abl

May 2018



Save-the-Date: 2019 ABL Annual Meeting
May 23, 2018 – American Beverage Licensees (ABL) announced today that it is returning to Las Vegas, Nevada for the 2019 ABL Annual Meeting, taking place March 24-26, 2019. The meeting will be held at Bally’s Las Vegas Hotel & Casino, and will include a program full of informative speakers, topical issue discussions, industry networking and a series of hospitality events.

 

Marking the association’s 17th anniversary, the 2019 ABL Annual Meeting will bring together beer, wine and spirits retailers from across the country – as well as representatives from the three tiers of the beverage alcohol industry. The meeting program will examine the key issues of the day facing independent beverage retailers and explore what lies ahead in the ever-evolving beverage alcohol marketplace.

 

“We're excited to bring the ABL meeting back to Las Vegas” said ABL Executive Director John Bodnovich. "It is a great hospitality industry backdrop for discussing and learning more about the important issues that face America’s bars, taverns and package stores.”

 

Additional information – including registration and room rates, speakers, schedules, and hospitality events – will be announced in the coming weeks and months. For the latest updates and information on the 2019 ABL Annual Meeting, be sure to visit the ABL website (www.ablusa.org). The latest updates can also be found by following the #ABLMeeting19 hashtag on Facebook, Instagram and Twitter.

 

May Is National Tavern Month
April 25, 2018 – American Beverage Licensees (ABL) is proud to recognize May as National Tavern Month (Tavern Month). Since 1953, Tavern Month has served as an opportunity to support local hospitality businesses; promote the responsible service and enjoyment of beer, wine and spirits; and educate the public about the history, traditions and economic impact of the hundreds-of-thousands of on-premise beverage licensees throughout the United States. Read more…

 

Beverage Licensees Support Communities with Over $43 Billion in Taxes Annually
April 17, 2018 – As Americans face today’s “Tax Day” deadline to file their tax returns, American Beverage Licensees (ABL), the national trade association for retail beverage alcohol license holders across the United States, is highlighting the economic impact of America’s beer, wine and spirits retailers and the more than $43 billion they pay in federal, state and local taxes. Read more…

 

Statement from American Beverage Licensees on Passage of the Music Modernization Act by the House Judiciary Committee
April 12, 2018 – The passage of the Music Modernization Act (MMA) (H.R. 5447) by the House Judiciary Committee on April 11 sets a meaningful bipartisan precedent and is a step in the right direction when it comes to addressing flaws in the music licensing system. However, hundreds of thousands of bar, tavern and restaurant owners are correct to point out that the MMA does not address their fundamental need for transparent and reliable information in the music licensing process. Read more…

 

 

NEWS

 

SITUATIONAL AWARENESS
As of May 14, there are just 14 legislative weeks until the end of the fiscal year (September 30.)

 

MUSIC LICENSING
Legislation that addresses some – but not all – issues regarding music licensing is making its way through Congress. The Music Modernization Act (MMA) (H.R. 5447; S. 2334), introduced by House Judiciary Committee Chairman Bob Goodlatte (R-VA), passed the House 415-0 on April 25 after being voted out of the House Judiciary Committee with unanimous support on April 11. The Senate version was introduced by Sen. Orrin Hatch (R-UT) on May 10 and received a hearing from the Senate Judiciary Committee (SJC) on May 15. A markup by the SJC is expected.

 

Both bills are compilations of three music licensing bills that have garnered consensus support from music industry groups, as well as the support of streaming music services (Spotify, Apple, Pandora, etc.) The main thrust of the legislation is an overhaul of the system for mechanical music rights royalties through the creation of a blanket licensing system for online streaming services and a single collective (database) for distribution of funds to individual rights holders. The legislation also benefits artists who recorded music before 1972 and changes how sound engineers are compensated. The rest of the content delivery industry (venues, broadcasters, etc.) have not taken a position on the legislation, nor has the MIC Coalition.

 

On the regulatory front, Makan Delrahim, the Assistant Attorney General of the Department of Justice (DOJ), has stated his intent to terminate the consent decrees signed by ASCAP and BMI. Delrahim, in recent public appearances, has stated that the DOJ is reviewing the 1,300 antitrust consent decrees currently on the books, and that the ASCAP and BMI judgments may no longer serve their purpose of ensuring a competitive market. These PROs – the two largest in the U.S. – entered into their consent decree agreements in 1941 to correct anticompetitive behavior. The DOJ requires that all music venues and radio stations can each equally secure music licenses at competitive rates from ASCAP and BMI.

