, chief technology officer, Wineshipping.

Larry Cormier, general manager at ShipCompliant by Sovos, said, “The delivery experience is crucial to customer satisfaction and retention—and revenue growth—for ShipCompliant’s DtC customers. Partnering with Wineshipping and FedEx to seamlessly integrate HAL into the fulfillment end of the order process is an innovative win-win-win for our partners and clients and their customers.”

 

Request a demo of ShipCompliant, or discover how ShipCompliant gives wineries control over DtC compliance.

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BevAlc Roundup | Industry Urges Permanent Tax Relief, American Single Malt Definition, and We Still Drink What the Romans Did

Wed, 06/19/2019 - 09:16

With only a couple weeks left in the Supreme Court’s 2018-2019 term left, and still no ruling in the Tennessee Wine & Spirits Retailers Ass’n v. Thomas case, a lot of anxious attention is being paid by the beverage alcohol industry. A decision in this case, immediately about residency requirements for liquor retailers but more broadly hitting on critical questions about the right of states to discriminate against out-of-state liquor interests, is imminent — and indeed may be out already by the time the Roundup is published! We will be providing our own fresh takes on what the Court rules — whether it will upset the beverage alcohol industry as we know it, or if things will remain more or less the same — so make sure to tune into our blog.

For this week’s Roundup, we look first at Connecticut, which just passed a statute opening the state to direct-to-consumer shipments of wine from retailers nationwide; then we hear about how eCommerce provides the best opportunity for growth by wineries looking to expand their direct-to-consumer operations; and finally, why consumers’ drive for a tasting room experience may be waning, but that doesn’t mean there’s any less interest in a wine country vacation.

In case you haven’t heard, the 2019 Direct-to-Consumer Wine Shipping Report has been published. Download your copy today here.

Thanks for reading the Roundup this week. As ever, be sure to check out the rest of the ShipCompliant by Sovos blog for regular updates, and we’ll see you again in another couple of weeks.

Regulatory News and Discussions

TTB Newsletter | This week’s top news includes that soon COLAs Online will include a new application status called “Conditionally Approved,” we have open job postings for auditors and an attorney advisor, and a criminal case TTB participated in has resulted in a guilty plea. TTB

Connecticut Will Permit Direct Shipping of Wine by Retailers in July | Retailers looking to make DtC shipments of wine to Connecticut consumers will have to comply with the same regulations that have long applied to wineries. ShipCompliant by Sovos

Beer, Wine Coalition Presses Congress to Act on Permanent Federal Excise Tax Relief | One provision in the 2017 tax overhaul has slashed federal excise taxes for the craft beer, wine and distilling sectors, ut the excise tax relief will sunset at the end of this year unless Congress extends it. CNBC

Carriers Stymie State Shipping Changes | Florida and Connecticut have removed barriers to out-of-state retailers but the shipping companies don’t seem to be listening. Wine-searcher.com

Potential Changes in U.S. Spirits Sizes Draw Mixed Reactions | While the Treasury Department’s Tax & Trade Bureau has not yet officially published a proposed regulatory change to eliminate most requirements on bottle sizes for distilled spirits, the very idea is beginning to generate some controversy. Whisky Cast

Panel Adopts Emergency Rules For Controversial Liquor Bill | The Oklahoma Alcoholic Beverage Law Enforcement Commission on Wednesday approved emergency rules to implement a controversial new law governing the distribution of liquor. Tulsa World

Wine Retailers Cross Fingers Over Soon-to-Come Supreme Court Ruling | Soon—very soon—the Supreme Court is expected to hand down a decision regarding an appeal of Byrd v. Tennessee Wine and Spirits Retailers Association et al heard by the Court in January 2019. Forbes

Industry Updates: Market Conditions and Developments

ShipCompliant by Sovos Wine Summit 2019 | More than 300 customers, partners and industry luminaries joined us at this year’s ShipCompliant by Sovos annual Wine Summit in Napa. ShipCompliant by Sovos

New WineDirect Report Reveals Ecommerce as Largest Opportunity for DTC Wine Sales | Ecommerce sales have high average order value (AOV), yet they represent the smallest share of orders across all sales channels. Wine Business

Slowing Sales Force Wineries to Review Market Position | Since domestic shipments show little growth, and export options are limited by a fractious trade environment, wineries have to be selective about where they’re going to sell products, and how they’re being positioned against competitors. Wine Business

Association Urges Support For American Single Malt Definition | The American Single Malt Whiskey Commission is calling on industry members to pledge their support for a ‘standard identity’ for the category ahead of the finalisation of new US spirits labelling laws. The Spirits Business

How Much Americans Spend on Wine, What They Buy, In What Container — and More | According to the latest Wine Vines Analytics/Nielsen stats, from March 2018-March 2019 American consumers spent $14.4 billion on wine. Forbes

TTB Protocols, Procedures, and Investigations | Everything You Ever Wanted to Know about TTB Investigations but Are Afraid to Ask: What Happens When the TTB Investigators Lie? What Happens When You Lie? How Can a Runaway Investigation Without a Purpose be Stopped? Booze Rules

Digestif

We Drink Basically the Same Wine Varietals As Ancient Romans, and That’s Not So Great | According to a new study in Nature Plants published Monday, many of the most popular wine varietals sold today are extremely genetically similar to the wines that ancient Romans drank. NPR

The Wine Country Tasting Room Is Dead. But Long Live Wine Country | Forget standing at a tasting bar. A trip to California’s wine country today means comedy shows, art museums, cabanas at pool parties, and interactive dinners—all with a glass in hand. Fortune

The Inexorable Rise of Wine Prices | Inflation is a fact of life, but the relentless increase in the price of wine is startling. Wine-searcher.com

Consumers Clearly Prefer Smaller Sizes of Wine-in-a-Can. Ask TTB to Allow 250mL Single-Size | Recent research by WICresearch.com which involved a survey of 1,700 respondents reveals that 79% of consumers prefer smaller sizes of wine-in-a-can. Wine Industry Advisor

 

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Connecticut Will Permit Direct Shipping of Wine by Retailers in July

Thu, 06/13/2019 - 11:44

Beginning July 1, 2019, Connecticut will become the latest state to permit the direct-to-consumer (DtC) shipping of wine by out-of-state retailers.

Governor Ned Lamont signed SB 647 on June 5. The new law amended many provisions of the state’s alcohol statutes, including the current rules for wineries’ DtC shipments of wine, which now include language opening the state to DtC shipping of wine by retailers.

