Wednesday, April 28, 2021 www.nabca.org

• Control State Results for March 2021 • FL: With Florida law, almost all states require online sales tax collection • Australia: Facebook allows advertisers to target children interested in smoking, alcohol and weight TODAY’S loss HIGHLIGHTS • Parents more lenient about alcohol with teens who experience puberty early • Coca-Cola bolsters DTC offering with spirits bundles • NBWA Increases Distributors Against Human Trafficking Initiative Training Goal to 25,000 Employees

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NABCA's 84th ANNUAL CONFERENCE Registration is now open for the 84th Annual ADDITIONAL LINKS Conference which is virtual this year. Visit NABCA’s website for information on: The conference will be held May 17-19, 2021. This • year’s theme is SHARING SOLUTIONS. Control State Agency Information • Doing Business in Control States Click here for more details. • NABCA News For questions, contact the Meetings Department at [email protected]. NABCA CONTROL STATE RESULTS Beverage Alcohol Retailers Conference Control State Results for March 2021 June 7-9, 2021 Control State Results UT Austin ATT Conference Center, Texas Source: NABCA Click here for more details. March 5, 2021 During March nine-liter control states spirits case sales NABCA NEWS grew 2.9% over same period sales last year despite a Visit NABCA’s COVID-19 Resource page for updates (monster) 17% comp. Michigan(25.5%), regarding policy changes that effect on- and off- Montana(16.8%), and Pennsylvania(11.2%) reported premise retail operations. monthly growth rates for March exceeding their twelve- month trends. The growth rates for Alabama(6.2%), The Collection: An Alcohol Research Summary Iowa(9.8%), Idaho(-5.9%), Montgomery County (formerly Annotated Bibliography) A comprehensive overview of the latest scientific evidence on Maryland(-21.4%), Maine(7.9%), Mississippi(16.9%), important topics related to alcohol policy. North Carolina(-3.0%), New Hampshire(-31.7%), Ohio(0.2%), Oregon(-8.8%), Utah(-8.2%), Virginia(-5.3%), Sharing Solutions E-Newsletter! A platform for the Vermont(-6.0%), West Virginia(-7.9%), and NABCA community to share successful plementations Wyoming(4.5%) fell short of their twelve-month trends. and lessons learned about your good work. Control state rolling-twelve-month-volume growth, 6.6%, slipped from February’s reported 7.7%. Spirits volumes are growing 4.2% year-to-date compared to 8.7% a year ago. 2

Control state spirits shelf dollars were up 12.0% Utah—are closed Sundays. This year’s March had during March while trending at 13.5% during the four Sundays compared to five last year. past twelve months. Iowa(17.1%), Maine(16.3%), • Six control states are wholesale only, i.e., they have Michigan(36.2%), Mississippi(28.7%), no state stores or agencies and the stores in their Montana(25.6%), Pennsylvania(19.5%), and jurisdictions are independently owned, and report Wyoming(12.8%) reported growth rates exceeding calendar month sales. Michigan is wholesale only but their twelve-month trends. Alabama(13.3%), reports four- or five-week fiscal period sales. These Idaho(3.0%), Montgomery County Maryland(- six states ship to licensees Monday through Friday. 15.0%), North Carolina(7.2%), New Hampshire(- NABCA reports shipments from the warehouses as 31.2%), Ohio(12.9%), Oregon(-1.2%), Utah(0.1%), sales for all wholesale only control states. This Virginia(5.0%), Vermont(1.3%), and West Virginia(- March’s calendar had twenty-three weekdays 1.3%) grew shelf dollars at rates below their twelve- compared to twenty-two last year, 4.5% more. The month trends. Shelf dollars in the control states are six wholesale only control states reporting calendar up 11.9% year-to-date compared to 10.8% last year. month sales are Iowa, Maine, Mississippi, Montana, Price/Mix for March is 9.1%, up from February’s West Virginia, and Wyoming. reported 6.8%. • On net, there were eleven more selling days during Premiumization continues to drive Price/Mix in the March in the control states, 2% more, compared to control states. Note YTD nine-liter case growth and last year. YTD shelf dollar growth rates compared against last • After equivalizing selling-day variations between this year’s. March’s 9.1% reported Price/Mix is the and last year’s March, the nine-liter-case-spirits second highest value ever reported. During March growth rate is -5.8% with a rolling-twelve-month 2021, the median price of 750 ML spirits volumes trend of 6.8%. March’s shelf-dollar growth rate is sold in those control states that set the retail price 2.4% with a rolling-twelve-month trend of 13.6%. point was $24.98 (the second highest value recorded in the control states) and the weighted average price • Equivalized price/mix for March is 8.2%. of 750 ML volumes was $17.85 (also the second Cocktails, with 3% share of the nine-liter case control highest value recorded). During last year’s March, states spirits market, was March’s fastest growing these prices were $23.99 and $16.34, respectively. category with 41.9% reported and a twelve-month trend During the period March 2020 through February of of 44.0%. Tequila, with 8% share, grew during March at 2021, the control states’ on- and off-premise 40.5% and 23.9% during the past twelve months. markets behaved capriciously. However, during Cordials, with 7% share, grew at 24.7% during March and March the on-premise share of the control state 6.5% during the past twelve months. Vodka, with 32% market climbed to a value that is less than 4% below share, grew during the same periods at -5.5% and 0.6%, its historical March share, suggesting the on-premise respectively. Cordials(24.7% during March, 6.5% during marketplace recovery in the control states is past twelve months), Irish Whiskey(10.9%, 5.5%), and strengthening, as would be expected, as COVID Tequila(40.5%, 23.9%) grew at rates above their twelve- restrictions are lifted. month trends, while Brandy/Cognac(7.6%, 15.9%), Canadian Whiskey(1.8%, 6.8%), Cocktails(41.9%, 44.0%), March’s control states growth rate was effected by Domestic Whiskey(-0.4%, 9.6%), Gin(-5.8%, -0.1%), Rum(- calendar anomalies and continues to be influenced 2.2%, 1.5%), Scotch(-8.6%, 0.5%), and Vodka(-5.5%, 0.6%) by pandemic related phenomena. grew at rates below their twelve-month trends. • Michigan, with 16% of control state nine-liter- March’s nine-liter wine case sales growth rate was - case spirits volume, reported sales for 35 days 14.5%. Pennsylvania (reporting -17.4% nine-liter-case this March compared to 28 days last year, growth for wines), New Hampshire (-12.9%), Mississippi artificially inflating sales and skewing control (-1.7%), Utah (-14.4%), Montgomery County Maryland (- state results. Michigan had seven more selling 13.3%), and Wyoming (-13.4%) are the control states that days during this year’s March. are the sole wholesalers of wines and spirits within their • Retail outlets selling spirits in five states— geographical boundaries. Rolling-twelve-month wine Alabama, Mississippi, Montana, North Carolina, 3 volume growth in these six control states is 0.1%, down from February’s reported 3.0%.