 

The consent decree termination process remains somewhat of a bureaucratic and legal enigma since an unwinding of this nature has not been undertaken in recent memory. It is expected to include a 30-day comment period, however push back on ASCAP and BMI consent decree termination is starting to emanate as the music marketplace chaos that termination would unleash becomes more apparent. At the Senate Judiciary Committee hearing for the Music Modernization Act on May 15, Sen. Richard Blumenthal (D-CT) said, “My message is to keep these consent decrees in place. These consent decrees are central to the structure we have now, and I have serious concerns with the DOJ taking that action particularly if it doesn’t work with Congress to make sure we have a framework in place first.”

 

In 2016, the DOJ completed a two-year review of the ASCAP and BMI consent decrees concluding that the agreement should stay in place. As Sen. Blumenthal correctly pointed out in the hearing, “The facts have not changed since then.”

 

SPORTS GAMING
On May 14, the Supreme Court struck down a federal law that prohibits gaming on individual sporting events in all states throughout the country. The ruling is a landmark shift for the gaming industry and major sports leagues. The lawsuit was brought by the state of New Jersey, with support from 18 other states, and challenged the 1992 law – the Professional and Amateur Sports Protection Act (PASPA) – which forced states to outlaw sports gaming. Americans place $150 billion a year in illegal sports bets, according to the American Gaming Association.

 

The rush is now on to implement sports gaming in casinos and racetracks in New Jersey and other states that already permit other forms of gaming. A handful of states have passed or have active legislation that would allow for sports gaming but were waiting for the Supreme Court decision before they could move forward. Unlike cannabis legalization, there are no sports book banking obstacles and it does not appear that there are enough votes in Congress to pass legislation to push back on the Supreme Court decision, though anti-sports gaming bills may well be introduced.

 

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MENU LABELING
On May 7, the long-delayed Food and Drug Administration (FDA) final rule on menu labeling went into effect. Under the rule, which stems for a provision in the Affordable Care Act, restaurants and similar retail food establishments that are part of a chain with 20 or more locations (doing business under the same name and offering for sale substantially the same menu items) must provide consumers with the number of calories contained in standard items on menus and menu boards.

 

For self-service foods and foods on display, calories must be listed in close proximity and clearly associated with the standard menu item. Businesses must also provide, upon request, the following written nutrition information for standard menu items: total calories; total fat; saturated fat; trans-fat; cholesterol; sodium; total carbohydrates; sugars; fiber; and protein.

 

While the menu-labeling requirements alleviate some problems for chain restaurants operating in multiple states and facing a potential patchwork of menu labeling laws, they have received pushback from segments of the food and beverage industry including pizzerias and craft brewers. Some of those opposed to the regulations were hopeful that the Trump Administration would move to stop the requirements as part of its deregulatory push, but that has not been the case. More information on the rule can be found here.

 

ESTATE TAX
The Family Business Coalition circulated a letter on April 25 backing the Death Tax Repeal Act of 2018 (H.R. 5422), a bill from Rep. Jason Smith (R-MO) to get rid of the estate tax, arguing that "permanent repeal" is "the only solution for family businesses and farms. Rep. Smith is assuming the mantle of House death tax champion upon Rep. Kristi Noem (R-SD) retiring from Congress. One challenge now developing for repeal supporters: Republican backers of repeal believe that last year's tax law, which doubled the estate tax's exemption, blunted some of the momentum for getting rid of the levy entirely.

 

ONLINE SALES TAX
On April 17, the Supreme Court heard oral arguments on South Dakota v. Wayfair, straining to determine whether states should be able to compel online retailers to collect sales taxes in states where they do not have a physical presence. The issue is important to states that are losing out on billions of dollars in tax revenue, and brick-and-mortar retailers who are put at a competitive disadvantage by online retailers who can build non-payment of sales taxes into their prices.

 

The case hinges on a 1992 Supreme Court decision, Quill Corporation v. North Dakota, which said that the Constitution prohibits states from collecting sales taxes from businesses that are not substantially connected to the state. In the balance and of concern to the Supreme Court justices are increasing burdens on small businesses, liability for back taxes and other unforeseen consequences to the online marketplace. The case captures elements of multiple modern U.S. legal conundrums including the scope of the Commerce Clause and the impact of technology on business and law.

 

ADA REFORM
Despite the successful passage of the ADA Education and Reform Act (H.R. 620) in the House in February, momentum for tweaking the American with Disabilities Act (ADA) has stalled in the Senate. Sen. Tammy Duckworth (D-IL), herself a disabled veteran, was joined by 42 other Democratic Senators on a letter to Senate Majority Leader Mitch McConnell (R-KY) in which they pledged to block a Senate vote on the ADA Education and Reform Act. With 43 Senators opposing the bill, there is enough opposition to filibuster the legislation, dimming its chances of reaching the Senate floor.

 

CBMTRA
On March 2, 2018, the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued guidelines for implementation of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) portion of the tax reform bill. Though it has been broadly reported that all wineries would benefit from reduced federal excise tax rates, TTB guidelines state: Wineries which totally control production and sales from start to finish will get the full benefit (an effective rate of 7 cents per gallon on the first 30,000 gallons produced, for example), while those using custom crush or remote bonded wine cellars will have to pay the full excise tax rate ($1.07 per gallon) on the wines subject to those scenarios.

