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BevAlc Roundup: ShipCompliant Beer Summit, Crackdown on Interstate DtC, Oktoberfest-Proof Shoes and Blue Wine

Mon, 09/11/2017 - 12:57

In today’s roundup we’re pleased to announce that Paul Gatza of the Brewers Association will be our featured speaker at the ShipCompliant Beer Summit on Oct. 3. You’ll also find articles on how states are taking a hard look at interstate direct-to-consumer shipping, more news from Pennsylvania, updates from the TTB and new products that will not disappoint!

LegislativeUpdate

Some U.S. States Are Cracking Down on Interstate Direct-To-Consumer Wine Shipping | According to ShipCompliant by Sovos, at over $2 billion in 2016 sales, the more than 5 million cases of wine shipped Direct-to-Consumer (DtC) is fast making it an important segment of the wine business. Forbes

Price Hikes At PA Liquor Stores: Will Buyers Notice? | You might notice a change at the register of your neighborhood Pennsylvania State Store. Or you might not. Philly.com

Tax Reform: Will They or Won’t They? | Congress has been openly flirting with comprehensive tax reform for years. Will 2017 finally be the year they get it done? And if so, how will it impact breweries? Brewers Association

TTB Newsletter | Top news includes a reminder for alcohol beverage importers about how to satisfy TTB COLA documentation requirements in ACE, an announcement that TTB labs have received re-accreditation from ISO, and links to the help center for TTB online applications. TTB

IndustryUp
Paul Gatza of the Brewers Association To Speak At ShipCompliant Beer Summit | Paul Gatza, Director of the Brewers Association, is our featured speaker at the ShipCompliant Beer Summit in Denver on October 3rd! ShipCompliant

Focus on the ‘C’ for Better DtC Wine Sales | The key to a good direct-to-consumer wine program is continual customer engagement. Wines and Vines

Wine Access, Releasing Data, Reveals One of Every 36 Bottles Sold Is Rose | Here are some data points covering the U.S. wine market today, which Wine Access says comprises consumers that are “adventurous, curious, authentic.” Consumers appear to evolve. Wines & Vines

JustFun

Adidas Is Releasing Puke and Beer Resistant Oktoberfest Sneakers | If you’re looking for the perfect shoes to match your lederhosen at Oktoberfest, Adidas has the pair for you. Forbes

Blue wine is now a thing because your Instagram doesn’t have taste buds. (Un) Fortunately, we do. | The Spanish-based winemakers will soon begin selling their blue wine in the United States. Washington Post

The post BevAlc Roundup: ShipCompliant Beer Summit, Crackdown on Interstate DtC, Oktoberfest-Proof Shoes and Blue Wine appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Paul Gatza of the Brewers Association To Speak At ShipCompliant Beer Summit

Thu, 09/07/2017 - 19:23

We’re excited to welcome Paul Gatza, Director of the Brewers Association, as our featured speaker at the ShipCompliant Beer Summit in Denver on October 3rd!

Paul’s origin in the beer community started when he took up homebrewing in 1990. He worked on the bottling line at Boulder Beer and would sneak over to the brewhouse when opportunity allowed. Paul owned a pair of homebrew supply shops in Boulder and Longmont, Colorado from 1994 to 1998.

He served as director of the American Homebrewers Association for 7 years and is in his 17th year as Brewers Association director. Paul is ranked as a National Beer Judge by the Beer Judge Certification Program. Paul is also a former judge director of both the Great American Beer Festival and World Beer Cup, before moving to the judge panels for these elite competitions.

Who should attend the Beer Summit?

  • Leaders of regional breweries
  • Consultants who provide services to breweries
  • Members of the beer industry who focus on go-to-market regulatory compliance

Please ​join ​us ​on ​October ​3 ​at ​the ​Bottling ​Hall ​at ​the ​Great ​Divide ​Brewing ​Company ​Barrel ​Bar ​in ​Denver. We’ll enjoy a delicious lunch followed by ​an ​information-packed ​afternoon ​covering ​topics ​related ​to ​growing ​your brewery ​business ​in ​this ​crowded ​market. ​

Register before September 15 and take advantage of the $99 early bird rate!

The post Paul Gatza of the Brewers Association To Speak At ShipCompliant Beer Summit appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Oregon Wine Board Reports Increase in 2016 Sales Despite Reduced Vineyard Production

Mon, 09/04/2017 - 13:22

The latest Oregon Vineyard and Winery Census Report, recently released by the Oregon Wine Board, shows steady market gains for Oregon wine, even as grape yields decreased slightly.

Overall, the value of sales of Oregon wine in 2016 grew 12% from 2015, to just under $530m. These increased sales came largely from case sales — particularly those to states other than Oregon — and from the Direct to Consumer (DtC) market. However, they also reflect an overall increase in the average value Oregon wine per bottle.

This is because overall production by Oregon wineries was down by about 6% from 2015, despite a slight uptick in the number of wineries operating in the state. This decrease, though, more represents a return to normal yields, after gangbuster years in 2014 and 2015.

The increase in total sales revenue speaks to the great prestige and attention Oregon wine is receiving — both locally and nationally. Total case sales of Oregon wine grew by nearly 300,000 cases from 2015, but more than 200,000 cases of that growth came from sales in states other than Oregon. You can download the 2016 Oregon Vineyard and Winery Census report, as well as past years’ reports, from the Oregon Wine Board website.

This is contrasted with DtC sales, which dropped noticeably for both wine club and online orders. However, growth in onsite sales from tasting rooms easily covered those decreases, and indeed championed the overall growth in DtC sales of Oregon wine. This means, while people may be less inclined to buy directly from an Oregon winery remotely, they’re much more open to visiting Oregon wine country and bringing back the quality wines they find there. This also likely reflects greater attention from Oregon locals, recognizing that great wine is in their backyard, and taking day or weekend trips to the vineyards.

In all, Oregon wine is enjoying an upward trend. Production is returning to more normal, sustainable levels; and while more wineries are operating, there is not overwhelming expansion, which could dilute the market. Meanwhile, revenue at large is increasing, with certain markets benefiting a bit more than others. For now, things look good for the Oregon wine market; we hope to see this trend continue in future years.

 

Download the 2017 DtC Wine Shipping Report for a comprehensive view of the direct-to-consumer wine shipping market.

The post Oregon Wine Board Reports Increase in 2016 Sales Despite Reduced Vineyard Production appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup: Distribution trends, The New Craft Brewer Seal and a Slave’s Crucial Role in Whiskey History

Tue, 08/29/2017 - 14:00

As summer winds down and we look toward the changing colors of fall, changes are also afoot in the wine, beer and spirits worlds. In this roundup, we explore evolving trends that affect how alcohol is sold and distributed. We also dive into the science of whiskey, and the staying power of canned wine. And finally, how an African-American slave contributed to the start of one of whiskey’s most iconic brands.

LegislativeUpdate

So Far, Compromise Eludes Mass. Alcohol Task Force | Key members of the state’s alcohol industry are tempering expectations that a task force reviewing Massachusetts’ booze laws will deliver sweeping reforms to how beer, wine, and spirits are sold and distributed in Massachusetts, saying it’s more likely to result in modest tweaks. Boston Globe

Knoxville Liquor Store Going Out of Business, Blames Wine In Grocery Stores | In the year since grocery stores started selling wine, some local liquor stores are feeling a loss in business. WATE.com

American Single Malt’s New Horizons | Distillers are assessing how to introduce the spirits and define its category more clearly, especially in terms of its similarities and differences with Scotch, Irish, and Japanese single malt. SevenFifty Daily

IndustryUp

Giant Corporations Aren’t The Only Ones Buying Up Breweries Anymore | Longstanding mid-level breweries are starting to buy up smaller beer companies as well. VinePair

Why Wholesalers and Retailers Should Embrace the Independent Craft Brewer Seal | There are plenty of reasons for distributors and retailers to be excited about the seal, and ways to incorporate it into their promotions and selling tactics. Brewers Association

Direct Wine Sales, Napa Style | Wooing wine lovers directly, enticing them with club memberships, special food and wine events, email blasts and more is essential, especially for small wineries. North Bay Journal

Avoiding Wine Brand Redesign Pitfalls | Take care, only about one out of every 10 brand redesigns delivers a significant sales impact and half of them typically hurt a brand. Wines & Vines

JustFun

When Jack Daniel’s Failed to Honor a Slave, an Author Rewrote History | Fawn Weaver was on vacation in Singapore last summer when she first read about Nearest Green, the Tennessee slave who taught Jack Daniel how to make whiskey. New York Times

The Best Way To Drink Whiskey, According To Science | Does adding water to whiskey really make it taste better? Washington Post

The Next Big Thing For Wine Lovers Is Canned Wine — Here’s Why | The canned wine category has exploded in the past year, and it provides more accessible and in many ways more user-friendly products for consumers. Forbes

The post BevAlc Roundup: Distribution trends, The New Craft Brewer Seal and a Slave’s Crucial Role in Whiskey History appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Nurturing Your Customers – Including Wine Club Members – is the Key to Direct-to-Consumer Success

Fri, 08/25/2017 - 17:22

As summer slowly fades away, the wine industry can look forward to busier days ahead. Whether it’s the chillier weather, or holiday gift giving, wine sales — and especially Direct to Consumer (DtC) sales — tend to peak.