Retailers looking to make DtC shipments of wine to Connecticut consumers will have to comply with the same regulations that have long applied to wineries. These include:

  • License — Retailers must apply for, and receive, a Retailer Wine Shipper’s Permit from the Connecticut Liquor Control Division. The annual cost of this license is $600. (The annual license cost for wineries remains unchanged at $315).
  • Consumer volume limits — Direct shippers may ship no more than 5 gallons of wine in any two-month period. This is roughly the equivalent of two 9-liter cases of wine.
  • Collect and remit taxes — Direct shippers must remit to Connecticut both excise taxes and sales taxes on their DtC sales to the state. Connecticut’s sales tax rate is 6.35 percent with no local taxes. (Connecticut changed its excise tax rates for wine and spirits in a separate bill; these rates are described below.)
  • Report sales — Direct shippers must file a monthly report of wine shipments to the state. This report is in addition to the excise and sales tax returns, and must provide details on each order shipped, such as the recipient’s name and address, and the contents of the package.
  • Advertising restrictions — When advertising or offering wine to Connecticut consumers via the Internet or other media, direct shippers must include their Connecticut shipper’s permit number.
  • Do not sell below cost — Direct shippers must comply with section 30-68m of the Connecticut Revised Statutes, which prohibits retailers from selling wine in Connecticut for a price less than what they paid for it at wholesale.
  • Package labels — Direct shippers must place a label on any package containing wine that reads, “CONTAINS ALCOHOL SIGNATURE OF A PERSON AGE 21 OR OLDER REQUIRED FOR  DELIVERY.”
  • Obtain consumer signature — Direct shippers must either also hold an in-state transporter’s permit or work only with parties licensed as in-state transporters. In addition, before a delivery can be finalized, recipients of the delivery must show their IDs proving they are of age to receive wine and provide their signature.

With the passage of SB 647, Connecticut joins the small, but growing, ranks of states that permit out-of-state retailers to make shipments of wine direct to consumers. Currently, the other states are: Alaska, Louisiana, Nebraska, Nevada, New Hampshire, North Dakota, Oregon, Virginia, West Virginia, and Wyoming. (California, New Mexico, and Idaho also permit retailers in each others’ states to ship to their residents.)

The opening of another state to DtC shipping is part of a positive trend. By establishing rules and regulations for how retailers can join into the Connecticut DtC market, the state is enabling itself to effectively monitor, tax, and police that market. This, in turn, means the residents of Connecticut can legally access a national selection of wines that might otherwise not be made available locally.

Connecticut also raises excise taxes

In addition to SB 647, the governor signed HB 7427, the state’s budget. This bill includes a 10 percent increase on Connecticut’s excise taxes on wine and spirits, which will become effective October 1, 2019. Thereafter, the taxes on alcohol in the state will be as follows:

  • Still wine with an ABV of 21 percent or less: $0.79 per gallon (up from $0.72)
  • Still wine with an ABV greater than 21 percent, and all sparkling wine: $1.98 per gallon (up from $1.80)
  • Liquor: $5.94 per gallon (up from $5.40)
  • Liquor coolers, with an ABV no greater than 7 percent: $2.71 per gallon (up from $2.46)
  • Beer, and cider with an ABV no greater than 7 percent: $7.92 per barrel; $3.96 per half-barrel; $1.98 per quarter-barrel; or $0.26 per gallon (remains unchanged)

Request a demo of ShipCompliant, or discover how ShipCompliant by Sovos gives wineries control over DtC compliance and reporting.

 

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The Vinners: Customer Awards Announced at the 2019 ShipCompliant Wine Summit

Wed, 06/12/2019 - 11:17

Another top-shelf ShipCompliant Wine Summit in the books. After a day of learning, sharing, networking and wine drinking, ShipCompliant by Sovos exclusively announced the winners of our first annual customer awards: The Vinners.

A reaction to new forces in the wine market

With Millennials replacing Boomers as key demand drivers, wineries have quickly adapted to emerging market trends, as exemplified by The Vinners. In a world dominated by social media and graphics, it’s important to stand out visually and grab the attention of consumers. Increasingly, wineries are taking notice that creating a friendly and welcoming atmosphere can quickly turn first-time guests into loyal customers.

The age of Amazon and same-day delivery has made ecommerce a necessity for wineries, so having an organized, straightforward website is crucial. As made evident in the ShipCompliant DtC report, purchasing wine is no longer exclusively an in-person activity; it has transformed by expanding the avenues utilized to promote  wineries’ brands and how they engage wine drinkers.

How the Vinners won

Wineries were able to nominate themselves or other ShipCompliant customers for a chance to win in any of the following categories: Most Creative and Captivating Label, Most Engaging Tasting Room Experience, Most Successful Wine Club Promotion and Must-Follow Instagram Account.

Member of the ShipCompliant team had their work cut out for them, with numerous strong nominations received in each category. After much consideration, the following Vinners were selected and announced during our closing session, a perfect way to kick off the wine party. We are very excited to share here the winners of our first annual Vinners awards:

And the Vinners are….

Most Creative and Captivating Label: Wine Guerrilla 

wine guerrilla

Most Engaging Tasting Room Experience: Del Dotto Vineyards

del dotto

Most Successful Wine Club Promotion: nakedwines.com

naked wines

Must-Follow Instagram Account: Messina Hof Winery

messina hof

ShipCompliant congratulates the winners and all our customers for their hard work and valuable contributions to the wine community over the past year. It was great to connect and learn some new best practices from the winners, especially during our wine party.

Feedback?

Attendees, we’d love to hear your feedback. We aim to make each summit more memorable than the last. We want your input when it comes to speakers, new topics and new ways to make it a one-of-a-kind experience.

See You Next Year!

We’ll hope to see you next Spring for the 2020 ShipCompliant Wine Summit. In the meantime, keep up with us on Twitter, Facebook, and LinkedIn.

 

Find out how ShipCompliant by Sovos can help your winery achieve compliance.

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ICYMI: ShipCompliant by Sovos Wine Summit 2019

Tue, 06/11/2019 - 17:02

More than 300 customers, partners and industry luminaries joined us at this year’s ShipCompliant by Sovos annual Wine Summit in Napa. If you were there, you know it featured a rich exchange of ideas about how wineries can manage compliance and improve customer experience in the digital age. And if you missed it, here’s a glimpse of the event:

From wine tourism experiences to regulatory updates

Keynote speaker Robin Shaw, a specialist in wine tourism development and consultant for Wine Tourism Australia, emphasized the winery experience in the opening session. Robin worked for decades to help wineries improve their consumer experiences and grow their businesses. She showcased a number of standout wineries from around the world that have improved consumer experiences by establishing relaxed and friendly attitudes, installing unique and alluring artwork, providing kid-friendly or alternative entertainment options, and incorporating local environment and culture into tasting rooms.