9L Shelf Cases $ CM Price/ Control

CM % % Mix States Chg Chg

Total Control 2.9 12.0 9.1% States

Central IA, MD, MI, 11.1 21.4 10.3% Region OH, PA, WV

NE -18.7 -16.2 2.5% ME, NH, VT Region

NW ID, MT, OR, -4.4 3.3 7.7% Region UT, WY

Southern AL, MS, NC, 0.4 9.6 9.2% Region VA

LICENSE STATE NEWS FL: With Florida law, almost all states require online sales tax collection Accounting Today By Roger Russell April 27, 2021 Florida, one of the last two holdout states to enact economic nexus legislation in the wake of the Supreme Court’s Wayfair decision on taxing online sales, has finally passed a bill that applies sales tax collection requirements to remote sellers and marketplace facilitators. Under the bill, remote sellers and marketplace facilitators will be required to collect Florida sales taxes on sales to purchasers in Florida if the seller or facilitator makes a substantial number of sales into the state. “Substantial” is defined as conducting any number of taxable remote sales into Florida exceeding $100,000 during the previous calendar year. The bill goes into effect on July 1, 2021. Governor Ron DeSantis, who was against similar legislation when he was a member of Congress, signed 4 the bill April 19. Missouri is now the only state that retailers from those states have not been picking up imposes a sales tax that hasn’t enacted such Florida’s tax.” legislation. The new law revises the definition of “retail sale” to “The issue was always that they didn’t want any include sales facilitated through a marketplace. more new taxes,” said Scott Peterson, vice president “Every other state making remote sellers collect has of U.S. tax policy and government relations at included requiring marketplace providers to collect,” Avalara. “That’s a perfectly valid position to take. If Peterson noted. “There’s been a long legal debate over a you’re a ‘no-tax’ legislator, the last thing you want is state’s right to make a marketplace collect sales tax when another tax. They never before had a need for the the marketplace says, ‘We’re not the seller, someone else additional money because they could always is.’ But Florida ignored the distinction, and that’s typical balance their budget. But things have changed.” of every other state that has done the same thing.” The pandemic created massive unemployment in The direct-to-consumer alcohol industry may be typical of many states, depleting their unemployment many remote sellers and marketplaces, according to Jeff insurance funds. “When the fund falls below a Carroll, general manager for beverage alcohol at Avalara. specified level, it triggers an automatic increase on This was one industry in particular that was hoping employers in the state,” Peterson added. Florida would remain a holdout in enactment of Every state has its own unemployment fund, plus economic nexus. access to a federal fund that loans the states money “This new legislation has DTC alcohol sellers, and in to pay the insurance, which the states then have to particular wine producers, on guard,” said Carroll. repay. “Employers end up having to pay higher taxes “Wineries, producers and marketplaces wanted Florida to pay back the federal government,” Peterson to maintain the status quo, and the situation can be explained. described as divided, at best. Economic nexus is adding “The pandemic, with its effect on collection and layers of complexity onto one of the most highly spending in Florida seems to have changed Governor regulated industries in the U.S., and sellers are scrambling DeSantis’ mind,” said Peterson. “Before, the thought to understand and comply with new regulations.” was, ‘This will bring in money and we don’t know The Florida law on beverages may have a spillover effect, what to do with the additional money.’ Well, the so to speak, on other states. “Although the complexities pandemic solved that. One of the things about the for beverage alcohol sellers exist in the country as a unemployment insurance fund is that there’s always whole, the economic nexus news is important in Florida money coming in and money going out.” because it’s a big destination state for wine shipments,” The increases are automatic, Peterson noted. he added. “And wineries have not previously needed to “When the fund falls below a specified level, it register in Florida, but will now need to get with the triggers an automatic increase on employers. The economic nexus compliance program.” federal government has a loan program, to loan states money to pay the insurance, but they have to pay it back — employers in the state end up paying HI: Department of Liquor Control Office to move to new higher taxes to pay back the federal government.” Maui County Service Center Florida’s fund is currently at zero, so the state will Maui Now use the money from collecting tax on internet sales April 27, 2021 to pay back the federal government, and that will The County of Maui Department of Liquor Control stop the automatic increase in unemployment Wailuku Office will be moving from 2145 Kaohu Street, insurance taxes for local employers. Room 105, Wailuku, to the new Maui County Service Florida retailers have been pushing the government Center located at 110 ‘Ala‘ihi St., Room 212, Kahului, on to level the playing field, according to Peterson. “Up May 13 and 14, 2021. to now, Florida retailers have been collecting the The Department of Liquor Control Wailuku office will still sales taxes of other states, and yet Florida did not be accepting license renewal applications during the impose the same burden on everyone else, but move on May 13 and 14, 2021. All other services will not 5 be available at that time. All services are anticipated people under 18, it does not prevent advertisers from to be available on Monday, May 17, 2021, when targeting children determined by Facebook’s profile to offices and all department services will be located on have an interest in alcohol, for advertising that might not the second floor of the Maui County Service Center. appear explicitly to be about those topics. The department’s US Postal Service mailing address Facebook offered the page the ability to advertise to will be 110 ‘Ala‘ihi St., Room 212, Kahului 96732. approximately 740,000 Australian children aged between 13 and 17, but then when the group refined the All of the office phone numbers will remain the advertising by interest, found that, just as for those aged same: over 18, they were able to advertise to teens under 18 • Department of Liquor Control Office: (808) 243- with interests in alcohol, smoking and vaping, gambling, 7753 extreme weight loss, fast foods and online dating • Enforcement Division: (808) 243-7101 services. • Licensing & Permits Division: (808) 243-7063 To advertise to 52,000 teenagers interested in alcohol would cost $3.03, while getting to 14,000 teens Office hours will change from 7:45 a.m. to 4:30 p.m. interested in gambling would cost $11.24, or to fewer Monday through Friday, to 8 a.m. to 4 p.m. Monday than 1,000 teens interested in cigarettes or electronic through Friday. cigarettes would cost between $138.50 and $210.97. In accordance with the Rules of the Liquor The organisation then tested it out by getting a number Commission, the Department of Liquor Control of ads mentioning winning prizes, or cocktails, or asking office is required to be opened until 4:30 p.m. on teens if they were “summer ready” approved for certain days. These are on June 30, 2021, for advertising to those targeted demographics. The ads applications of liquor license renewals, and on Aug. were ultimately never sent out. 2, 2021, for the filing of reports gross liquor sales and other records. Reset Australia has called on the federal government to develop a code regulating how data about young people can be collected and used, saying there should be express INTERNATIONAL NEWS consent from children and parents, and full transparency Australia: Facebook allows advertisers to target over how the data is used, with only necessary data children interested in smoking, alcohol and weight collected. loss “Facebook appears to use teenagers’ data in the same Social media giant gave organisation behind a page for way as adults,” said Chris Cooper, executive director of Australian 13- to 17-year-olds option to run alcohol, Reset Australia. “This opens a can of worms about just smoking and gambling ads for as little as $3 how Facebook profits from underage data, and exactly The Guardian what protection they have against inappropriate By Josh Taylor targeting.” April 27, 2021 “Should a 13-year-old who lists their single status be Facebook is allowing businesses to advertise to getting targeted ads for a sugar daddy dating service? children as young as 13 who express an interest in Should a 15-year-old profiled as interested in alcohol see smoking, extreme weight loss and gambling for as ads that suggest cocktail recipes based on their parent’s little as $3, research by the lobby group Reset