But just because the entire wine market tends to grow at this time of year doesn’t mean you can complacently expect to benefit with everyone else. Now is a critical time to make sure you’ve cultivated your customer base well enough so that your place in the overall wine market thrives.

Recent data from the Silicon Valley Bank (SVB), available in the July 2017 Wine Business Monthly, shows where success in the DtC market comes from. Unpacking some of this data provides insights that can help you improve your DtC presence.

What Makes A Winery Succeed In The DtC Market? Connecting With Your Customers

First, why is it so important to make sure your DtC market is primed to succeed? As the SVB data and our own annual Direct-to-Consumer report show, DtC sales make up a large, and growing percentage of total wine sales.

Fully half of all sales for wineries with less than 25,000 cases in annual production come from DtC sales. For even smaller wineries, who face greater difficulty breaking into the 3-tier market, this percentage averages at around 70% of total sales. The DtC market, then, provides a way to avoid the pains of relying on distributors and trying to distinguish your brand in crowded wine and liquor stores.

But how, then, do you make your DtC market thrive? The best way to encourage customers to spend, and come back to spend again, is to cultivate a deep connection with them.

At a base level, this means following a number of common marketing tools: create a vibrant brand; develop a story that explains your brand and allows your customers to connect on a personal level with you; make sure you can distinguish your story from your competitors.

With wine sales, though, there is one key action you can take to make sure that you’ve established that connection with customers: grow your wine club. Wine clubs provide a unique and direct link to customers. They’ve shown their commitment to your brand by making the effort, and possibly paying money, to join your club. They are ready to receive your messages regularly, and want to hear about deals and what’s new. Per the SVB data, wine clubs are also key revenue generators — wineries with more wine club members see more regular income from DtC sales, and those sales are generally for more expensive products than one-off sales.

What Makes A Great Wine Club? The Experience

Not all wine clubs are created equal. There can be enormous regional differences affecting how effective wine clubs are, and how they succeed. For instance, tourist destinations, such as the Napa or Sonoma Valleys generally see higher revenues from their wine clubs than other regions. In part this is because Napa and Sonoma wineries tend to charge more for their wines. But it also reflects the extra effort that these wineries put into their wine clubs.

The SVB data shows, perhaps contrary to expectations, the vast majority of Napa and Sonoma wine club members live farther than a day trip away from the winery. These areas are destination spots; visitors will come from far and wide to enjoy the experience, and will likely treat a visit to these regions as part of a larger vacation. It is therefore more important for these wineries to create that direct connection with the customers, to make sure that they aren’t forgotten when the customer is back home in Michigan or Georgia. It therefore shouldn’t be a surprise that wineries in these regions depend more heavily on wine club sales.

Other regions, such as those less renowned for wine, like New York, Virginia, and Texas, but also some more developed wine areas like Washington, tend to rely more on day trips, according to the SVB data. This doesn’t mean that wine clubs are less important to these wineries, just that there can be a different flair to them. Instead of advertising deals and bulk shipping options, these wineries can focus more on events and the personal, local appeal that these wineries have.

It also can help to attune the tasting room experience for your wine club. The SVB data show that different services and styles can greatly affect the visitor’s likelihood of joining a wine club. More relaxed and open tasting rooms, say where the tasting bar is standing only or with casual seating, tend to draw more visitors than more formal tasting bars and private tastings. However, the more casual approaches also have lower rates of conversion to wine clubs, and less expensive average tasting room purchases. So a winery should find the right balance: do you want to bring in more people, and rely on those numbers to make revenue, or will you speak to a more select, but more likely to spend, audience?

The tasting room experience is only the first half of the process. Follow-up is key to turning an initial good impression into an enduring connection. Customers appreciate personalized notes. A handwritten thank you letter, or an email directed to a specific client, can go a very long way to letting your customers know you care — and that they should purchase more wine.

When your club members do make an order, it’s a great idea to let them know how the shipment is coming along. Merely sending them an invoice can be cold. Consider regular and friendly updates, showing them that their wine is on the way and being handled with care. Being proactive and communicating when there is a hitch in the delivery can turn a potential problem into a success. The package may be with the carrier, and out of your hands, but the consumer will still reach out to you for support. If you’re ahead of the game, and let them know when an issue has come up (say the carrier can’t deliver to their address, the package is damaged or they need to go to the carrier’s store to sign) you can be a hero in their eyes.

While all customers should receive high-quality treatment, wine club members represent a select group of customers who have shown their commitment to your brand. Making sure that they know they’re respected and valued can go a long way to ensure they’ll keep up that commitment. Maintaining your clubs, fostering them into lifetime relationships, is increasingly key to succeed as the entire DtC market continues to grow.

Again, these suggestions may seem like common sense. But as we near the busy time of year for wine sales, it’s critical to make sure that your wine stands out from the rest. Having your wine club succeed is one of the best ways to make sure your entire brand succeeds.

 

Download the 2017 DtC Wine Shipping Report for a comprehensive view of the direct-to-consumer wine shipping market.

The post Nurturing Your Customers – Including Wine Club Members – is the Key to Direct-to-Consumer Success appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup | NAFTA Talks: U.S. Wants Changes To How Canada Sells Wine, Common Carriers Are Requiring Proof of DtC Licenses, and Craft Beer Inspired Candles

Mon, 08/14/2017 - 17:03

Today’s roundup covers US wants changes to the way Canada sells wine, common carriers respond to state scrutiny by requiring proof of DtC licenses, and craft beer inspired candles. Enjoy! !

LegislativeUpdate
Georgia Will Soon Join the Rest of the U.S. By Allowing Producers to Sell On Premises | On September 1, 2017, SB 85 will go into effect, permitting licensed breweries and distilleries in the state to sell to consumers directly from their premises. ShipCompliant Blog

NAFTA Talks: U.S. Wants Changes To The Way Canada Sells Wine | Provinicial rules regarding the sales of wine are a U.S. target in trade negotiations. Huffington Post

Republican Lawmaker Files Bill To Change Three-Tier System | Wisconsin Republican lawmakers say they want to restart a conversation about the state’s liquor laws by introducing a bill they say will remove barriers to business growth. The Capital Times

State Liquor Law Change Helps Micro Distilleries Expand Reach | It soon might become easier for Ohio’s micro distilleries to get their vodkas, gins and whiskeys on barroom shelves thanks to a change in state rules that will allow small-time distillers to sell products directly to pubs and restaurants. Toledo Blade

IndustryUp

Common Carriers Respond to State Scrutiny By Requiring Proof of DtC Licenses | Common carriers are heightening their policies of requiring proof of an active DtC shipping license before they will contract with businesses to deliver packages containing beverage alcohol. ShipCompliant Blog

UPS Opens the Doors to European Shipping | Close to 40 countries will be able to receive domestic wine. WineBusiness.com

“Disruptive” Wine App Vivino Tops US $40M Sales | Speaking to CNNMoney this week, Vivino founder and CEO Heini Zachariassen said that wines worth more than $40 million have been sold through the site. The Drinks Business

Moonshine Is Not Just an American Thing | Moonshine has a global history, on ethat goes back 600 years, and probably even further. The American Spectator

JustFun

Spicy scents of craft beers waft from these candles | Creating candles that have scents inspired by craft beer flavors has helped diversify a small family distributor’s business because a change in state law has cut into their sales and where they can sell major beer brands. Pittsburgh Post-Gazette

Why expensive wine appears to taste better | Price labels influence our liking of wine: The same wine tastes better to participants when it is labeled with a higher price tag.  PHYS.org

The post BevAlc Roundup | NAFTA Talks: U.S. Wants Changes To How Canada Sells Wine, Common Carriers Are Requiring Proof of DtC Licenses, and Craft Beer Inspired Candles appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Georgia Will Soon Join the Rest of the U.S. By Allowing Producers to Sell On Premises

Fri, 08/11/2017 - 17:38

On September 1, 2017, lovers of craft beer and spirits in Georgia will have something to toast. That’s the day that SB 85 will go into effect, permitting licensed breweries and distilleries in the state to sell to consumers directly from their premises.