One of the other highlights of the event was the regulators panel, where attendees heard directly from the agencies governing the wine industry. This year’s panel included Janelle Christian, industry outreach program manager with the TTB; Matthew Botting, general counsel for the California ABC; and Kelly Routt, director of administrative policy and process for the Oregon LCC. They discussed a range of issues affecting the wine industry, including how wineries may — and may not — interact with marijuana, what has been happening with recent trade practice enforcement; winery advertising restrictions and social media; and recent changes to wine labeling rules. The regulators stressed caution on emerging topics, like marijuana, while the rules are still developing.

Shipper success and sales tax in the DtC channel

We also announced the ShipCompliant Carrier Compliance portal. FedEx is the first to adopt this new tool, developed to help secure the DtC channel for wineries and carriers alike by managing shippers’ license information. FedEx speakers joined ShipCompliant by Sovos leaders to discuss the development of this solution, why FedEx took this approach, and what wineries and retailers can expect, whether they’re ShipCompliant customers or not.

More than 64 percent of the DtC channel goes to states that require carrier reporting. Without automation or proactive license checks, carriers risk non-compliance, and therefore, wineries are also at risk when delivering to those states.

ShipCompliant streamlines the required data sharing of licensing between FedEx and its shippers. For ShipCompliant clients, the change is minimal. They just need to add their FedEx account numbers to their ShipCompliant accounts. Wineries or retailers that are not using ShipCompliant can create an account in the new License Portal and input their DtC permit information, which is then immediately shared with FedEx. Gone are the days of mailing in copies of permits or lag times in deliveries due to permit review.

We also dove deeply into sales tax, which has long been a source of confusion and complexity. That ratcheted up in the last year, since the Supreme Court ruled in South Dakota v. Wayfair that states have freer rein to require out-of-state businesses to collect sales tax.

Chuck Maniace, Sovos vice president of regulatory analysis and design, explained that the impact of Wayfair has been less traumatic for wineries than it has been for the broader market of remote sellers.This is because DtC wine shippers have long been required to assume a sales tax liability in most states they ship to as a precondition of getting a DtC shipping license.

However, there are some exceptions to this rule, and Chuck highlighted states that have passed post-Wayfair rules that have changed things for DtC wine shippers. Colorado stands out largely because of how complicated the state’s sales tax regulations are, whereas California is notable as it has implemented a destination-based tax calculation system, meaning wineries shipping within the state must calculate and collect local taxes from many more locations.

Compliance, data and customer experience in the digital age

We hosted several panels focused on the critical issues wineries face in the digital age. For example, ShipCompliant Regulatory Counsel Alex Koral moderated a discussion involving Rebecca Stamey-White, partner at Hinman & Carmichael, and Sean O’Leary, president of O’Leary Legal and Policy Group. Together, they analyzed several major ongoing lawsuits, including Tennessee Wine & Spirits Retailers Ass’n v. Thomas, which is pending a decision from the Supreme Court. They also provided an advocate’s perspective on the trade practice enforcement actions and the spate of new alternative distributor arrangements that have recently debuted.

They also ranged into the broader question of how suited beverage alcohol regulations are to the modern marketplace, as well as consumer expectations in a world of Amazon and Instagram.

Meanwhile, John Curnutt, revenue and systems specialist at Chateau Montelena, discussed the winery’s process for gathering, analyzing and acting on its data to glean business insights. Adrienne Stillman, marketing director at WineDirect, John Keleher, founder at Community Benchmark, and Andrew Adams, editor, Wines Vines Analytics shared tips on what data is available to wineries to help better understand their customers.

And building off the themes of our opening keynote, Zach Kamphuis from Commerce7, Juli Barron from Opus One and Adam Ivor from Gliding Eagle joined Curry Wilson, strategic partner manager for ShipCompliant, to discuss the most important customer experience tools for wineries to manage their websites, marketing and delivery. Conversation ranged from the importance of making the international channel feel welcome and important to a winery, both in person when they visit, to the need for fast websites, since more than half of potential customers will leave a site that takes longer than three seconds to load.

The wrap up

In addition to lots of learning and networking opportunities, we hosted our first customer awards this year. The Vinners showcased the amazing work our customers have done and set the stage for our annual tradition: wine hour. Honorees includedWine Guerrilla, Del Dotto Vineyards, nakedwines.com and Messina Hof Winery.

We’d also like to thank our sponsors for making this year’s GCS Wine Summit possible:

  • FedEx
  • WineDirect
  • Wineshipping
  • Wines Vines Analytics
  • Gliding Eagle
  • Copper Peak Logistics
  • Commerce7
  • Pack n’ Ship Direct
  • Cellar
  • Astra Digital
  • UPS
  • VinSuite
  • MainFreight
  • WineCo
  • Esker
  • Parsyl

And finally, thank you to Steve Gross, vice president, state relations at the Wine Institute, who helped close the day with his much-anticipated state of the DtC industry.

Our appreciation to all of you who attended. We’re already planning and anticipating next year’s event and hope to see you there.

 

Find out how ShipCompliant helps wineries navigate the complexities of wine regulations and ensure both compliance and profitability.

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BevAlc Roundup | Where DtC Shipping of Wine Is Still Not Allowed, the NFL Eases Advertising Restrictions, and American Single Malt

Tue, 06/04/2019 - 13:35

Last week we hosted our annual ShipCompliant by Sovos Wine Summit at the Napa Valley Marriott, which was a rousing success! Thanks so much to everyone who turned out, from our fantastic list of presenters and speakers to our wonderful users and audience. At the conference, we presented on regulatory updates, ways to improve your tasting room experiences, and announced our new Compliance Portal with FedEx, which will help the carrier ensure that wineries and retailers involved in DtC shipping are properly licensed. If you weren’t able to attend, we missed you! But we will be putting out a recap soon, so stay tuned to this feed.

In other news from this last week, it is with an extremely heavy and saddened heart that we report on the passing of TTB Director John Manfreda. Many tributes have come out in the last week all making it clear how dedicated John was to his work, but more so how wonderful it was to know him personally. We have shared below some of these tributes.

Elsewhere in the Roundup, we look at how tariffs are affecting the beer industry — and how they could get worse; also, we look at where opportunity for growth in the wine industry remains in the world of climate change and increasing mergers, and finally, natural ways to prevent pests in grape fields are gaining traction.

In case you haven’t heard, the 2019 Direct-to-Consumer Wine Shipping Report has been published. Download your copy today here.