alcohol cabinet? Do we want 16-year-olds to have ads Australia has found. about gambling or political extremism targeted at them?” The organisation, which is critical of digital Facebook reviews every ad before it goes live but a platforms, set up a Facebook page and advertising spokesperson said in a statement ads could also be account under the name “Ozzie news network” to reviewed after they run, and would need to be compliant see what ad options Facebook would provide with local laws. through its Ads Manager platform. “Keeping young people safe across Facebook and While Facebook will not allow the advertising of Instagram is vital,” the spokesperson said. “We have alcohol and other age-inappropriate content to significant measures in place to review all ads before and 6 after they run, including automated systems and commence within weeks Section 11 of the Public Health human reviewers. Alcohol Act that would set a minimum price of 10c per gram of alcohol. “Anyone advertising on our platforms must comply with our policies along with all local laws and codes, The move would result in the prices of many cheaper such as those restricting the advertising of alcohol to alcohol products increasing, something Retail Ireland said minors in Australia. To support this, we also have age it understands and appreciates the health rationale for. restriction tools that all businesses can implement But it said the Government had previously committed to on their accounts themselves to control who sees not introduce MUP until similar rules were introduced in their content.” Northern Ireland, something that is not expected to On Tuesday Apple rolled out the latest update to its happen until 2023. iOS software for iPhones and iPads, which allows The current Programme for Government commits to users to opt out of apps like Facebook tracking implementation of MUP "in consultation with Northern people across the internet, limiting the data the Ireland". company can collect for the purpose of developing profiles for advertising. An Ibec report from two years ago estimated that a unilateral MUP move would increase the existing price differential on alcohol between the Republic of Ireland Ireland: Retailers' concern over plans on minimum and Northern Ireland from 27% to 38%, resulting in a unit price rules for alcohol direct loss to the Irish Exchequer of €94m. RTE "At a time when we desperately need a strong retail By Will Goodbody, Business Editor recovery, the Government is contemplating introducing April 28, 2021 rules that will drive significant volumes of trade north of Retailers have expressed deep concern at the border," Mr Dillon said. Government plans to introduce minimum unit price "This would be a major blow to businesses here and will (MUP) rules for alcohol before similar measures are result in a significant loss of tax revenue to the state." put in place in Northern Ireland. The Retail Ireland position has been supported by Retail Ireland has warned that such a move, without another Ibec sectoral group, Drinks Ireland. alignment with the North, is likely to lead to a surge in cross-border shopping, with people travelling into It said the drinks industry favours tackling the sale of Northern Ireland to seek lower prices. cheap alcohol to reduce alcohol misuse. The result of this, the organisation predicts, will be a But it said that while it acknowledges the delays in major loss of sales of not only alcohol but other Northern Ireland in introducing this measure, it believes goods to businesses in the Republic. MUP should be introduced in conjunction with the North, as committed to by the previous Cabinet decision. "If consumers travel to Northern Ireland to shop, they will inevitably spend money in a wide range of A series of questions on the topic sent to the Department retail and hospitality outlets, not just in grocery and of Health on the matter have so far not been responded off-trade," said Retail Ireland director, Arnold Dillon. to. "This will be at the expense of struggling businesses Meanwhile, Alcohol Action Ireland, the national here. While retailers in border regions will be hit independent advocate for reducing alcohol harm, said hardest, we have seen in the past that consumers the greater public good far outweighs the continued will travel long distances to save money. protection of private commercial interest. "In the absence of alignment with Northern Ireland, In a statement, Alcohol Action Ireland said there are retail businesses in significant swathes of the many factors contributing to consumers choice to shop in country could easily find themselves losing out." Northern Ireland. Weekend reports in the Sunday Independent Currency fluctuations, VAT differential and a significant newspaper said the Government is planning to cost of living gap remain the constant factors in such 7 considerations, and not the setting of a floor price While prior studies often didn't delve into why these for alcohol, it stated. heightened risks exist, the researchers said there are theories. For example, adolescents who develop earlier Alcohol Action Ireland maintains that with the than their peers may have weaker relationships with their introduction of MUP, the cheapest available alcohol parents or have less parental supervision. product in Ireland will still be cheaper than those products in Northern Ireland, as showed by a To this point, Bucci said there are conflicting theories Department of Finance Tax Strategy Group about how to parent adolescents who are more presentation last July. physically mature than their peers. "If Ireland is to make progress in addressing its "Parents want to do what is best for their children, and chronic alcohol-related public health crisis that is some may wonder whether a child who starts looking directly killing three people a day and indirectly older should begin to have some adult freedoms," said seven, we simply have to ensure that less alcohol is Jennifer Maggs, professor of human development and purchased," it stated. family studies. "Ultimately, we wanted to understand why adolescents who experience puberty at younger PUBLIC HEALTH NEWS ages drink more than others, including factors involving the parents." Parents more lenient about alcohol with teens who The researchers used data from more than 11,000 experience puberty early adolescents in the Millennium Cohort Study -- a News Release nationally representative sample of children in the United Source: Penn State Kingdom. Data was collected at various checkpoints April 28, 2021 throughout the children's lives, including information on UNIVERSITY PARK, Pa. -- Parents of teens who went whether they'd ever drank alcohol, how often they drank through puberty early may be more lenient when it and whether they had ever drank five or more drinks on comes to letting them consume alcohol, according one day. to a new Penn State study. But the researchers said They also gathered information about whether the that even if adolescents appear more mature, parents permitted alcohol use, as well as the adolescents' drinking alcohol is still not safe for them. "perceived pubertal timing." Rebecca Bucci, a PhD candidate in criminology at "In our study, the measure of pubertal timing is based on Penn State, said the study -- published today (April adolescents' reports of their own pubertal changes," said 28) in Child Development -- aimed to discover why Lorah Dorn, professor of nursing. "Adolescents were adolescents who go through puberty early are more asked a series of questions about their physical likely than their peers to drink alcohol. development and we averaged these scores for each "A surprising proportion of parents in our study person and compared them to the scores of same-sex allowed their early-developing children to drink adolescents who were very close to them in age." alcohol at the age of 14 -- in fact, one in seven," Bucci The researchers then grouped participants into three said. "It is important to remember that early puberty perceived pubertal timing groups -- early, on-time and does not mean the child is more advanced in late. cognitive or brain development. They are not older After analyzing the data, the researchers found that in years or more socially mature. So allowing them adolescents who experienced early puberty were more freedoms common for young adults is risky." likely to drink at age 14 than their on-time peers. According to the researchers, previous studies have Girls who went through puberty early were 29% more found that adolescents who go through puberty likely to have ever drank and 55% more likely to early compared to their peers are at a greater risk for frequently drink. Among boys, the results were 22% and problem behaviors, including being two to three 61% more likely, respectively. Boys who developed early times as likely to drink alcohol. were also 78% more likely to have binge drank compared to boys who went through puberty on time. 8