Under the soon-to-be-implemented rules (details from the state can be found here), licensed beer and spirit manufacturers with a Georgia-based facility will be allowed to sell their products for on-site consumption without having the customers first go through a tour of the facility (as Georgia’s laws previously required). Further, these licensed manufacturers will also be able to sell their products for off-site consumption without having to go through the three-tier system (that is, sell first to a distributor, and then buy back their goods before selling to a consumer).

Breweries will be limited to selling only 3,000 barrels (31g/BBL) of beer they produce per year, and only a case (288mL) of beer per day per customer. Distillers are limited to selling only 500 barrels (53g/BBL) of spirits they produce per year, and only 2.25 L per person per day.

Georgia Becomes Like Everywhere Else
Every other state in the U.S. already has some sort of provision allowing manufacturers to sell their products directly from their production facilities. While the details of these provisions vary state to state (as do pretty much all rules concerning the beverage alcohol industry), there are common themes.

Generally, these rules give a preference to small, craft producers. Production caps may limit the right to only small-scale producers. Restrictive sales caps are also common (Georgia’s new rules has these). Often only certain licensees (say a “craft distillery” or a “farm brewery”) are permitted to sell. And frequently they can only sell beverages they produce themselves.

Georgia is also not alone in working on their rules on how and when producers can self-sell. Even states with well-established craft markets continue to develop them. A bill was recently filed in the Wisconsin legislature that would extend existing self-distribution rights for certain producers.

Craft distilleries would gain the right to directly sell and distribute their spirits, and be able to sell other beer and wine products. And the annual production caps for breweries and wineries who can self-distribute and sell onsite would rise to 20,000 barrels of beer and 50,000 gallons of wine, respectively.

These permissions are not without controversy. (The Wisconsin bill is being vociferously opposed by the Wisconsin Tavern League, for one.) These rules are exceptions to the standard three-tier model of beverage alcohol sales, and parties with ingrained interests in the three-tier system will argue against any stretching of the existing fabric. Distributors and both off-sale and on-sale retailers complain of the increased competition and the assault on their established place in the three-tier system.

There is some merit to these complaints. The value of the three-tier system is well established (even those who argue to disestablish the three-tier system ultimately come down on the side of fixing problems they see, not blowing up the whole thing). Any changes to the three-tier system should be made with proper care and consideration, and not merely because they’re in vogue.

But there is also obvious merit to permitting at least some right to self-sell for manufacturers. After all, why else would every state have some kind of allowance?

Supporting local manufacturers — and especially small businesses, like craft producers and brewpubs — has enormous benefit to local economies. According to the Brewer’s Association, craft beer contributed $55.7 billion to the U.S. economy in 2014, with states with well-developed craft markets, like Colorado and Oregon, benefiting the most (particularly on a per-capita basis). The success of most wineries is largely dependent on being able to sell directly from their production facilities. After all, that’s exactly what we all look for in a wine-country vacation, whether it’s in Napa, the Willamette Valley, or up-state New York.

The licensees who most benefit from these self-sale privileges are those who have the most trouble getting the attention of distributors and retail stores. If some larger producers also can take advantage of selling some of their goods directly from their facilities, that may be a worthwhile cost in order to benefit the smaller producers.

Those large producers will also still need to work in the three-tier system for the vast majority of their sales; after all not everyone who enjoys a Bud Light will suddenly only buy it from an Anheuser-Busch plant.

Often arguments against expanding self-sale privileges tend to rely on hyperbolic warnings on how these allowances will ruin the existing beverage alcohol market. These fears need to be couched in the fact that, despite the growth of the craft industry, it’s still a fraction of the overall market.

The vast majority of beer is still sold by the big producers through the standard three-tier model. Reportedly, somewhere around 3 out of 4 beer drinkers still have not tried a craft beer. Reports that craft has killed the larger beer market are definitely premature.

 

Learn more about how ShipCompliant can keep you current with state regulations. Request a ShipCompliant demo today!

The post Georgia Will Soon Join the Rest of the U.S. By Allowing Producers to Sell On Premises appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Common Carriers Respond to State Scrutiny By Requiring Proof of DtC Licenses

Fri, 08/04/2017 - 16:54

In many ways, the Direct to Consumer (DtC) market for wineries has never had it better. The number of states that prohibit it is down to just a handful, and the states that do allow it are easing up on some onerous compliance requirements, including package label rules and reporting frequency.

But as the DtC market expands, there comes added scrutiny. State regulators want to ensure that the DtC sales that are coming across their borders are legitimate, legal sales. As a result, common carriers are heightening their policies of requiring proof of an active DtC shipping license before they will contract with businesses to deliver packages containing beverage alcohol.

A key focus of this scrutiny is on ensuring that only properly licensed entities are engaging in DtC sales. Since common carriers can be liable if they deliver a package containing alcohol that didn’t come from a licensed party, states will often threaten them with fines or other penalties when they cannot go after the unlicensed party. This may occur because that party is in a different state, it can be quite difficult for the state to bring an action against them. This has led Common carriers to escalate their policy of requiring proof of licensure before agreeing to carry packages containing beverage alcohol.

This has long been a policy of the common carriers, but its increased enforcement has caught some in the DtC market a bit off guard. However, by ensuring that a license check is done, common carriers are demonstrating their commitment to a compliant and legal DtC market. Ultimately, this should benefit all of us who want this market to succeed.

Why Are Common Carriers Asking For My DtC License?

In order to operate a brewery, winery, or distillery, you need a license. In order to operate a bar or liquor store, you need a license. You are permitted to do only those activities that are expressly permitted by that license. If you exceed those permissions, you risk fines and loss of license.

This principle of licensure extends into the DtC market. 43 of the 45 states that currently allow winery DtC sales have a unique license that is required in order to receive orders from a customer in that state and then fulfill that order by shipping it to that customer via a common carrier. (Both Alaska and Minnesota allow limited DtC shipment without requiring a permit, but both did consider permit bills in 2017 and are likely to require them soon.) If you want to sell into all 45 states, you will need 43 different licenses. (This also affects non-supplier DtC participants; for instance, common carriers often need to be licensed themselves.)

Each state imposes its own restrictions on who can receive licenses for DtC sales. For the most part, these licenses are limited to only wine producers who have an active Wine Producer license from the TTB and an active wine manufacturing license from their home state. Seven states also allow beer producers to get a DtC license; three states allow spirit producers to get a DtC license (North Dakota, Nebraska, New Hampshire); about four states allow importers to get a DtC license (New Hampshire, Nevada, West Virginia, and Wyoming); and 10 states allow out-of-state retailers to get a DtC license.

Every state is enabled by the 21st Amendment to set up its own, unique set of beverage alcohol regulations, including setting rules about DtC licenses. This, however, can cause a lot of confusion for market participants. Not only is there so much to know, it’s possible to not know how much there is to know.

Through the efforts of organizations like Wine Institute and Free the Grapes!, many wineries are largely aware of this complexity. However, a number of other market participants may not be as aware.

At ShipCompliant, we frequently hear from off-site retailers (i.e. liquor and wine stores) looking to become active DtC sellers. They are aware of the successes of the DtC market, and want to enjoy some of that success themselves. Many states do allow local retailers to receive orders from in-state customers and fulfill them, either through a common carrier or with their own vehicles. So they often will assume that this privilege extends to receiving and fulfilling orders from out of the state, without realizing that in order to sell into those other states, they have to follow the laws of those other states. However, unless the retailer actually has a DtC license from that other state, selling into that state is illegal.