Thanks for reading the Roundup this week. As ever, be sure to check out the rest of the ShipCompliant by Sovos blog for regular updates, and we’ll see you again in another couple of weeks.

Regulatory News and Discussions

TTB Newsletter | This week’s top news includes information about how to register for one of our remaining trade practice seminars, details about the spring edition of the Unified Agenda, and a notice that we’re hiring two regulations specialists. TTB

TTB Newsletter — Special Edition |  In this special edition of the TTB Newsletter, we announce with deep sadness and regret the passing of our Administrator, John Manfreda. TTB

The Passing of John Manfreda of the TTB | A tragedy for his family and a tragedy for the industry he so faithfully served for so long. Booze Rules

Legislation to Remove DTC Barriers Continue Nationwide; Five States Remain Closed to DTC | Steve Gross, of Wine Institute, urged attendees of the 2019 ShipCompliant by Sovos Wine Sumit in Napa to support the efforts of Free the Grapes, a coalition of wineries and other wine industry representatives seeking to remove barriers to direct-to-consumer wine shipping. Wine Business

Beer Industry Shudders at Trump’s Threat to Impose Tariffs on Mexican Imports | President Donald Trump’s threat to impose tariffs on Mexican imports sent shivers through the U.S. beer industry, which warned Friday that it could be hammered with nearly $1 billion in increased annual costs if the countries don’t resolve their differences. Chicago Tribune

Can State Regulators Enforce Liquor Laws That Federal Courts Have Found Unconstitutional? | Even though the law was adjudicated and found unconstitutional, this still hasn’t stopped Michigan from threatening those who ship wine into the state with sanctions. Irish Liquor Lawyer

U.S. Beer Industry Blames Trump Tariffs For 40,000 Job Losses | A report by two trade groups showed U.S. beer-industry jobs dropped 40,000 since 2016 as metal tariffs boosted aluminum-can costs, leading to a drop in investment. Bloomberg

Industry Updates: Market Conditions and Developments

ShipCompliant Announces Carrier Compliance Portal With FedEx | ShipCompliant by Sovos is excited to announce our Carrier Compliance Portal, which enables wineries and retailers to share their state license data with FedEx. ShipCompliant

NFL Eases Restrictions on Alcohol Sponsorship | The National Football League has said it will allow active players to appear in beer adverts as well as ease restrictions of wine and spirits companies becoming “official sponsors” of franchises. Drink Business

Wine Industry Poised for Opportunity Amid Climate Change, Big M&A Deals: Rabobank | Although we anticipate economic and sector challenges ahead, in the current market wine industry professionals have many opportunities to set their businesses up for success. North Bay Business Journal

Is Legal Marijuana Hurting Beer Sales or Helping Them? | There is such animosity reverberating throughout the cannabis community over the fact that beer, wine and spirits are legal and widely accepted. Forbes

Digestif

This Wine Was Brought to You by Bugs | Winemakers are increasingly moving from pesticides to pests to combat disease and create better wines. Wine-searcher.com

The Emerging Styles of American Single Malt | Distillers discuss three prominent subcategories that are making their way to the forefront. SevenFifty Daily

How Wineries Can Better Market to Millennials | If you have a winery, the odds are very good that you are collecting data. But if no one is looking at the data then it might as well not exist. Beverage Industry Enthusiast

Why Do Winery Instagram Feeds Suck So Much? | Every winery needs to step back and think about what they’re doing on Instagram. What is the point of a consumer following you? Spit Bucket

Why Native Yeast Fermentations Are Critical For Expressing Terroir | In seeking to express the true character of a site, winemaker Brandon Spark-Gillis was brought one step closer by lab results. SevenFifty Daily

 

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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ShipCompliant Announces Carrier Compliance Portal with FedEx

Wed, 05/22/2019 - 14:30

ShipCompliant by Sovos is excited to announce our Carrier Compliance Portal, which enables wineries and retailers to share their state license data with FedEx.

“This major milestone in DtC wine shipping is evidence of ShipCompliant’s commitment to work with our industry partners and state regulatory agencies to ensure the ongoing success of this important distribution channel,” said Larry Cormier, vice president and general manager of ShipCompliant. “From the very beginning, we have had one goal: to remove compliance barriers for our customers so they can focus on growing their businesses.”

The wine industry has been under increased scrutiny from states. Businesses must comply with complex state-by-state regulations in order to bring products to market, distribute to customers and grow. ShipCompliant by Sovos stays on top of all the regulations businesses are up against and provides easy-to-use solutions that companies can use to remain compliant.

Changes in the industry

States are increasing their scrutiny over the direct-to-consumer (DtC) wine shipping channel. More states are requiring reporting by carriers and fulfillment houses to cross-reference incoming shipments with license status of the winery and retailer. As a result, carriers now require copies of DTC permits and licenses in each state to ensure their own compliance with state rules.

Our commitment to DtC growth

ShipCompliant is committed to protecting the DtC channel. By proving to states that wineries and retailers are compliantly shipping, we are confident that states will continue to allow businesses to grow.

The benefits

FedEx recognized there is a quicker way to accomplish the data inputs and analysis needed to effectively review license status. ShipCompliant has built the Carrier Compliance Portal for DtC permit sharing with FedEx.

By using the Carrier Compliance Portal, wineries or retailers shipping wine DtC can go online at any time to input state permits and update existing effective dates. This information is then automatically updated to FedEx, so there is no lag time in delivery of shipments due to license expiration. Businesses can then easily ship via the FedEx channel despite any DtC permit requirements, since data is shared automatically after input into the license portal.

Find more information about the Carrier Compliance Portal here, or learn more about ShipCompliant by checking out our free guide to DTC wine shipping.

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BevAlc Roundup | California Revamps Sales Tax Rules, What’s Impacting the DtC Market, and Is Climate Change Affecting How Wine Tastes?

Mon, 05/20/2019 - 15:59

We are now a little over a week away from our 2019 ShipCompliant by Sovos Compliance Wine Summit. This annual event, previously known as the DIRECT conference, is one of the highlights of the year for us at ShipCompliant by Sovos, as we are able to connect directly with our users on what is happening in the world of wine regulation and what changes we are making to our services to better enable this industry to remain in compliance with those regulations.

There have been a number of changes over the past decade both to the regulation of the wine market, particularly the direct-to-consumer shipping market, and to ShipCompliant itself. But what hasn’t changed is our commitment to connect with and support our users. So if you haven’t signed up yet, sign up today! This year’s Wine Summit will be held on May 30 at the Napa Valley Marriott.