Additionally, the researchers found that adolescents As well as the spirits bundles, Your Coca-Cola is also who experienced earlier puberty were more likely to offering a Big Match Bundle, featuring multipacks of be allowed to drink by their parents. Coca-Cola and Coca-Cola Zero Sugar cans, which come with a Premier League branded football and holdall. Specifically, while 15 percent of parents overall allowed their adolescents to drink alcohol at age 14, The DTC website Your Coca-Cola, a joint venture between this was largely driven by parents of adolescents Coca-Cola European Partners and The Coca-Cola who went through puberty early -- 20 percent of Company, launched in November. those parents allowed their children to drink. Teens “The platform aims to drive long-term brand loyalty and who developed early were also more likely to have generate insight that will help Coca-Cola optimise its friends who drank and more likely to be allowed to range across all retail channels, by giving consumers hang out with peers without adult supervision. direct access to existing products and merchandise,” According to the researchers, these factors partially Marco Levy Geraldes, strategic project director at CCEP, explained why adolescents with early puberty had told The Grocer. higher rates of drinking. “It also gives us the chance to drive trial and deepen Bucci said the results suggest that parents can have penetration across our existing range, alongside testing a hand in helping their teens avoid early drinking. and refining new products and innovations before bringing them to market,” he added. "This further instills the idea that parents should consider not allowing their child to drink alcohol, In recent weeks the site has significantly ramped up its even if they appear more physically mature," said range. Last month it began listing Pringles products, Jeremy Staff, professor of sociology, criminology, which can be bought as part of bundles. and demography. "Even if their child starts to look “We’ve recognised the demand to serve a variety of like a teenager or adult at a young age, parents occasions, whether that’s celebrating, snacking or should maintain the level of support and structure working from home,” said Hugh Landsman, associate that matches their child's actual age and director for new platform and channel development at developmental maturity level." CCEP. ”Continuing to expand the available range on the ### site, both of our own brands and of adjacent categories from our partners, forms part of our test-and-learn The National Institute on Alcohol Abuse and approach to see what consumers want and need.” Alcoholism and the Economic and Social Research Council UK helped support this research. The DTC site “fills a gap in the market” by “facilitating mid-sized online purchases with larger multipacks not INDUSTRY NEWS typically available in retail and occasion-based bundle boxes” CCEP said. Coca-Cola bolsters DTC offering with spirits The company said the site was still in a “pilot phase”. bundles The Grocer Communications Leader Joins Wine Institute By George Nott Wine Industry Advisor April 28, 2021 By Press Release Coca-Cola is bolstering its DTC operation Your Coca- April 27, 2021 Cola with the addition of spirits to make up ‘mixers April 27th – SAN FRANCISCO – Wine Institute has bundles’. announced the appointment of Natalie Wymer to the Bottles of Bacardí rum, Bombay Sapphire gin, position of vice president, communications, effective Martini and a selection of Jack Daniel’s lines are now April 19, 2021. A resident of St. Helena, she assumes the available together with multipacks of Coca-Cola position from Nancy Light, who is retiring from Wine varieties and Schweppes sodas and tonics, in Institute in mid-May, following 24 years of service. bundles costing between £35 and £40. 9