States are reporting lots of sales coming improperly from unlicensed entities. When a state sees that some DtC orders are improper, it increases scrutiny on all DtC sales. Common carriers are a lynchpin in the DtC market, and so often become the target of states’ scrutiny. Several states have threatened common carriers with fines and other penalties, unless they can ensure that they are only fulfilling beverage alcohol orders coming from properly licensed businesses.

This increased attention has led common carriers to increasingly require physical proof of a valid DtC license before they will establish a new or renewed contract for receiving packages. For compliant businesses, this should be a relatively minor ask — just provide a copy of your active, valid license for every state you want to contract with a common carrier to deliver to.

For businesses that have been operating improperly in the DtC market, this has been a bit of a wakeup call. Some shakeout is inevitable as non-compliant businesses become aware of existing rules, and refocus their business on where they can sell compliantly.

The result of these efforts should be a strengthened DtC market. If there are fewer improper sales going on, there should be a decrease in state scrutiny, relieving some pressure on compliant DtC sellers. DtC sellers who take pains to be compliant, through licensure, order reviews, tax remittance, and proper reporting, should be vindicated for their efforts.

It is also possible that DtC privileges could be further extended to breweries and distilleries, or even retailers. One of the reasons the DtC wine market has been so successful is that customers demand quality, including rare products that aren’t normally available in their local markets. If they cannot find them available anywhere online, as improper actors who used to fulfill these orders are removed from the market, they may decide to engage politically and demand their local legislatures to open the market up.

Ultimately, this increased scrutiny underscores how important it is to be compliant in the beverage alcohol industry, and the DtC market in particular. States are tasked with overseeing public safety, and will take necessary steps they deem fit to ensure that happens. By shoring up the ranks of the compliant actors, the DtC market at large can prove it conforms to the principles of a safe and productive beverage alcohol industry.

 

Learn more about how ShipCompliant can keep you current with state regulations. Request a ShipCompliant demo today!

The post Common Carriers Respond to State Scrutiny By Requiring Proof of DtC Licenses appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

BevAlc Roundup | Total Wine Wins Challenge on Discount Pricing, Do Your Compliance Prep in Summer for a Productive Winter and Fall, and Craft Breweries Across the U.S. Unveil Their Beer Recipes in New Guide

Mon, 07/31/2017 - 16:46

July is almost over, but the roundup is in full swing, covering Total Wine’s win on discount pricing in Massachusetts, compliance prep in summer creates a productive winter and fall, and craft breweries across the U.S. unveil their beer recipes in new guide. Cheers!

 

LegislativeUpdate

 

Total Wine Wins Challenge on Discount Pricing | A Boston judge has ruled that Massachusetts alcohol retailers can legally sell booze at deep discounts when they order it in bulk, rebutting state regulators who said the practice can violate a state law that prohibits selling alcohol at less than cost. Boston Globe

Lawmakers Say They’re In No Hurry To “Fix” .05% DUI Law | Utah lawmakers won’t take up the issue of amending the controversial DUI law before the 2018 general session; and might not even then. Utahpolicy.com

NAFTA Renegotiations Boost Pressure on Wine Relations | Canada is No. 1 country for U.S. wine exports, but discriminatory practices remain. Wines & Vines

 

IndustryUp

 

Beer Remains the Preferred Alcoholic Beverage in the U.S. | Americans who drink alcohol continue to say they most often choose beer (40%) over wine (30%) and liquor (26%). Gallup

Distillers Call For Greater Transparency in Vodka | Vodka has, however unfairly, a long-standing reputation for smoke-and-mirrors marketing. Is a lack of transparency in the category obscuring consumer educaiton? The Spirits Business

California Case Study: Sales Shift to Craft While Business Models Remain Consistent | Brewers Association Chief Economist Bart Watson reviews Califronia beer sales data to evaluate the U.S. small brewering market. Brewers Association

Do Your Compliance Prep in Summer for a Productive Winter and Fall | Compliance and regulatory concerns for December’s products should also be top of mind in July. Getting your labels and other registrations in order now can save you a lot of turmoil later. ShipCompliant

Drizly Unveils “Industry First” Data Hub | On-demand alcohol delivery service Drizly has created an online hub that provides “unprecedented intelligence” on emerging trends, pricing and product movement, called Drizly Data Distllery. The Spirits Business

JustFun

 

Craft Breweries Across the U.S. Unveil Their Beer Recipes in New Guide | Celebrating local, independent breweries, the American Homebrewers Association (AHA)—the leading community for homebrewers—today unveiled its inaugural 50-State Commercial Beer Clone Recipes Guide. Brewers Association

A Better Way to Make Drinks and Drugs | Print me a brewery. The Economist

There Are Blends and There Are Blends | Under the U.S.’s unique rules, “blended whiskey” is mixture of at least 20 percent straight whiskey, the remainder being whiskey or neutral spirits. Chuck Cowdry Blog

The post BevAlc Roundup | Total Wine Wins Challenge on Discount Pricing, Do Your Compliance Prep in Summer for a Productive Winter and Fall, and Craft Breweries Across the U.S. Unveil Their Beer Recipes in New Guide appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Do Your Compliance Prep in Summer for a Productive Winter and Fall

Wed, 07/26/2017 - 15:00

It’s been a hot July, meaning stores are stocked with all the citrusy-session beers and cucumber lagers that breweries put out to slake the summer sun. As this seasonal selection gets drunk down, behind the scenes those breweries are diligently producing the spiced and pumpkin-ed beers that so reflect the fall and holiday seasons. The same is true for wineries and distilleries, as they take stock out of bond to begin filling bottles that will grace the shelves months from now.

It’s an inherent condition of the beverage alcohol industry that manufacturing is always ahead of consumption — we’re always making now what we’ll be drinking down the line. So it’s natural for a manufacturer to be thinking of December’s flavors in July.

That also means that compliance and regulatory concerns for December’s products should also be top of mind in July. Getting your labels and other registrations in order now can save you a lot of turmoil later.

Getting Ahead of COLA Requirements

Your labels are all designed and your product is getting ready to package–what now? A good first step is to get your Certificate of Label Approvals (COLAs). Any product that is going to be sold from one state into another requires a label review by the Trade and Tax Bureau (TTB). This is how the TTB makes sure the labels have all required information (and none that is prohibited).

In years past, this may have been the biggest hold up in the go-to-market process. However, thanks to increased federal funds that the TTB has received in recent years, allowing the bureau to hire additional COLA analysts, the time for receiving approval is now down to less than a week for all product types.

However, if your application is returned for revisions, that can add more weeks to the process. If you’re registering a product that needs formula approval, that adds an extra step even before you get to label approvals.

If you’re just updating a product, however, say by changing the vintage year on a bottle of wine, or updating the holiday scene on a Christmas ale, you may be able to avoid going to the TTB entirely. Over the last couple of years, the TTB has greatly increased the number of allowable revisions that a supplier can make to their labels that do not require a new or revised COLA. Make sure to check the list of allowable revisions, and see if you can’t cut out a few weeks processing time.

Next Step: State Registrations

It’s necessary to ensure you’re legally permitted to sell your products in each state that you want to sell in. At a very basic level, this entails getting licensed as an out-of-state supplier. Most states do require suppliers to get a license in order to sell to local distributors. A more complex and time consuming process is to register your products with the each state’s alcohol board.

A few states don’t have any kind of registration or notice requirement for selling products. But these states are definitely a minority. Most states want some kind of notification that your products will soon be appearing in their restaurants, bars, and liquor stores. Depending on which states you sell in, the complexity and cost can vary widely.

There are states that make the process very easy. These states just want a notice that your products are coming. They’ll accept a COLA as proof of compliance with all local rules, offer online registrations and may even approve your registrations as soon as you submit them.

Then there are states that make the process, well, less easy. They have their own rules for what must appear on a label, and what cannot. They review each label thoroughly, possibly adding weeks to your go-to-market timeframe. They may charge a heavy fee for each label or brand you register. It’s important to know that these burdens are out there so you can plan accordingly and your products make it to market on time.

Remember Your Distributors

It’s not a regulatory burden (at least not typically one), but developing your distribution strategy is vital to actually getting your products into the marketplace. Talk to your distributors and make sure they’re prepared to take on your seasonal products. Check that they have the capacity to take on additional labels and brands, and are ready to market your products effectively.

