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The National Wine Policy Bulletin

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The National Wine Policy Bulletin THE NATIONAL WINE POLICY BULLETIN SUMMER 2013 There are a number of issues we are following on our member’s behalf, with talking points, as well as a round-up of state issues from around the country. Please feel free to contact us with your questions and concerns. FEDERAL At the federal level, the theme this month is ‘it unlikely to be finalized before 2015. The reason has nothing to do with us but we have to live why WineAmerica continues to follow the with the consequences.’ progress of the rulemaking here is it remains to be seen how broadly or narrowly the Food & Farm Bill: A five year bill that would have Drug Administration (FDA) interprets the included solid funding for specialty crop and exemption. So far, FDA’s position would largely value add programs was voted down in the benefit wineries, but the delay until 2015 leaves House. Cuts to food stamps didn’t go far the door open for FDA to change its position. enough for Republicans and were far too deep for Democrats. The path forward is uncertain. In addition, FDA and the President have asked The bipartisan version that passed in the Senate Congress to establish new “user fees” to pay for is unlikely to be brought to the House floor. implementation of FSMA. Even if wineries are While there’s still time for momentum to shift, exempt from these fees, such a policy opens the the likeliest scenario is an extension of the door for TTB to seek something similar. existing law in September—which leaves some specialty crop programs still unfunded. TTB : On June 10, the TTB published a final rule regarding mandatory label information. The new Immigration: A proposal that includes balanced rule will modify the regulations regarding the agricultural labor reforms cleared the Senate, labeling of alcohol content on wine labels. but faces an uncertain future in the House. Currently the regulations specify that alcohol WineAmerica backed the efforts of the content must be on the brand or “front” label. Agriculture Workforce Coalition that helped The new rule will specify that alcohol content can forge a stakeholder agreement between now appear on other labels affixed to the agricultural employer and labor groups this past container. This new rule will conform the TTB winter and spring. While the strong bipartisan wine labeling regulations to the World Wine Trade support for the Senate immigration reform Agreement on Requirements for Wine Labeling. package gives theoretical momentum to the bill in the House, that momentum could prove Additionally, TTB has determined that a new illusory. If a House version proceeds, it is Certificate of Label Approval (COLA) will not be critical that it include the carefully forged required if the only change made to a agriculture stakeholder agreement that passed previously approved label is moving the as part of the Senate package. alcohol content to a label other than the brand or “front” label. Food Safety: Rules implementing the Food Safety Modernization Act (FSMA)—passed in TTB: On May 28, the Alcohol and Tobacco Tax 2011 with a first of its kind exemption that and Trade Bureau (TTB) issued a ruling (Ruling largely excludes wineries from the law—are now 2013-2) allowing for voluntary labeling of 1 serving facts and nutritional information on 2.5 ounces. This does not mean that the alcohol beverage labels. official definition of table wine is now 7-16%. It is still 7-14% alcohol by volume, but the TTB The ruling allows “serving facts” statements realizes that many wines not considered true that include the serving size, the number of dessert wines are now over 14.1% alcohol by servings per container, the number of calories, volume. Calorie, carbohydrate, fat and protein and the number of grams of carbohydrates, information must also be included with the protein, and fat per serving. Additionally, serving facts information on the panel. All serving facts statements may include nutritional information must undergo proper information about the alcohol content of the laboratory analysis. product, as a percentage of alcohol by volume, and may include a statement of the fluid ounces The voluntary labeling of nutritional of pure ethyl alcohol per serving. Industry information and serving facts information does members will not need to apply for new not preclude any of the other required Certificate of Label Approval (COLA) to add a information on a wine label. If the alcohol serving facts statement if it conforms to the content is listed on the serving facts panel, it examples contained in the ruling. still must be included on the label for COLA approval. A new COLA approval is NOT For wine, the standard serving size for table required if the serving facts panel is added to a wine (7-16% alcohol by volume) is 5 ounces. label that has already been approved by TTB. For dessert wine (16-24% alcohol by volume) is THE STATES NEW YORK MAP funds for export