For this week’s roundup, we look at recent changes to California’s sales tax regulations that will have a big impact on wineries making direct-to-consumer shipments in the state; there was also some major news last week in the world of wine criticism, when Robert Parker announced his retirement after decades of shaping the taste of wine; and we jump on the Game of Thrones bandwagon, and look at some recent brands that have come out based on the wildly popular series.

In case you haven’t heard, the 2019 Direct-to-Consumer Wine Shipping Report has been published. Download your copy today here.

Thanks for reading the Roundup this week. As ever, be sure to check out the rest of the ShipCompliant by Sovos blog for regular updates, and we’ll see you again in another couple of weeks.

Regulatory News and Discussions

TTB Newsletter | This week’s top news includes some of the most common reasons why we return alcohol beverage formulas for correction. Also, two of our senior leaders were recently awarded the 2019 Treasury Leadership Legacy Honor, and we’re hiring an alcohol labeling specialist in Washington, DC. TTB

California Amends Tax Rules for Delivered Sales Affecting Instate Wineries | California’s recent change establishes a requirement on in-state businesses to collect more local district taxes, which will affect almost every winery shipping wine in the state. ShipCompliant by Sovos

Trump’s Trade War With China Hurting U.S. Wine Industry’s Bid to Increase Sales There | New tariffs imposed by Beijing Monday will make U.S. wine an even more expensive product for Chinese consumers, as their leaders battle with the Trump administration in an escalating trade war between two of the world’s largest economies. Press Democrat

Majority of US Senators Support Permanent Tax Reform for Brewers, Importers | A majority of U.S. Senators support making permanent excise tax relief for alcohol producers and importers. Brewbound

Governor Signs Bill Changing LIquor Distribution Rules | Oklahoma Senate Bill 608 requires the top 25 wine and spirits manufacturers to offer their products to all wholesalers. The Journal Record

Another Attempt to Let USPS Ship Alcohol | Legislation has recently been reintroduced in the House to allow the Postal Service to ship alcoholic beverages to consumers. Fed Smith

Industry Updates: Market Conditions and Developments

A Tribute to Robert M. Parker Jr. | The father of modern wine criticism, our publication’s founder and namesake, my greatest mentor and a dear friend, it is with mixed feelings that I announce that Robert M. Parker Jr. will, as of today, be formally hanging up his wine criticism boots and retiring from Robert Parker Wine Advocate. Robert Parker Wine Advocate

US Wine, Beer, Spirits Consumption “In a Holding Pattern” as Public Leans Toward Less Alcohol | The huge size of the 2018 wine grape harvest in the North Coast and California and the changing tastes of U.S. consumers other beverages were evident in sobering sentiments of industry professionals and consumers presented at the outset of the event. North Bay Business Journal

Top Issues Impacting the DTC Channel | About five years ago, 90% of direct-to-consumer wine sales came from tasting room visitors and wine clubs. Now, that’s dropped to about 40% with the other 60% of DTC sales coming from online shopping, according to ShipCompliant general manager Larry Cormier. Wine & Spirits Daily

Pride in a Job Well-Done, or Blood Money? | The cost of learning the truth from the TTB about the benefits to investigators from making cases against industry members. Booze Rules

New Distribution Service Offers Brewers a Chance to Test Markets, Fill Excess Capacity | Starting in June, nine U.S. states will begin receiving limited shipments of popular but hard to obtain craft beers via a new program called “Guest Brewer.” Brewbound

Digestif

Wine Tasting in Westeros | Game of Thrones, one of the biggest television events in history, has spawned a range of merchandise. But is wine from a world of assassination, brutality and zombies safe to drink? Drinks Today

Do Your Favorite Wines Taste Different? | There’s a good chance it’s because of climate change. Heated

How Sulfites Affect a Wine’s Chemistry | Wine professionals discuss sulfur’s impact on everything from oxidation to aromatic compounds and texture. SevenFifty Daily

These Experimental Distilleries Are Using Science to Artificially Age Whiskies | From soundwaves to pulses, nothing is off limits. Robb Report

What Are the Most Asked Questions in a Wine Shop? | Unlike restaurants, where it’s easy to feel restricted by the selections or intimidated by sommeliers, wine stores are the perfect place to take your time and learn new things. Wine Enthusiast

 

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

The post BevAlc Roundup | California Revamps Sales Tax Rules, What’s Impacting the DtC Market, and Is Climate Change Affecting How Wine Tastes? appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

California Amends Tax Rules for Delivered Sales Affecting Instate Wineries

Wed, 05/08/2019 - 11:06

On April 25, 2019, the Governor of California approved Assembly Bill No. 147, amending the state’s rules on when and where businesses shipping through the state have a sales tax obligation, which will likely have major implications for wineries selling direct-to-consumer (DtC).

Over the last year, we at ShipCompliant by Sovos have been monitoring as states have adopted economic nexus rules following the Supreme Court’s ruling in South Dakota v. Wayfair last June, and how they impact the DtC wine shipping market. For the most part, these changes to nexus rules have been focused on increasing tax collection from out-of-state retailers.

California’s recent change, however, establishes a requirement on in-state businesses to collect more local district taxes, which will affect almost every winery shipping wine in the state.

Local district taxes are voter-approved taxes imposed by cities, counties and other local jurisdiction that are added to the California base sales and use tax rate.

What Does Assembly Bill No. 147 Require?

The main provisions of the bill require remote sellers to collect and remit California sales and use tax if the seller had over $500,000 in sales of tangible personal property for delivery into California in the preceding or current calendar year. A similar requirement had previously been set out by the California Department of Tax and Fee Administration (CDTFA) in December 2018, where the economic thresholds for remote sellers was set at 200 or more separate transactions or retail sales in excess of $100,000. The new bill raises the revenue threshold to $500,000 and removes the per-transaction threshold.

However — and this is where we see the biggest potential impact on California wineries, the bill also amends the rules regarding when an in-state and out-of-state business must collect local district taxes.

California law prior to Wayfair only required a business to collect a local district tax if the business was “doing business” in that district. Last December, the CDTFA set out a new rule, in light of Wayfair, stating that if a California business met the $100,000 in sales or 200 separate transaction threshold in a district then the business would be required to collect that district’s local taxes. This new rule went into effect on April 1, 2019.

This new bill changes that rule. Retroactively applying to April 1, 2019, and going forward, if a business makes over $500,000 in annual revenue in California, it is required to collect and remit all district taxes, regardless of how much revenue it receives from any single district. This means that all California wineries with an annual revenue of $500,000 or more will have to collect district tax on all shipments they make within the state, even for districts where they make a single shipment.