“During her time with Wine Institute, Nancy has DAILY NEWS provided invaluable communications counsel to our members, while leaving a lasting imprint on the NBWA Increases Distributors Against Human Trafficking California wine industry,” said Robert P. (Bobby) Initiative Training Goal to 25,000 Employees Koch, Wine Institute President and CEO. “I’m NBWA more than doubles initial goal, capitalizing on initiative grateful for her many contributions and a seamless momentum transition in bringing Natalie on board.” NBWA Wymer joins Wine Institute after serving as April 27, 2021 communications vice president with SunPower Today during the 2021 Legislative Conference, the (NASDAQ:SPWR), a Silicon Valley-headquartered National Beer Wholesalers Association (NBWA) solar, storage and services company. She was announced a new goal for the Distributors Against responsible for communications strategy to internal Human Trafficking initiative: train 25,000 beer and external audiences and during her decade with distribution employees in total across the country to spot the company, focused on many key efforts including and report signs of human trafficking by the end of 2021. SunPower’s recent CEO announcement, its spin-off, federal tariffs and sales transactions and NBWA surpassed its initial goal of training 10,000 acquisitions. employees from the July 2020 launch to the end of 2021, in part thanks to a monumental effort by beer Wymer also has extensive federal and state distributors during National Slavery and Human government experience. She served in the Trafficking Prevention Month in January. During that Clinton/Gore Administration, including as month alone, more than 5,000 employees joined the fight communications director for the White House against human trafficking. Climate Change Task Force during the United Nations Climate Change Conference in Kyoto, Japan; NBWA president and CEO Craig Purser announced the communications advisor to U.S. Energy Secretary Bill new goal today during the first day of live programing at Richardson; deputy chief of staff to U.S. Labor the 2021 Legislative Conference, which is being hosted Secretary Robert Reich; and press secretary for the virtually for the first time. Denver Summit of the Annual G-8 meeting. She "We have been blown away by the support our members began her career working in Ohio government, have shown for the Distributors Against Human including for the governor, attorney general and Trafficking initiative since its launch," said Purser. "Our economic development department. initial goal was to train just over 10,000 beer distributors “With her extensive public- and private-sector to recognize and report the signs of human trafficking by experience, Natalie understands how to the end of 2021. I am excited to announce that we have communicate and educate different audiences on a already exceeded that goal, and we hope to more than wide variety of topics,” said Koch. “Her strategic and double our impact by training 25,000 employees by the comprehensive approach on communications, end of this year." especially on relevant policy issues, will be a great As part of the announcement, NBWA produced a video asset to our members and the community.” highlighting the outstanding work of distributors that are Established in 1934, Wine Institute is the public stepping up to combat human trafficking in their local policy advocacy group of 1,000 California wineries communities. The video showcases the significance the and affiliated businesses that initiates and advocates Distributors Against Human Trafficking effort has had on state, federal and international public policy to the beer distribution industry. enhance the environment for the responsible Beer distributors have a strong reputation as stewards of production, consumption and enjoyment of wine. their communities that are always willing to engage and The organization works to enhance the economic serve their neighbors. This program has brought that and environmental health of the state through its sense of responsibility to a new level. Many members leadership in sustainable winegrowing and a have highlighted that the training video was a wake-up partnership with Visit California to showcase call as well as a call to action. California’s wine and food offerings and the state as a top travel destination. 10