and $200,000 from another source for a New York City promotion. Regulation: Governor Andrew Cuomo’s Wine, NORTHEAST Beer & Spirits Summit in late October has led to Connecticut, Delaware, Maine, Maryland, Massachusetts, New many improvements in regulations governing all Hampshire, New Jersey, Pennsylvania, Rhode Island, Vermont the beverages (and hard cider); and the New York State Liquor Authority, the regulatory body MARYLAND which has long been the bane of our industry’s existence, has become an amazing partner of the Taxes: June 1 marked the enactment of a new industry. Also, the New York Wine & Grape laws designed to grow and support the MD wine Foundation (Jim Trezise) has created an informal industry, creating a $500,000 (aggregate) tax but active “Farm-based Craft Beverage Coalition” credit on qualified vineyard/winery capital with leadership of the respective groups purchases. See more info here. consulting on joint promotions and policy. Winery Licensing: The General Assembly also Industry Funding: The Foundation also took the created a new annual permit that, 1) allows lead (with the coalition) in developing a wineries to attend any/all farmers' markets; 2) comprehensive promotion proposal for $1 allows wineries to attend 21 other events million committed by Governor Cuomo, with away from their winery (with full sales some programs starting in May and others later abilities); and 3) creates a wine festival permit in the year. Separately, the Foundation received that organizations can obtain to allow wineries $1 million for its various research and promotion to attend/sell their products. programs, along with about $400,000 of federal 2 Marketing & Promotions: Maryland Wineries MIDWEST Association just wrapped up our 3rd annual Arkansas, Iowa, Kansas, Missouri, Nebraska, North Dakota, Maryland Wine Week program to encourage Oklahoma, South Dakota, Texas and promote support among wine shops and TEXAS restaurants. Trade Practice: The Texas Alcoholic Beverage PENNSYLVANIA Commission released a Marketing Practices Advisory that largely follows guidance issued by Retailer Licensing: The Pennsylvania Senate the California Alcoholic Beverage Control in 2011. preliminarily approved a bill that would privatize retail sale of wine—and eventually MISSOURI wholesale—along with: (1) allowing direct shipping; and (2) repealing the 18% Johnstown flood tax. The bill still faces a final Senate vote Retailer Licensing: In a highly public battle, a state court allowed Diageo to terminate a and a House conference before it can go to the Governor’s desk. distribution agreement with a local wholesaler in exchange for compensation. It could be fall before we know whether the plan The decision is likely to pull momentum out of will become law, partially because liquor the expensive and ongoing legislative battle privatization (and hence direct shipping) are over what constitutes a franchise, but could politically attached to passage of a transportation lead to new legislation that deals with “not bill, and partially because the House will mainly for cause” franchise termination. have to buy in to the Senate’s plan. ALIFORNIA C RHODE ISLAND Taxes: California adopted a $96.3 billion budget Taxes: In an interesting maneuver intended to on time this year. While social safety net cuts drive local sales, the state eliminated sales tax made in the past several years to deal with the on wine and spirits through mid-2015 while structural budget deficit were not restored, significantly raising alcohol beverage excise further cuts were avoided. This is directly due to taxes. The state will revisit the impact of the the effects of Prop. 30’s tax increases approved tax change over the next two years. last fall by voters and Governor Brown’s conservative approach to budgeting for 2013-14. GREAT LAKES Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin Regulation : AB 227, which is a narrow lawsuit abuse bill supported by Family Winemakers, MICHIGAN continues to move through the legislative process and stands an excellent chance of being Winery Licensing: Legislation to allow licensed enacted. The Governor’s effort at more broad winemakers that produce less than 5000 gallons Proposition 65 reform is slowly taking shape, annually passed the Michigan Senate and House however the business community in general, this spring and is expected to be signed by the including FWC, have objected to an initial Governor over the summer, paving the way for proposal since it would require alcohol permits to be issued this fall by the Michigan Liquor producers and distributors to reprint and Control Commission (MLCC). The MLCC will redistribute alcohol warning signs to over require 60 days to develop application procedures. 90,000 retail locations without significantly new information being presented to consumers. 3 Labeling & Advertising: The Department of Industrial Relations is starting a new look at the Taxes: OWA helped push back efforts to state’s heat illness regulations.
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