 

Wine industry advocates point out that the TTB’s interpretation would be a “particularly devastating scenario for many small and medium-sized wineries which have long benefited from the Small Producer Tax Credit (enacted in 1991) that lowered their rate from $1.07 to 17 cents per gallon.” Though the presumed tax credits took effect on January 1, 2018, some temporarily permitted wineries now face a June 30, 2018 deadline when they will fall under the new tax regime.

 

Alcohol industry suppliers have also launched their lobbying efforts to extend the new alcohol excise tax reductions beyond the current expiration date of December 31, 2019.

 

IN BRIEF

 

Swipe Fees…The American Bankers Association will run television ads in support of the reelection campaigns of Sen. Jon Tester (D-MT) and Rep. Ted Budd (R-NC), both of whom have been key players in the banking industry’s efforts to deregulate the banking industry and, in Budd’s case, to repeal debit card swipe fee reforms often referred to as the Durbin Amendment.

 

Marijuana…Senate Minority Leader Chuck Schumer (D-NY) announced on April 20 that he would be introducing a bill to decriminalize marijuana at the federal level. Under his plan, marijuana would be removed from the federal list of controlled substances, which would effectively reduce punishments related to the drug, but would keep in place federal authority to prevent illegal interstate movement of marijuana………A new Small Business Administration (SBA) policy states that it will not approve loans to businesses that derive any portion of their revenue from sales to marijuana clients because the drug is illegal under federal law. Nine states and the District of Columbia allow marijuana to be sold recreationally, with another 21 allowing it to be sold for medical use.

 

NIH Alcohol Study…On April 11, National Institutes of Health (NIH) Director Francis Collins testified before House lawmakers that he is investigating the process by which agency researchers solicited funding from the alcohol industry for a study on the health effects of drinking. Though industries supporting NIH research is not uncommon, the questions follow a New York Times report in March that states that several large alcohol companies contributed millions of dollars to the study through a foundation that supports the NIH. The scope of the NIH study is to determine whether adults who are 50 years and older who have one drink a day have different health outcomes than those who abstain.

 

FY 2019…House appropriators are working on President Donald Trump's fiscal 2019 budget request and FY 2019 appropriations. Current government funding expires at the end of the fiscal year, September 30.

 

Menthol Cigarettes…Food and Drug Administration (FDA) commissioner Scott Gottlieb has announced that he is launching a regulatory process that could lead to a menthol cigarette ban. This would strengthen 2010 legislation banning flavored cigarettes except for those flavored with menthol. It comes as the FDA has signaled that it may curtail Obama-era FDA efforts to regulate electronic cigarettes.

 

Spirits Industry Fly-In…The American Craft Spirits Association and the Distilled Spirits Council held a Public Policy Conference on May 14-16, 2018, in Washington, D.C, where their members met with lawmakers and advocated that Congress extend the Craft Beverage Modernization and Tax Reform Act. Congress passed a two-year federal excise tax (FET) reduction on distilled spirits last year as part of the Tax Cuts & Jobs Act.

 

CDC…According to a new report from the Centers for Disease Control and Prevention (CDC), about 37 million – or 1 in 6 – U.S. adults binge drink about once a week, consuming an average of seven drinks per binge. The National Institute on Alcohol Abuse and Alcoholism defines binge drinking as men consuming 5 or more drinks or women consuming 4 or more drinks in about 2 hours. According to the CDC, most people who binge drink are not alcohol dependent.

 

Trade Tariffs…A group of more than 100 trade associations has sent a letter to the chairman and ranking members of the House Ways and Means Committee warning that ““the impact of a trade war and tariffs would be felt by businesses, workers, farmers, consumers throughout the U.S. and across industry sectors.” The signees are urging the Trump Administration to abandon plans to level as much as $150 billion in tariffs on imports from China, and instead pursue multilateral negotiations to oppose problematic Chinese trade practices. Industry groups that signed the letter include the Distilled Spirits Council, Kentucky Distillers Association and WineAmerica

 

Association Health Plans…The National Restaurant Association (NRA) has launched an association health plan (AHP) designed for restaurants and hospitality businesses with fewer than 100 employees. The launch comes as small businesses try to navigate the healthcare landscape and gain access to plans. The plan will be serviced by UnitedHealthcare and comes as the U.S. Department of Labor (DOL) has crafted a proposal to expand AHPs following a Presidential executive order in October 2017 directed agencies to develop regulations that would allow membership organizations to sponsor health plans across state lines. The DOL proposal has received criticism because it would allow health plans that do not fully comply with the Affordable Care Act, though the NRA points out that its AHP complies with the Affordable Care Act.


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