"NBWA's Distributors Against Human Trafficking Only businesses holding a license to sell alcohol at retail initiative has managed to mobilize tens of thousands can sell alcohol to consumers. That simple fact of beer distributors across the country in the fight complicates matters for unlicensed entities such as online against human trafficking in its founding year," said marketplaces, delivery apps, and delivery services that Camila Zolfaghari, executive director of Street Grace, would like to create or enhance platforms to facilitate a nonprofit focused on eradicated human trafficking. alcohol sales. Marketplace platform providers, alcohol Zolfaghari's experience fighting human trafficking licensees, and alcohol and tax regulatory agencies all has made her a valuable ally in building this have different goals and concerns when it comes to the initiative, and she frequently shares Distributors sale of beverage alcohol products. Against Human Trafficking as a blueprint for other In this Alcohol Marketplaces blog series, Rebecca Stamey- industries' human trafficking awareness campaigns. White, partner at Hinman & Carmichael LLP, and Jeff "The success of this initiative thus far makes clear Carroll, general manager of Avalara for Beverage Alcohol, that they'll have no problem meeting their ambitious will explore the multiple issues surrounding alcohol new goal by the end of this year. This increase in marketplaces and propose a compliance framework to eyes and ears on the ground will make a difference meet the goals and concerns of the different as beer distributors play an important role in the stakeholders. critical fight against this awful crime." Disclaimer: This post may constitute attorney advertising "Because of this campaign, more and more and is not intended to provide or be relied on as legal hardworking men and women across the country are advice. Perform independent legal research and consult looking for signs of human trafficking," Purser your lawyer. continued. "Beer distributors are making a difference-they are helping save peoples' lives. One of the central challenges facing regulators regarding NBWA promises our continued support, and we will beverage alcohol marketplaces is ensuring alcohol is not make our best effort to provide the resources sold or delivered to people that are not of legal drinking necessary to keep beer distributors vigilant in this age (LDA). Because third-party providers (TPPs) do not fight, ensuring they're well positioned to do their hold licenses themselves, in most scenarios, the TPPs do part to eradicate this crime from the communities not hold the legal obligation to verify the age of the they love and know so well." consumer; the licensee remains responsible for verifying LDA. And yet, the TPP is often the one delivering the About NBWA's Human Trafficking Initiative: Working alcohol to the consumer or coordinating its shipment on alongside a bipartisan group of state attorneys behalf of the licensee. Because of this, coordination on general and state alcohol regulators, the Distributors age verification requirements and responsibilities is Against Human Trafficking initiative centers around essential for operating compliantly. Before we dig deeper an awareness training video train the more than into best practices for TPPs, let’s begin by reviewing the 140,000 beer distribution employees in the U.S. to requirements for licensees that sell to consumers. recognize and report signs of human trafficking. Beer distributors are uniquely positioned to help For direct-to-consumer (DTC) shipping, licensees employ fight this heinous crime given their level of access to multiple strategies to ensure age verification, as outlined locations often unseen by the public as they visit in Avalara’s whitepaper Getting it right: The 4 steps to age around 600,000 licensed retail locations across the verification for direct shippers. The four steps are: country. Visit the Human Trafficking Awareness 1. Age affirmation: Customers visiting an ecommerce Resource Center for more information and website are required to affirm they’re of legal resources. drinking age prior to entering the shopping area 2. Date of birth (DOB) collection: A few states require Alcohol Marketplaces 2.0 Part 4: Who's direct shipper licensees to list the DOB of the responsible for ensuring legal drinking age? (blog) purchaser and/or recipient on shipping reports. Avalara 3. Age verification: Many states require formal age By Jeff Carroll and Rebecca Stamey-White verification of the purchaser, either through April 27, 2021 inspecting and maintaining a copy of government- 11