Non-California wineries have long been required to collect sales tax on shipments to the state, as a condition of getting a DtC license there. However, this requirement only extended to the state rate of 7.5% (6% plus the 1.5% state-wide local rate), but not to the district taxes. For those wineries, a district tax only applied if they were “doing business” in that district, which implied specific physical presence there. Going forward, non-California wineries will have to collect and remit the same district taxes for all locations in the state if they meet the $500,000 of California revenue threshold as an in-state winery.

What Can I Do to Prepare?

Wineries shipping DtC in California must now be ready to calculate local district taxes across the state, and cannot rely on only collecting tax based on their premises rate. This will require a concerted effort to look up rates across the state at the time of purchase, to avoid the potential pitfalls of under- or over-calculating tax collected from customers.

ShipCompliant by Sovos users currently can receive California district tax rates across the state. This can be very easily done by switching one’s California Tax Preferences to “Local Taxes.” Thereafter, any tax lookup for a California location, whether done in an account or through our integration with sales systems, will include the proper local district rate.

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We have seen a tremendous amount of change regarding tax policy over the last year as states move to expand tax obligations on out-of-state businesses. For the most part, DtC shipping wineries have not been greatly affected as most states have for years required them to accept a tax obligation in order to ship wine (except for a few states, like Colorado, Minnesota, and Iowa).

This change by California, however, will have a major impact on DtC shipping wineries, as California is both by leaps and bounds the largest source and destination for DtC shipped wine. Starting April 1, 2019, and going forward, the glut of these shipments will now need to have local taxes assessed and paid to the state.

View Assembly Bill No. 147 in its entirety.

Request a demo of ShipCompliant

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Colorado to Enforce Sales Tax Rules for Remote Sellers In June

Thu, 05/02/2019 - 15:36

When a winery ships wine direct-to-consumer (DtC) across state borders, the sale skips over distributors and retailers, who are generally the parties who collect and remit the recipient-state’s taxes. As such, when a state moves to permit DtC shipping by wineries, they often require that any applicant for a DtC license first accepts an obligation to pay the state taxes that it would otherwise receive.

Unlike most states, however, Colorado does not make the assumption of a sales tax obligation a condition of getting a DtC license. Instead, a winery shipping to the Centennial State would only need to collect and remit sales taxes if it has nexus (that is, a substantial connection) there.

Previously, nexus was only established by having a physical presence in the state. However, like many other states, subsequent to the South Dakota v. Wayfair Supreme Court decision, Colorado enacted rules which sought to compel sales tax collection and remittance responsibility on sellers based on their economic presence in Colorado, regardless of whether they may be physically located there.

In December 2018, the state of Colorado made substantial changes impacting the sales tax collection and remittance requirements imposed on both in-state and remote sellers. The state extended a grace period for companies to comply with these requirements through May 31, 2019.

But beginning June 1, 2019, under the new rules, many wineries will be required to collect Colorado state sales tax and any local sales tax for state-administered localities. The rate will be determined based on the location of your Colorado customer. These rules specifically do not impact any obligation sellers may have in home-rule localities (these are localities in Colorado that have determined to administer their sales taxes entirely independent from the state agency).

New Obligations for Remote Sellers

In line with other states, the requirement is imposed on any organization that, in the previous or current calendar year has:  

  • $100,000 or more of gross sales or services delivered in Colorado, including exempt sales.

Any winery that meets this threshold will now have nexus in Colorado and be required to collect and remit sales taxes on their DtC shipments of wine to the state. (Previously the state had indicated that retailers making 200 or more transactions in the state would also have nexus; however, in the latest rules from the state, that threshold has been removed.)

This will require that the winery takes the following actions:

  • Register with the Colorado Department of Revenue (DOR) as a Sales Tax Collector. This may be done at https://www.colorado.gov/revenueonline/_/.  Any winery that had previously registered as a Use Tax Collector will need to amend its registration.
  • During, or after, that registration the winery must also register under their Sales Tax Account for each tax jurisdiction that they will ship into. These jurisdictions are determined by the state, and while the winery is required to only register for those into which they actually ship, it may be worthwhile to register for all of them (683 in total) — the registration is at no cost.
  • For each tax jurisdiction that the winery selects, the DOR will assign a unique four-digit code that must be attached to the winery’s Colorado Account Number when filing their Sales Tax Returns, in order for the state to process how local taxes should be disbursed.
  • ShipCompliant users should make sure to enter these codes into their account so that we can properly populate the necessary Sales Tax Returns. We have recently added an upload function to our license portal so that a user can add all of their codes with one single action. If you are a ShipCompliant user you should receive direct messages soon that will more thoroughly explain how this should be done.

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Wineries shipping DtC have long had to deal with sales tax rules and regulations across the country, so in many ways they are much more prepared for the post-Wayfair world of economic nexus to which other remote sellers are just getting used. Nevertheless, there are still states like Colorado that are presenting new challenges for DtC wineries (and Colorado, with its uniquely complex sales tax policies, makes that an extra challenge).

Wineries would do well to review their sales tax practices to ensure they are best enabled to handle the changing world of sales tax regulation. We at ShipCompliant by Sovos are committed to providing that enablement.

The post Colorado to Enforce Sales Tax Rules for Remote Sellers In June appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Nominate Your Winery for the 2019 ShipCompliant Vinners Awards

Tue, 04/30/2019 - 15:14

Is your vineyard a Vinner? It’s time to find out.

The annual Vinners Awards will make their debut at the 2019 ShipCompliant Wine Summit in Napa at the end of May. Any vineyard that is a ShipCompliant customer can nominate itself or a peer to win an award on one of the following categories:

  • Most creative and captivating label
  • Most engaging tasting room experience
  • Most successful wine club promotion
  • The “must follow” Instagram account

Winners (or Vinners, in this case) will be announced in an awards show at the ShipCompliant Wine Summit on May 30. Aside from earning glory and fame, Vinners will be featured on the ShipCompliant website and receive an official award to symbolize their achievement.

All ShipCompliant customers are eligible; you do not need to attend the 2019 ShipCompliant Wine Summit to win an award.

Nominate your vineyard by May 10 to be eligible to win! 

The post Nominate Your Winery for the 2019 ShipCompliant Vinners Awards appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Roundup: Oklahoma Distribution, Black Wine Consumers, Climate Change

Mon, 04/29/2019 - 13:08
Oklahoma Distribution Laws Get Contentious, Why Doesn’t The Wine Industry Pursue Black Consumers?, and Climate Change and Wine

During this last couple weeks, there came and went the dubious — or at least psuedo — holiday of 4/20, a day based around consuming cannabis (thankfully, alcohol still has almost every other holiday claimed for its consumption). As such, it was likely no surprise in the number of articles we saw talking about pot’s burgeoning legalization and what that means for other industries — in particular the beverage alcohol industry. (Not that there hasn’t already been a lot said about that, from chicken little claims that the sky is falling to more mellowed relaxed comments that there’s plenty to pass around.)