Having a solid contract, which clearly indicates your distributors’ responsibilities and obligations, is a critical initial step when bringing products to market. Now that you’re going to have more brands and labels for distribution, check in again with your distributors and make sure they’re aware of what they need to do to make sure your products are properly sold and distributed.

If you foresee having complications with your distributors, then get prepared for a the possibility of a complicated and messy process. Most states have “franchise” rules, which can severely restrict your ability to re-negotiate with distributors and resolve problems you’re having. Although franchise rules are more prevalent for beer products, wine and spirit suppliers may also come up against them in several states.

This is one reason why having a solid initial contract is so important. Changing your distribution relationships is a tenuous process, which should only be done carefully with guidance from legal counsel and a great deal of patience.

It’s always a good idea to stay on top of regulatory requirements in the beverage alcohol industry. Whether that has to do with regulatory issues or day-to-day business concerns, it pays to think ahead. So while your customers’ glasses are filled with refreshing IPAs, Rosés, and mojitos, it’s also time to be thinking about those heartening drinks they’ll be enjoying this winter.

 

Learn more about how ShipCompliant can keep you current with state regulations. Request a ShipCompliant demo today

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Christmas in July: Wineries Can Avoid UPS Holiday Surcharge With Early Direct-to-Consumer Sales

Tue, 07/18/2017 - 11:00

Wineries shipping direct-to-consumer via UPS may be affected by a new holiday shipping surcharge.

For Direct to Consumer (DtC) wineries, the hot summer months trend to slower sales. Instead, it is the cooler and more festive winter months when DtC sales really peak. However, a recent announcement by UPS regarding a plan to add delivery surcharges this November and December may affect how wineries should plan for the holiday season.

What Did UPS Announce?

According to the June announcement, these shipping surcharges will apply:

  • November 19 — December 2: an additional $0.27 will be applied to packages shipped through UPS Ground Residential.
  • December 17 — 23: a $0.27 surcharge will again be applied on UPS Ground shipments; an additional $0.97 on both UPS 2nd Day and 3rd Day Air shipments; and an additional $0.81 charge on UPS Next Day Air.

The additional charges will also apply on all Large Packages and packages that exceed maximum size limits from November 19 through December 23.

According to the announcement, these additional rates are designed to mitigate the extra costs that the shipping company assumes during the holiday season. In 2016, UPS had an average daily volume of over 30 million packages during the holiday season. This is compared with an average daily volume of around 19 million packages the rest of the year.

To accommodate this significant increase in daily shipping, UPS hires about 95,000 seasonal employees. The surcharges, therefore, more reflect the great success of the online retail industry as much as the very real costs of home deliveries.

Towards the end of June FedEx announced that it does not have any current plans to institute a similar holiday surcharge. However, FedEx faces the same pressure as UPS to meet the holiday surge in shipping, resulting in much greater operational costs. So it is possible that FedEx may change its mind between now and the holidays and establish surcharges.

What Does This Mean For DtC Wineries?

Since these surcharges won’t apply until much later this year, there is plenty of time to anticipate and plan for their effects. The biggest consideration, really, is how much these surcharges may affect your bottom line. The answer depends on how you charge for shipping costs.

If you charge customers with the actual cost of shipping, then they’ll see a slight bump for shipments in November and December. Shipping costs for DtC wine are generally on the more expensive side (because of the weight of wine), so a 27 or 97 cent bump may not be too noticeable.

If you provide a flat fee for shipping, you may choose to absorb the extra costs. Or, you may decide to raise that fee for certain weeks later this year.

Direct-to-consumer wineries are largely prohibited from offering any free incentives to customers, which includes free shipping. But many wineries still do offer vastly reduced or merely nominal shipping charges. In which case the concern of whether the winery will take on the cost of the surcharge itself would apply.

Alternatively, encouraging customers to make their holiday purchases earlier in the year — say in October — could be the best way to go all around. Everyone would avoid the surcharge fee, consumers could assure that they’ll get their holiday wine in time, and UPS would benefit by having a reduced package load at what is otherwise a very busy time of year.

 

Download the 2017 DtC Wine Shipping Report for a comprehensive view of the direct-to-consumer wine shipping market.

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BevAlc Roundup | U.S. Distillers Brace For Possible EU Backlash Against Bourbon, Amazon Isn’t Developing Its Own Wine…Yet, and “The Sideways Effect”

Mon, 07/17/2017 - 14:00

Today’s roundup covers U.S. distillers brace for possible EU backlash against bourbon, Amazon isn’t developing its own wine…yet, and ‘The Sideways Effect’: how a wine-obsessed film reshaped the industry. Enjoy!

 

LegislativeUpdate

 

Approaches to Spirits Direct Shipping | Today nearly every state—plus the District of Columbia—allows wineries to ship wine across state lines directly to in-state consumers. The same cannot be said for spirits. Alcohol Law Advisor

U.S. Distillers Brace For Possible EU Backlash Against Bourbon | American distillers say they are concerned about potential EU tariffs against bourbon, if the U.S. imposes a tariff on steel. NPR

Advocates See a Chance to Raise Mass. Alcohol Tax | As Massachusetts lawmakers debates new taxes on marijuana of anywhere from 8 to 28 percent, public health advocates say there’s another drug that needs a tax hike: alcohol. Boston Globe

 

IndustryUp

 

New Brewer Seal Helps Craft Beer Stand Out From The Crowd | Craft brewers can better distinguish their products from major producers’ with the new Independent Craft Brewer Seal. ShipCompliant

Amazon Isn’t Developing its Own Wines…Yet | Amazon’s role is to give wineries, like King Estate, “an innovative format to launch new brands and reach more customers,” they said. TechCrunch

The Companies Want to Help You Discover (and Afford) Craft Wine | Boutique wineries across the country are producing small batches of everything from pinot noir to chardonnay, but it can be difficult for us twenty-somethings to find – let alone afford – those wines . . . Online platforms like Winestyr and Glassful are trying to change that. CNN

 

JustFun

 

‘The Sideways Effect’: How A Wine-Obsessed Film Reshaped The Industry | A dozen years after Sideways, pinot noir has become a mainstay of the California wine industry, and winemakers credit the film with bringing deserved attention to the varietal, calling it “The Sideways Effect.” NPR

Whisky-Fueled Car Makes First Journey | The world’s first car running on a bio-fuel made from whisky residue has had its first successful test drive. BBC

How Ancient Humans Got Drunk | New book recreates the world’s oldest known beers and wines, and argues being tipsy played a key part in developing language, art and religion. Daily Mail

The post BevAlc Roundup | U.S. Distillers Brace For Possible EU Backlash Against Bourbon, Amazon Isn’t Developing Its Own Wine…Yet, and “The Sideways Effect” appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

New Brewer Seal Helps Craft Beer Stand Out From The Crowd

Wed, 07/12/2017 - 07:00

Craft brewers can better distinguish their products from major producers’ with the new Independent Craft Brewer Seal.

A funny scene played out for me last week, as I was buying beer for a 4th of July party: a couple were having trouble deciding what beer to buy. One of them picked up a six-pack only for the other to reject it — it wasn’t a craft beer, as they wanted; it was produced by one of the major beer makers. They moved on to the next cooler and found an acceptable choice. As they walked away, I just silently shook my head and chuckled — that choice too was owned by one of the major beer conglomerates.

I could see why they were confused. The brand was an established craft brewer, but it had been purchased recently and was no longer independently owned. There was nothing on the label to indicate that it wasn’t craft — unless you were engrained in the beer industry, you’d likely never know.

This kind of confusion may soon be a thing of the past. In late June, the Brewer’s Association (BA) announced the release of a brand new Independent Craft Brewer Seal. Qualifying brewers will be able to attach a sticker to their bottles and cans to certify the provenance of their beer. The seal depicts an upside down beer bottle and the words “Independent Craft.”

The seal is currently freely available to all qualifying brewers. To qualify, a brewer must:

  1. have a valid Brewer’s Notice from the Trade & Tax Bureau (TTB)
  2. meet the Brewer Association’s definition of a craft brewer*
  3. sign a licensing agreement with the BA.

Membership with the BA is not a requirement, though the BA has indicated that a nominal fee to use the seal may be applied to non-members in the future.

Notably, the BA has received written confirmation from the TTB that a revised Certificate of Label Approval (COLA) is not required when the only substantive change to a beer label is the addition of the Independent Craft Brewer Seal.