issued identification or by using an online age others by the licensee. Using the four steps for age verification service such as IDology. verification above, we’ve outline a sample flow: 4. Adult signature required (ASR): All DTC alcohol 1. Age affirmation: Since the TPP maintains the website shipments should use the common carrier or app, they should require an age gate before consumers (FedEx and UPS) ASR requirement, ensuring the can shop. Note that in California (other states may recipient signs for the package at the time of follow), ABC can use minor decoys who can lie about their delivery and a copy of the signature is archived. age at this point in the transaction in order to complete the sale. See ABC Rule 141.1, which does not require the For TPPs or delivery apps that solicit orders on behalf decoy to truthfully answer any questions about their age of licensees for local delivery of beverage alcohol at the time the alcoholic beverages are ordered (e.g., on products from restaurants or off-premises alcohol the website). Regardless, age affirmation is still a best stores (not through common carriers), the process practice and recommended by industry trade has fewer explicit requirements. When an order is associations. received, delivery is made by either an employee of the licensee or by a third-party delivery service. In 2. Date of birth collection: Especially in the states that either case, the licensee is responsible for ensuring require licensees to report the age verification of the the delivery driver verifies the age of the recipient. purchaser or recipient, TPPs should collect this The California Department of Alcoholic Beverage information from the customer and pass it through Control (ABC) clarified this last year in their Industry (securely) to the licensee. Advisory on Delivery of Alcoholic Beverages (April 3. Age verification: TPPs should use an electronic age 30, 2020). verification service to confirm the purchaser is of legal “For example, if a licensee relies on a third-party drinking age. The resulting confirmation should then be online service to pick up and deliver an alcoholic passed securely to the licensee so they can maintain the beverage to a customer, and that third-party service information for audit purposes. delivers the beverage to a minor, the licensee has 4. Adult signature requirement: For DTC shipments, this violated section 25658, is subject to discipline falls on the licensee because the licensee must control against its license, and its employees may be subject the fulfillment process. TPPs pass order information to arrest and criminal prosecution. This is so no through to the licensee who then accepts the order and matter what assurances the delivery service may takes it through their normal fulfillment process, ensuring have provided to the licensee.” the package is properly labeled and common carriers are Shortly after the COVID-19 pandemic started, the notified that an adult signature is required. In the case of California ABC issued its First Notice of Regulatory local delivery, the licensee should ensure their employees Relief, which included allowances for off-sale or contracted delivery services are trained on how to licensees to accept payment away from the licensed verify ID at the time of delivery. premises and for curbside delivery of beverage Unfortunately, age verification mistakes are hard to avoid alcohol products. In the period that followed, ABC entirely, even with the best training and procedures. found both a substantial increase in the delivery of Licensees that sell alcohol to minors through alcoholic beverages and an “alarmingly high” marketplaces may feel they have little to no control over incidence of delivery to minors. According to preventing the delivery of alcohol to minors and that they comments on the proposed emergency regulations shouldn’t be penalized for the acts of a third-party outlined in the ABC Industry Advisory on Delivery delivery driver. But alcohol regulators will hold the Minor Decoy Requirements, noncompliance may licensee responsible for the entire transaction, including have been as high as 70%. delivery to the consumer. The license consequences may Although the responsibility for ensuring age involve probation, a fine, license suspension, or even verification in TPP transactions ultimately falls on revocation, depending on prior history and whether the licensee, it’s key for TPPs and licensees to work there is a defense available. That’s why it’s essential for hand in hand to create an airtight process. Given the the licensee to ask the TPP hard questions about nature of the online ordering workflow, some compliance protocols and training and work closely with responsibilities are better handled by the TPP, and the TPP to set each delivery person up for success. 12