To highlight these articles, we have selected three in particular that caught our attention, set out in a special section below. But there was lots of other news that came out as well, so in addition to Getting Into the Weeds, this week we look at how vague trade practice rules set out in the 1930s and 1980s are stifling growth today, also, ways for wineries to better engage with their customers online and spike e-sales, and what it takes to be a standout judge of whiskey.

In case you haven’t heard, the 2019 Direct-to-Consumer Wine Shipping Report has been published. Download your copy today here.

Our annual Global Compliance Wine Summit (previously DIRECT) will be held on May 30 at the Napa Valley Marriott. We are putting together a great schedule, so make sure to sign up soon.

Thanks for reading the Roundup this week. As ever, be sure to check out the rest of the ShipCompliant blog for regular updates, and we’ll see you again in another couple of weeks.

Regulatory News and Discussions

TTB Newsletter | This week’s top news includes the publication of our “TTB Bootcamp for Brewers” presentation given at the Craft Brewers Conference, information about which file types are compatible with Permits Online, and a TTB auditor job announcement. TTB

Is a 1935 Alcohol Beverage Federal Trade Practice Law Stifling Innovation? | Congress’ aim to prevent the recurrence of the “social evils” that led to Prohibition is the centerpiece of the unfair trade practice provisions of the Federal Alcohol Administration Act of 1935. Booze Rules

Tariffs Fomenting Turmoil in World Wine Markets | California is on the front lines of President Donald Trump’s unwise trade wars, and the wine industry is under fire. The Press Democrat

Are Crafts Looking to Kill the Pubs in Illinois? | There is a theory out there, that is actually backed up by statistics, that the presence of craft brewers is hurting bars and taverns. Irish Liquor Lawyer

Willamette Valley Wine Purity Bills Pass Oregon Senate | Two bills to raise the varietal and regional content standards for Willamette Valley wines passed the Oregon Senate on Wednesday, and now move to the House. Portland Business Journal

Duopoly or Pro-Business? Shots Taken In Oklahoma Liquor Distribution Fight | The difference between “shall” and “may” in one portion of Oklahoma’s new alcohol laws has left liquor stores, a locally owned wholesaler and some legislators pushing to break up what they call a duopoly in the liquor distribution market. NonDoc

Industry Updates: Market Conditions and Developments

Why Is the Wine Industry Ignoring Black Americans’ $1.2 Trillion Buying Power? | You see, apparently, black people know very little about wine. It’s a novelty for us, and when we do drink it, the sweeter the better. VinePair

Why Breweries Are Turning to Small-Format Cans | The opportunity to reach new customers is just one factor attracting brewers to the eight-ounce can. SevenFifty Daily

Amazon Wine 3.0: Is the Online Retail Giant Getting Back in the Wine Business? | Amazon has twice given up selling wine over the past decade, perhaps the two most notable flops in the e-commerce giant’s history. But it looks like the company may be getting ready to try again – call it Amazon wine 3.0. Wine Curmudgeon

Gallo Deals Are the Gifts That Keep on Giving for Premium Wine | The premium branded wine market can do with all the help it can get which is what makes E&J Gallo’s acquisition strategy potentially so important, not just for itself, but for the overall wine industry. The Buyer

How a Digital Negociant Helped Change the U.S. Wine World | The combination of greater DtC potential and digital commerce, when combined with a French ‘negociant’ model, led to surprising success for a California company. Forbes

Are You Selling Enough Wine Online? | Could it be that U.S. wineries are not reaching out to consumers via digital marketing the way companies in other consumer products industries are? Winebusiness.com

Getting Into the Weeds

What Does the Wine Industry Have to Learn from the Cannabis Industry? | Just as the burgeoning cannabis industry followed lessons from the wine industry as it has worked to establish its legitimacy, wine can learn from cannabis in connecting with consumers. Fermentation

Why Weed and Wine Have More in Common Than You Think | We want people to think of cannabis in the same way they think of wine, as a gourmet product. Wine Enthusiast

How to Succeed In Wine and Weed: The Herb Somm Tells Her Story | While some in the industry are attempting to sway consumers back towards wine, other brands and corporations are investing in marijuana as a way to diversify their holdings. Forbes

Digestif

Thinking Outside the Wine Box about Climate Change & the Future of Wine | Miguel Torres recently warned that the wine industry is not doing enough to fight climate change and there is no doubt that he is right. The Wine Economist

The Future Is Bright For Texas Wine | An emerging wine region on the cusp of something great. Wine Spectator

The Fine Art of Being a Whiskey Judge | A lot of blood, sweat, and tears goes into honing one’s craft; in this case, spirits. The Whiskey Wash

The post Roundup: Oklahoma Distribution, Black Wine Consumers, Climate Change appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup | TTB Labeling Comments Period Extended, Record California Grape Crush in 2018, and Be Your AVA’s Champion!

Tue, 04/16/2019 - 09:37

Last week saw the publication of a number of industry and agricultural reports from 2018, including global grape production, California wine crush, and craft beer sales, and we’re happy to say that more-or-less everything looks positive. Even the lower-than-in-the-past growth numbers for craft beer are a sign of continued success, especially when considered against other non-beverage alcohol industries.

But that’s hardly all the news we have to report on today. This Roundup also includes a couple looks at the looming ill-effects caused by the ongoing trade war and what might happen if it ratchets up against Europe. We then also look at the announced Gallo-Constellation deal, and hear how women are coming to lead and dominate the conversation about beer regulations in D.C.

In case you haven’t heard, the 2019 Direct-to-Consumer Wine Shipping Report has been published. Download your copy today here.

Our annual Global Compliance Wine Summit (previously DIRECT) will be held on May 30 at the Napa Valley Marriott. We are putting together a great schedule, so make sure to sign up soon.

Thanks for reading the Roundup this week. As ever, be sure to check out the rest of the ShipCompliant blog for regular updates, and we’ll see you again in another couple of weeks.