The intent behind this new seal is to provide clarity for consumers as they navigate increasingly complicated beer aisles.  Craft brewers will benefit from using the seal by having their products more easily distinguishable from the large producers.  According to the BA, there are well over 5,000 craft breweries currently in operation, each producing several brands. The confusion only increases when a major producer purchases an established craft brand.

By using the seal, craft brewers can better distinguish their products from major producers’ and benefit from the potential increased sales they’ll receive from craft-friendly customers.

This appears to have happened to those two customers who were unaware that a brand they enjoyed was no now longer deemed an independent craft brewer according to the BA. If they so valued buying from an independent craft brewer, that brewer likely would have benefited from having this seal available.

*According to the BA, a “craft brewer” is “small, independent, and traditional.” Meaning, it produces 6 million barrels or less annually; no more than 25% of the ownership or controlling stake in the business is held by a beverage alcohol industry member who is not itself a craft brewer; and it derives the flavors for its beer from the fermentation of traditional or innovative ingredients (i.e. is not a fermented malt beverage).

 

Want a better understanding of how beer can be sold in specific states? Take a look at our Brewer’s Guide to Compliance!

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Colorado Continues to Update Its Reporting Requirements for DtC Sales

Wed, 07/05/2017 - 12:00

Starting July 1, 2017, every sale made to a Colorado resident must be accompanied by a notice indicating the Colorado resident’s obligation to pay the tax due.

New notice and reporting requirements for Colorado sales and use tax were set to come into effect on July 1, 2017, which could have a big impact on wineries making Direct to Consumer (DtC) sales into the state. This post from last year provides some background on the issue.

To briefly summarize, Colorado passed a rule in 2010 requiring any business making retail sales into the state who were not also collecting and remitting sales tax to instead issue

  1. a notice to their customers indicating the customer may owe use tax on the order
  2. an annual reminder notice to their customers reminding them of purchases they made, and
  3. an annual report to the Colorado Department of Revenue (DOR) indicating all sales the business made to Colorado residents.

The rule was held up by challenges in court until last year when the 10th Circuit Court ruled it was valid, allowing the DOR to enforce the rule.

An Update on the DtC Exemption

Last year, when we first reported on this rule, there was a big open question about how to approach sales made at the wholesale level. This was a critical question because the rules contain an exception for businesses that make less than $100,000 in annual sales into Colorado.

The DOR is still drafting final rules, which should include a definitive definition of which sales count towards the notice and reporting requirement. However, in a set of emergency rules published on June 30, the DOR has indicated that only final, retail sales made to an end consumer are affected by this rule. Though this is not yet a finalized set of rules, this does signal how the DOR intends to interpret the rule.

For a winery, this means that only its DtC sales will count towards the $100,000 threshold. Any sales made to a Colorado distributor within the three-tier system are entirely outside of the scope of this notice and reporting rule. We have requested that the DOR clearly spells this out in their final rule-making so that DtC wineries can remove all doubt on this issue.

What Does This Mean For Me?

If you made less than $100,000 in DtC sales last year, and reasonably expect to make less than $100,000 in DtC sales in this year (and future years — your expected sales should be reassessed annually), you fall into the exception area, and will not trigger the notice and reporting requirements.

If you are making over $100,000 in DtC sales in Colorado, the next consideration will be to weigh your options. These notices and reports are only required on businesses that are not themselves collecting and remitting sales tax to the state. This is notable for wineries selling DtC, as Colorado is one of the few states that does not make collecting and remitting sales tax a responsibility under your DtC license.

Wineries may want to consider becoming a sales tax collector for Colorado sales[CS1] . The process for collecting and remitting sales tax may be much less onerous than that for issuing all the notices and reports (remember, you will need to send out reports to your Colorado purchasers who bought more than $500 in goods annually). Plus, assuming this responsibility would relieve your Colorado consumers of their burden to pay use tax.

Becoming a sales tax collector will require registering with the state (you can apply for a “Retailer’s Use Tax Account” as an out of state seller), and filing the DR 0173 Retailer Use Tax Return. ShipCompliant clients already have the required Colorado sales and use tax return available in their account.

If you choose not to become a sales tax collector in Colorado, you will need to comply with the notice and report requirements. The DOR has not yet released exact details on what the reports will look like. But the annual report to Colorado purchasers will be due by January 31, 2018 and the annual report to the DOR will be due by March 1, 2018.

Starting July 1, 2017, every sale made to a Colorado resident must be accompanied by a notice indicating the Colorado resident’s obligation to pay the tax due. This notice must be presented to the purchaser at the time of purchase — though the DOR is still considering whether just including the notice with an invoice is allowable.

This notice must contain notice that:

  •       you have not collected sales tax;
  •       the purchase is not exempt merely for being a remote sale;
  •       the purchaser then has the duty to report and pay tax to the DOR;
  •       you will provide them with an annual summary of their purchases;
  •       they should go to the DOR’s website for more information; and
  •       you will be reporting to the DOR on the total dollar amount of their purchases.

More information about this notice can be found on the Colorado Department of Revenue website, including a copy of the emergency rules here.  We will continue to post updates on these and other states’ rules changes on the ShipCompliant blog.

 

All these state requirements bogging you down? Take ShipCompliant for a test drive with a free demo.

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BevAlc Roundup | Pennsylvania to Require Quarterly DTC Reporting, Craft Fights Back Against “Big Beer” With Independent Seal, and UB40 Is Now Selling Wine … Red Red Wine

Mon, 07/03/2017 - 15:00

Today’s roundup covers Pennsylvania’ new DTC reporting requirement, craft beer’s independent seal, and the band UB40 is now selling wine … red red wine. Have a great July 4th holiday!

LegislativeUpdate

Pennsylvania To Require Quarterly Reporting for Winery DtC Starting July 31 | On June 7, 2017 the Pennsylvania Liquor Control Board (PLCB) sent out notices to Direct Wine Shipper licensees informing them of upcoming quarterly reporting requirements. ShipCompliant

FDA Begins Winery Inspections | Wine law specialists have warned since 2011 that the U.S. Food & Drug Administration (FDA) would eventually start inspecting wineries for compliance with the Food Safety Modernization Act. This spring those inspections started in earnest. Wines & Vines

Craft Brewers Fear Last-Minute Regulations in Budget | Wisconsin’s craft brewers and wineries are banding together to head off a plan they fear could force them out of business by prohibiting them from selling their beer and wine where it is made. Milwaukee Journal Sentinel

Texas Wine Industry Debates Labeling Laws | State law in Texas requires just 75% for state appellation labeling, but lawmakers had introduced legislation that would have changed that to 100% effective Sept. 1. Wines & Vines

Like a Lot of Washington, Beer Industry’s Bill on Hold Until Bigger Pieces Are Moved | The beer industry, from the smallest craft brewers to the giant Anheuser-Busch InBev, is behind a long-awaited rewrite of the federal tax code on beer. St. Louis Dispatch

If 3.2 Beer Disappears From Grocery Stores, Utah Liquor Stores Couldn’t Carry Lost Brands | What happens in two years, if the availability of 3.2 percent beer decreases and only higher-alcohol beers are available from big brands like Anheuser-Busch and MillerCoors. The Salt Lake Tribune

IndustryUp

DtC Sales Extend National Reach | Direct-to-consumer (DtC) shipments continue to rise on the back of steady growth in overall U.S. wine sales, with Napa Valley continuing to be a dominant player in the channel. Wines & Vines

Smaller Brewers Relied on RateBeer.com. Now Bud’s Maker Owns a Stake | The constant worry of being crowded out by the big brands, like Anheuser-Busch InBev, the world’s largest brewer, intensified this month when it was revealed that ZX Ventures, an incubator operated by A.B.I., had purchased a minority stake in a popular beer review website, RateBeer.com. The New York Times

Craft Fights Back Against “Big Beer” With Independent Seal | The US Brewer’s Association (BA) has introduced a new seal to indicate craft beers that have been brewerd by independent brewers in response to the number of big beer owners snapping up craft breweries and releasing their own “craft beer” brands. The Drink Business

Poll Findings Show “Independent/Independently Owned” Matters in Craft Beer Purchase Decisions | Does independence matter? You bet it does. A recent survey firmly illustrates this point. Brewers Association

 

JustFun

That “Local” Beer Might Be Made In Another State — or Country | Consumers all over the world are having a hard time knowing where their beer is brewed. Market Watch

Today’s Whiskey Is Not Yesterday’s – Thank Goodness | Whiskey-makers and their public relations companies regularly boast of the ancient heritage of their whiskies. . . . Baloney. American Spectator

The Band UB40 Is Now Selling Wine … Red Red Wine | When reggae band UB40, they of the 70 million records sold, ask if you’d like to taste their Red Red Wine, the answer is obviously/immediately/hilariously yes. LA Weekly

The post BevAlc Roundup | Pennsylvania to Require Quarterly DTC Reporting, Craft Fights Back Against “Big Beer” With Independent Seal, and UB40 Is Now Selling Wine … Red Red Wine appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Direct-to-Consumer Wineries Must Provide More Specifics On Wines Shipped Into Maryland

Wed, 06/28/2017 - 11:31

Wineries that sell direct to consumer (DtC) into Maryland will have a new requirement for new and renewed applications starting July 1, 2017.