Have tax or compliance questions? Contact Avalara's same rules do not let businesses to continue their work Beverage Alcohol team. in a standard regime. Many companies had to close to follow the local law initiatives. If you are one of those Have legal or compliance questions? Contact companies, be sure there is always a solution. Alcohol Hinman & Carmichael LLP. businesses can easily gain as much profit as usual once using the benefits of online business development. How to Take Care of Your Online Business During a Since many people were forced to leave their workplaces Lockdown: Alcohol Business Edition during a lockdown, they could really appreciate some How to Conduct Alcohol Business Online During a vacation with alcohol. You can increase your sales during Lockdown covid significantly. All you need to do is to learn how to Vents Magazine conduct your successful alcohol business online. There is By RJ Frometa always more that you can do to succeed. For example, April 27, 2021 you can advertise your business online. Further, make sure to arrange a good delivery service. The coronavirus outbreak has changed the lives of millions of people around the world. Lots of The delivery services are not prohibited during a businesses have been closed recently. The pandemic coronavirus lockdown. Thus, you can easily sell your affects badly modern economics and forces people product online. Be fair, and there can be even more to change the ways of conducting business these willing buyers these days. People pay lost for alcohol and days. If you have to close due to safety and health always find reasons to celebrate. It can easily be your best reasons, you can figure out how to conduct your sales during coronavirus. People need to relax and forget business online. In fact, online business is the best about a deadly virus. And you are the one who can help solution to a current pandemic outbreak. 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There Besides, you can gain lots of profits once conducting are 2500+ servers in 42 countries to make your online your alcohol business online. business thrive. You can downloadand install the Modern online social media platforms can be a great required software to let your customers reach you from place to conduct your business nowadays. any corner of the world. Moreover, they offer lots of highly-effective virtual The free software assures more than convenient tools. Besides, it is very easy to engage your communication. With the servers all over the world, customers online. You do not need to worry about VeePNimproves communication with customers and the distance. Once using the top VPN server list, you increases sales in due course. You can always check the can arrange convenient communication with top list of VPN serversto select from online. customers from any corner of the world. Moreover, you can increase your sales greatly as well. It is definitely the best technology to improve communication with customers. There are many New Realities of Modern Online Business communication channels where you can share your ads. Development You can arrange and run a very effective online Social distancing is an important issue these days. To promotion campaign. Social media is one of the most not let the virus spread, even more, new rules and effective tools for online business development. With limitations are implemented. Mostly, these rules are millions of users and followers, social media is a great beneficial for public health. At the same time, those advertising platform. Besides, it is easy to navigate 13 various up-to-date websites and social platforms. lots of new opportunities for alcohol business owners if You can always find your target audience online. And they know how to adapt to modern realities. Online let be honest, alcohol businesses have a wide net of business is very effective and profitable. Also, they can be customers all over the world. really successful within a lockdown period. Just use all the opportunities you have to develop your business online, Promote Your Alcohol Business by Using the Latest and you will enjoy impressive profits for sure. Tools There are lots of up-to-date tools you can use to promote your business. Firstly, you need to prepare 20 Words and Phrases That Are So 2020 effective advertising materials for your target WPDH audience. The online promotion can be held April 27, 2021 effectively through various social media. There are millions of social media users these days. They easily "COVID-19" - If I heard this term before this year, I would reach any website they are interested in once using have thought it was for home improvement, like WD-40. the top VPN servers in the USA.When you have your I would have been very wrong. target audience analyzed and defined, it is easy to "Zoom" -Before 2020, Zoom was a kids television show in check the list of VPN serversyou can use with the the '90s. Now, it's used by millions of people to biggest benefits. It is greatly preferable to use all the communicate with one another. Thank goodness for available promotion tools. technology. Once you check the top VPN server list, be ready to "Unprecedented Times" - I think I have heard this phrase start your effective promotion campaign. To in every news segment since March. Before this year, I promote your alcohol business, use any or all of the think the only time I saw this phrase was in my high school following ideas: history book when I read about WWII. – Present and promote your unique gift cards; "Sorry, We're Out of Toilet Paper" - I still can't believe that – Promote your services in various social media; this was the product that flew off the shelves earlier this year. I remember going to five different stores, just trying – Hold some interesting and inspiring events online; to find one package. Times were tough. – Use various pleasant discounts and promotions. "Quarantine 15" - We have all heard of the "Freshman Any of the chosen ideas can be the winning ones for 15," but "Quarantine 15" is the unfortunate result of your business success. Advanced advertising politics being at home for months. Thank goodness the gyms are is highly beneficial. You can use all the tools you have opening. selected for your business. Keep in mind; effective "You're Muted Again" - Zoom became extremely popular online promotion can bring you even more this year, but before March, not many people knew what customers. You can increase your target audience is was. A lot of trial and error occured when people twice or more. Where other people see obstacles, started using it, and even still, people still can't seem to you can find lots of new opportunities. You should figure out that they need to turn their microphone on not lack any confidence when you are in the alcohol when they want to talk. business. It is a very profitable niche, even during the coronavirus outbreak and long-lasting lockdown. "Social Distancing" - Social distancing is the epitome of 2020. Six feet apart has never felt so lonely. People are tired of constant stress and scary coronavirus news. They tend to feel safe and happy "TOMpa Bay" - Of course, Tom Brady leaving the New all the time. It makes it very crucial for some goods England Patriots happened in 2020. With his arrival to the and items to be delivered timely. It is not unusual Buccaneers, Tampa Bay became "TOMpa Bay." that alcohol is one of the goods preferred by people "Stay Healthy" - In any other year, it would have sounded at different times. People can easily find reasons to a bit odd for someone to say this or to end an email in this buy some decent alcohol and celebrate. Your way. This year, it's super common. product can reach more satisfied customers these days without difficulty. In fact, lockdown can bring "Sports Are Cancelled" - This sentence was previously unheard of to me. In my 27 years, I have never seen 14 sports not find a way to happen. To be honest, it was improve upon the services and benefits that we provide to our weird, even for me. members. Please note that any views or opinions presented in this email are solely those of the author(s) and do not "The New Normal" 2020 ushered in an entirely new necessarily represent those of the National Alcohol Beverage way of life, and there are many new habits that will Control Association. most likely stick around for years to come. Welcome to the new normal. "Phone, Key, Wallet, Mask" - Leaving the house in 2019 meant checking for your keys, phone, and wallet. In 2020, add your mask to the mix, because you're not getting in anywhere without it. "Maskne" - That's the term for facial acne as a result of wearing a mask so much. I have never used so much acne cream in my life. "Mask Up" - In any other year, this phrase would be reserved for medical staff or umpires. Now, it's for everyone. "Essential Worker" - We quickly learned what it meant to be an essential worker this year, and I thank them for the hard work they've put in all year long! "I Hope This Email Finds You Well" - If you use your email account at all, I guarantee you have seen this heading. Newsflash: it's not finding me well. "Elbow Bumps" - It went from high-fives, to fist bumps, to elbow bumps. The less contact, the better. "Distance Learning" - The term that will haunt parents' dreams for years to come. Let's hope this one doesn't have to stick around. "Cohorts" - This term is typically saved for villians in movies. Now, it's the term for your "safety group" in public settings. Go figure. "Contactless Delivery" - A new age of take-out and delivery. No more awkward conversations with the pizza delivery guy; just drop it on the doorstep, please.

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