Regulatory News and Discussions

TTB Newsletter | This week’s top news includes the top 5 reasons why you should file your permit applications online versus mailing paper forms, plus information about TTB’s fiscal year 2018 annual report that is now available online, and an adjustment to the civil penalty for violations of ABLA. TTB

Looming Trade War Bodes Ill for Wine | U.S. Editor W. Blake Gray offers his take on the threat of tariffs against European wine. Wine-searcher.com

Wine Industry Floods the TTB With Its Opinions On Wine Nutritional Labeling | Last month the TTB extended its deadline for Notice No. 176, the so-called “Modernization of the Labeling and Advertising Regulations for Wine, Distilled Spirits and Malt Beverages,” until June 26, 2019. Forbes

FTC Kills Deal to Merge Alcohol Distributors | The U.S. Federal Trade Commission said on Monday it had pushed two wine and spirits distributors to scrap their merger because of “significant concerns” about the deal. Reuters

California Wineries Shut Out Form China Amid Trade War | When China imposed retaliatory tariffs on American goods last April, vintners at Wente Vineyards in Livermore feared the move would push them out of China, the world’s fastest-growing wine market, for months or years. They were right. SF Chronicle

Amazon Planning a Deeper Diver Into Alcohol Sales? A D.C.-Area Job Posting Suggests So | Amazon.com Inc. is looking for a booze business policy and lobbying expert, and it could portend a push into more alcohol sales for the online retail giant. Washington Business Journal

Industry Updates: Market Conditions and Developments

California Crushes Record 4.3 Million Tons of Winegrapes in 2018 | According to the report, the state crushed more than 4.28 million tons of wine grapes in 2018 – up by 7 percent compared to 2017, when the state crushed approximately 4 million tons of wine grapes. Wine Business

Global Wine Output Recovered in 2018 from 60-Year Low | After a 60-year low in 2017, when production was dented by extreme weather in Europe, including drought and storms, world output rose 17 percent last year to 292.3 million hectoliters. Reuters

CBC: Slowing Growth in 2018 Was “Not a Blip” | Slower growth and increased competition are the “new normal,” Brewers Association (BA) leaders hammered home on the second day of the trade group’s annual Craft Brewers Conference (CBC). Brewbound

What Gallo’s $1.7 Billion Buyout of Constellation’s Bargain-Priced Wines Really Means | The 30 brands include familiar winery names like Ravenswood, Clos du Bois, Manischewitz, Cook’s and Mark West, mostly bottles that sell for $11 or less. SF Chronicle

Digestif

Female Lobbyists Change Face of Beer Industry | The leading voices for the beer industry in Washington, D.C., are women, breaking the stereotype that beer is a male-dominated business. The Hill

On Wine Marketing — Be the Winery That Champions Your AVA | I’m here to urge wineries to consider being the champion of their sub-appellation; to be the winery that educates about all things home turf; to be the advocate and endorser of that officially recognized region they call home. Fermentation

What Is Oxidation Doing to My Wine? | Oxidation can be responsible for the flat taste of wine that’s past its drinking window, but it can also be the element that unlocks the array of flavors that wine grapes can offer. Wine Enthusiast

Three Studies Take A Look at Various Wine Bottle Closure Preferences | in 1999 synthetic was about 2% of the wine bottle closure market, screw cap was at 3%, one-piece natural cork was about 34% and technical (composite) cork made up 61%. Forbes

What’s Fueling the Rapid Growth of Hard Seltzer? | Drinks professionals discuss the factors behind the low-ABV category’s rise — and its impact on the industry. 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 | TTB Labeling Comments Period Extended, Record California Grape Crush in 2018, and Be Your AVA’s Champion! appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Celebrate National Beer Day by Getting Compliance under Control

Fri, 04/05/2019 - 12:52

Drinking beer is easy and fun. Brewing it is more difficult, but still entertaining. Distributing it to different states and managing a brewery without running afoul of a thick book of laws and shipping regulations? Well, that’s something else altogether.

There’s a reason April 7 is National Beer Day and not National Beer Regulation Compliance Day. Beer is fun. Compliance isn’t. But it’s necessary for brewers of all sizes, with states having wildly varying and inevitably confusing laws on how beer can be distributed and shipped nationwide.

Compliance in the face of competition

Of course, a brewery is a business, and it’s not all supposed to be fun. But in a practical sense, keeping up with a host of changing regulations is not something most craft breweries have the resources to do. The problem is that it matters.

In order to grow, breweries have to beat competitors to market with new products and get the attention of distributors, who can choose from multiple products on offer. A brewery that doesn’t know how to navigate compliance within a particular state could find itself unable to enter that market and therefore at a competitive disadvantage.

Competition for craft breweries is difficult as it is. Beer sales and production have actually fallen recently, but that hasn’t stopped more small brewers from entering the scene, as the number of breweries in the U.S. continues to grow rapidly. Those two factors combined leaves more brewers competing for a shrinking market share, making distribution a critical task for any company looking to get a foothold in the beer market.

Big corporations aren’t helping smaller competitors, either. Brewing giants have been snapping up much smaller competitors and rebranding them as “craft” brands but with the full support of giant corporate infrastructures behind them. That puts even more pressure on smaller brewers to keep their operations growing in the face of unprecedented resistance.

The advantages an automated solution for compliance  

Brewing innovation and smart marketing are what lead to growth for brewers. Compliance is more of a hassle, but it’s one brewers can’t ignore. That’s why the idea of a solution to centralize and automate compliance is so appealing. Trying to maintain staff to keep up with changes in regulations and distribution laws is prohibitively difficult and expensive, and doesn’t align with the core mission of constantly improving what’s in the keg or bottle.

With an automated compliance solution, brewers can shift the burden of keeping up with regulatory changes, making sure to have access to the latest rules and forms, while also working with a partner that can interface directly with federal and state regulatory agencies, like PRO. They can also eliminate expensive and error-prone manual processes for keeping up with distribution rules and instead automate compliance management, which frees up time for them to focus on their businesses.

Another advantage of an automated solution is the ability to boost distribution and increase efficiency by syncing information through a cloud-based solution that requires no on-site installation and little maintenance. Real-time visibility into market trends lets brewers monitor competition and have the insight they need to develop new concepts.

Going forward with confidence

Carving out a spot as a successful brewer isn’t getting any easier, and neither is handling the compliance processes that brewers have to master in order to grow their businesses. Brewers should be able to focus on beer, not on paperwork–a compliance solution lets them do just that.

 

Join ShipCompliant at the Craft Brewers Conference Happy Hour, Monday, April 8, at the CBC in Denver! Also, come visit us at booth 17076. Or discover why brewers have been turning to ShipCompliant for years to manage compliance processes.

The post Celebrate National Beer Day by Getting Compliance under Control appeared first on ShipCompliant | The software leader of the beverage alcohol industry.