As a result of a bill signed by Governor Larry Hogan on May 4, 2017, wineries must now submit a list of every wine they intend to sell DtC. Maryland has updated its application form for new and renewing DtC wine applicants, which now asks for an attached list of wines to be shipped into Maryland. On the form, it asks for each wine to be identified by brand name and type of wine.

This list must be included with every new and renewed license application. Failing to include such a list will result in a rejected application. Licenses must be renewed every year, so if you intend to renew your license after July 1, but fail to include a list of wines you will sell, that could result in a gap in your license. This in turn would make it impermissible to sell wine DtC.

When submitting a new or renewed license application, the list should only include wines that the winery is currently capable of selling, and not those that the winery intends to sell at a later time in the year. Wines that come up for sale later in the year should be submitted to the state liquor board at that time as an amended list.

That is, if you intend to bottle and sell a 2016 vintage later this year, but at the time of submitting your license application only the 2015 vintage is available, you should only list the 2015 vintage. When the 2016 vintage does become available for sale, then you will be required to submit an updated list that includes the 2016 vintage.

 

Not using ShipCompliant yet? Take a test drive with a free demo.

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Pennsylvania To Require Quarterly Reporting for Winery DtC Starting July 31

Tue, 06/27/2017 - 15:27

Wineries shipping direct-to-consumer must now file quarterly reports.

On June 7, 2017 the Pennsylvania Liquor Control Board (PLCB) sent out notices to Direct Wine Shipper licensees informing them of upcoming quarterly reporting requirements. Under their license, Direct Wine Shippers are required to file in the PLCB+ system quarterly reports describing their sales of wine direct to Pennsylvania residents in the previous quarter.

The reports are due on the last day of the month following each quarter. Two separate reports must be filed:

  1. Sales by Product report, detailing total sales of each separate product sold into Pennsylvania in a quarter (note, the PLCB states that each individual label, vintage, and size would be considered a separate product) and
  2. Sales by ZIP code report, detailing total sales of all wine products sold in each individual ZIP code area.

The first due date for these reports is July 31st. This first report, however, is unique, in that the PLCB is requiring Direct Wine Shippers to report all sales from each previous quarter in which they had sales. That is, a winery may have been making sales since September 2016; reports of these sales must be entered by July 31st. Thereafter, only sales from the previous quarter will be required.

Pennsylvania has made it imperative to file all data for the previous year’s sales. Failing to fully comply with the reporting requirement may result in the state rejecting your renewal application.

ShipCompliant customers can now access these quarterly reports in their account.  Stay tuned for more detailed updates about this and other state requirements.

 

All these state requirements bogging you down? Take ShipCompliant for a test drive with a free demo.

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BevAlc Roundup | Massachusetts Sales Tax, Wine Summit Recap, and The Next Big Beer Style

Mon, 06/19/2017 - 16:00

Today’s roundup covers what’s next for Massachusetts sales tax, The ShipCompliant Wine Summit recap, and the next big beer style, according to brewers. Have a great week!

LegislativeUpdate

TTB Newsletter | Top news includes the appointment of Karen Welch as the new director of our International Affairs Division, an overview of TTB’s organizational structure, and a reminder to complete the TTB’s 2017 satisfaction survey. TTB

Alabama ABC Board Approves Increase in Liquor Markup | The Alcoholic Beverage Control Board approved an increase of 5 percentage points in the markup on liquo, a move that will add about a dollar to the price of a $30 bottle. AIL.com

Illinois Court Scores One for Three-Tier System | A judge for the US DIstrict Court of Illinois sided with the state and its wholesalers in dismissing a case that challenged the state’s direct-to-consumer shipping laws. Dram Shop Expert

Leave Cookies? Pay Sales Tax, Says Massachusetts | Massachusetts just devised a fairly brilliant scheme for collecting sales tax from out-of-state sellers. Obsequium

Small Beer Makers Say Bill Creates “Extortion Fee” As They Seek Abbott’s Veto | Craft brewers want Gov. Greg Abbott to veto a bill that would put limits on some regulatory relief that benefits them. Texas Tribute

IndustryUp

Most Consumers Judge a Craft Beer By Its Packaging, Nielsen Finds | The craft beer shelf is getting more crowded with 1,800 new product launches in the category last year, making packaging and labeling one of the primary purchase influencers for craft beer consumers, according to Nielsen. BeverageDaily.com

Wine Summit Re-cap: Direct-to-Consumer State Updates and Industry Trends | Change was in the air last week at the 2017 GCS-Wine Summit (formerly known as DIRECT), and not merely because it was held for the first time in the Sonoma Valley. Among all of the presentations, there was a common thread that the Direct to Consumer (DtC) wine market is maturing and facing new risks — but is also presented with new rewards. ShipCompliant

Slow and Steady Wins the Direct Shipping Map | When it comes to direct-to-consumer (DtC) shipping news, opening Pennsylvania to wine deliveries is a tough act to follow. But a variety of speakers used ShipCompliant’s annual conference, held Thursday at the DoubleTree Sonoma in Rohnert Park, to update wine sales and compliance specialists on the progress of this and other DtC initiatives. Wines & Vines

Why Beer Taxes Are $1.29 in Tennessee but Just 2 Cents in Wyoming | Taxes are the single-largest component of beer’s cost, sometimes reaching up to 40%, according to the Beer Institute, a trade group. Money

DtC Sales Extend National Reach | Direct-to-consumer (DtC) shipments continue to rise on the back of steady growth in overall U.S. wine sales, with Napa Valley continuing to be a dominant player in the channel. Wines & Vines

JustFun

Wine Labels are Tricking You Into Spending More on Wine | A new study from researchers at the University of Adelaide found that vivid, elaborate descriptions make us enjoy cracking into a bottle more than we do when they’re absent. ShortList

Scientists Use Glowing Dyes to Spot Fake Whiskey | This technique can even identify the drink’s origin, blend, age, and taste. Popular Science

We Asked 13 Brewers: What’s the Next Big Style? | When it comes to craft beer, there’s no getting around the fact that IPAs reign supreme. But what’s next? Vinepair

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Wine Summit Re-cap: Direct-to-Consumer State Updates and Industry Trends

Wed, 06/14/2017 - 16:26

Change was in the air last week at the 2017 GCS-Wine Summit (formerly known as DIRECT), and not merely because it was held for the first time in the Sonoma Valley. Among all of the presentations, there was a common thread that the Direct to Consumer (DtC) wine market is maturing and facing new risks — but is also presented with new rewards.

Before I continue with a review of the presentations and key takeaways from the conference, I want to extend a huge thank you from Sovos (and from me personally) to all of the attendees and presenters. It’s always hugely gratifying to see the community engagement that this industry engenders.

Building on 2016’s Success

The day started with a broad, market wide overview from VP of Marketing for Sovos, Eric Olson. Eric remarked on the banner year that the DtC market enjoyed in 2016, but how that continuing success brings with it certain dangers. These dangers aren’t just limited to increased regulatory scrutiny and complaints from market competitors, but also the general stagnation that success can bring.

Eric anchored his speech around Darwin Smith, a former executive of Kimberly-Clark, who transformed the paper company through a vision of strategic dynamism that required rethinking the company’s basic business model. The willingness to shed old ideas and embrace new models is a requirement for industries on the move. This is certainly true of the wine industry. Eric noted that while change may be difficult and require hard decisions, taking advantage of the resources available eases the process, and can lead to even bigger and better opportunities.

Steve Gross’s Annual State of the Wine Industry

Following Eric was the State of the Wine Industry regulatory update by the inimitable Steve Gross of the Wine Institute. There were big changes to report, keystoned by a review from Pennsylvania, a new DtC state in 2016.

At last year’s DIRECT conference, it was late breaking news that Pennsylvania had passed legislation to allow DtC wine sales. By now we’ve seen the state rapidly become a major player in the market — but there was still news, as the state announced upcoming reporting requirements wineries will need to comply with.

Regulators Keeping Their Eye on States

While a new market, Oklahoma, was announced this year, its revelation was tempered by a far-off beginning date (October 2018) and some kinks that need to be worked out. However, the rest of Steve’s presentation was largely focused on the maturation of the market and the changes it will bring.

With a few exceptions, DtC wine has seemingly conquered the American landscape. This raises cries for review and even retrenchment. Regulators are looking at the market, and want to better ensure that it is compliant; certain businesses, responding to the wine industry’s DtC success, seek new restrictions.

Steve noted that we see this in states creating new reporting requirements, like South Dakota needing tracking numbers; in states imposing restrictions on third party providers, like in Illinois; and in a number of states that are looking to burden common carriers with new reports and threats of fines and felony charges for improper shipments.

The restrictions on third parties was especially prevalent, as there appears to be a growing concern among states regarding non-licensed entities participating in the DtC market. The fight is on to ensure that both bad actors get threshed out, while the restrictions imposed don’t improperly hamper the good actors as well.

It was not all doom and gloom either. Arizona removing its production cap on DtC wineries was clearly a positive move. And Michigan earlier this year relaxed some particularly onerous package labeling rules. Delaware made positive moves to allow DtC wine sales, an effort that will continue in 2018. Even Mississippi and Alabama’s DtC bills received some positive attention (though they both failed to get far past committees in the states’ respective legislatures).

Through his presentation, Steve’s message was that change is inevitable but not inhibiting. There are opportunities to grow as the market flexes, and services like the Wine Institute to guide wineries through the dynamic regulatory scene. Even as slightly strange requirements come into effect, such as Colorado’s rule regarding sales tax reporting (we will also provide an update on this rule soon), change mostly reflects that DtC wine is coming into its own. After all, the opposite of change is stagnation — and what we like to see is an active market.

 

Learn more about direct-to-consumer trends. Download the 2016 DtC Report.

The post Wine Summit Re-cap: Direct-to-Consumer State Updates and Industry Trends appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

Top Questions (and Answers) From “Getting Real About DTC Shipping: Issues Wineries Need to Consider” Webinar

Tue, 06/06/2017 - 16:00

Alex Heckathorn and Dyana Nedra from Compliance Services of America (CSA) joined me for our recent webinar, “Getting Real About DTC Shipping.”  We discussed some of the issues wineries should consider before they launch in the Direct-to-Consumer market, including changing state regulations and the licensing process. We received some great questions from the audience and have put together some answers here. If you missed the webinar, you can watch it on-demand here

Q:  We’ve had recent trouble with orders shipped from our warehouse being flagged as non-compliant by states. How can I prevent this and ensure that my orders are compliant when they’re being fulfilled from a location that’s not indicated on my license?

A: There are a number of reasons the states will flag a shipment as being non-compliant, but based on your question we assume it was because the shipping address did not match the address on your license. Some states, like Virginia, Wisconsin and North Dakota require that the fulfillment warehouses be licensed as well as the winery, so this could be your problem if your fulfillment service is not licensed.

Other states, like South Dakota, audit common carriers’ incoming shipments of wine and try to match the names of the senders to their list of licensees. When the sender is an unlicensed warehouse, they can’t confirm the shipment is covered by the proper license. They have recently instituted a system using tracking numbers on winery shipping reports to allow them to match up licensees with shipments coming from unlicensed fulfillment houses. We suggest reaching out to the states that are flagging your shipments to see why they are non-compliant.

Q:  What options are there for importers and other non-wine producers to get engage in the DTC market? As an importer or other non-producer, can I work with wineries to market and sell wine DtC?

A: For importers, there are limited options to engage in DTC shipping. Normally, the state license held by an importer does not include the privilege of selling directly to consumers. However, a few states — California, Massachusetts and District of Columbia — allow importers to also hold a retail license, allowing sales to consumers within importers’ home states. Fourteen states allow out-of-state retailers to sell and ship direct to consumers. This privilege would include imported wine sold by the retailer.

There are a few states that allow importers to receive a DTC license, regardless of their home state retail privileges. However, these are limited to only a few, relatively small states, such as West Virginia, New Hampshire and Wyoming. But we would remind importers they are not normally allowed to make retail sales or ship DTC.

Working with a winery that holds DTC permits to sell your imported wines would not be compliant. This is because most states permit only wines produced by the licensed winery to be sold.

Some states specifically prohibit imported wines to be sold DTC by the winery, even if the winery owns the brand and imported the wine itself. If a winery holds a retail license, they could work with you to sell your imports in the fourteen states that allow retailer shipping, but attempting to reach the other states that issue winery-only permits is problematic.

Q: What rules are there regarding for non-sale direct shipments of wine? For example, if a winery wants to send gift packages for Christmas, does it need a license or need to comply with other standard DTC rules like tax payments and reporting?

A: Unfortunately, there aren’t any specific rules allowing this, so there is no clear-cut answer and no easy solution. For years, wineries shipped wines as gifts, trade samples, samples to wine reviewers, and for lab analysis. There was no sale involved and the states simply ignored these shipments.

With the maturing of the DTC market and the collection of taxes on DTC shipments, the states are now monitoring all alcohol shipments and getting information from the carriers to ensure reporting and tax payment. Non-sale shipments are being caught in these audits, and when they come from unlicensed wineries, the carriers could be implicated for accepting illegal shipments. Understandably, the carriers are now balking at carrying these types of shipments.

If the winery already has DTC licenses, it can ship non-sale wines under its permit and report them as complimentary shipments. The states may still want to collect excise taxes on such shipments but the winery should be free of sales taxes since no sale was made. If the winery does not have licenses, it is increasingly difficult — because the carriers are being audited — to convince the carriers these types of shipments do not require a DTC license because they are not “sales” to consumers.

Q: When there’s a change in the ownership structure of a winery, does that winery need all new DTC licenses, or can it continue to sell under the existing licenses? What if there’s a merger or acquisition of the winery?

A: The answer depends on the nature and size of the changes. If the same company or entity that holds the TTB Permit and license remains in control after the changes, in many cases the DTC permits will remain in good standing and the winery can continue to ship under its existing DTC licenses — although some states require the changes in ownership to be reported.

If the change in ownership is actually a sale of winery’s assets to a new company and the new owner must get a new TTB Permit and state license, the new entity owning the winery must obtain new DTC permits. In such cases the seller and buyer often work out an interim services agreement to allow for continued shipping under the existing permits. This is an area where good legal and compliance advice is necessary. Mergers and conversions of entities require an analysis of the specific situation to determine what is possible.

Q: Can a consumer purchase wine at a winery and personally ship it home to herself? Or would she need to have the winery ship it to her, under their DTC license?

A: This type of sale is called an “on-site sale” and rules are slightly different. Generally, either the consumer can ship the wine or have the winery ship it to them. There are volume limits on the amount of wine that can be shipped when it is purchased onsite at the winery. For more specific information see the Wine Institute’s State Shipping Laws for Wineries Portal and under each state you will find the “On-site Rules.”

While most states do allow for personal imports of beverage alcohol carried across state borders, it’s not clear how legal this practice is since most states’ laws don’t explicitly allow the use of common carriers.

As common carriers face increased scrutiny from states, they are less and less willing to accept such shipments. We’ve heard anecdotes of shipping stores in California being required by UPS to provide the license number associated with any package said to contain wine.

Whenever a consumer brings in wine to ship home, they can’t provide a license number, meaning the shipping store has to reject that package. So the best advice would be to have the winery ship any wine purchased on-site for the consumer.

 

Learn more about DtC licensing, watch our webinar on demand

The post Top Questions (and Answers) From “Getting Real About DTC Shipping: Issues Wineries Need to Consider” Webinar appeared first on ShipCompliant | The software leader of the beverage alcohol industry.

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