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The National Wine Policy Bulletin THE NATIONAL WINE POLICY BULLETIN APRIL 2014 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. FEDERAL GMO: Rep. Mike Pompeo (R-KS) will be introducing a bill backed by the Grocery Manufacturers Association that will create a voluntary federal labeling system for foods that are not genetically modified. The FDA would gain regulatory oversight of GMOs and would create federal rules to avoid various differing state laws and rules. TTB: TTB Issues Ruling Clarifying Bottling Taxpaid Wine in Growlers. The TTB issued a ruling clarifying the bottling of taxpaid wine in growlers. This has become a common practice by some retailers (such as Whole Foods) in certain states. The TTB has not been clear leading up to this ruling on exactly what the rules are for selling wine in growlers. According to the ruling: The filling of wine growlers or similar containers with taxpaid wine for consumption off of the premises is considered bottling or packing under the Internal Revenue Code of 1986, as amended (IRC), and any person who engages in this activity must first qualify as a taxpaid wine bottling house and also must comply with all requirements applicable to taxpaid wine bottling houses, including labeling and recordkeeping requirements under the IRC and the regulations in 27 CFR part 24. It is the official position of the TTB, that the filling of growlers with taxpaid wine for the purpose of consumption off premises is an activity that can only be conducted lawfully by a “qualified taxpaid bottling house.” The Internal Revenue Code of 1986, as amended, regulates the bottling, rebottling, packing and repacking of taxpaid wine by any person. Retailers and proprietors of wine premises are required by law to qualify as a taxpaid wine bottling house prior to conducting such operations. According to TTB, federal law allows the filling of growlers with wine under the following conditions for wineries or retailers: 1. Receive a permit from TTB to operate as a “taxpaid wine bottling house” 2. The Growler to be filled may be no larger in capacity than four liters 3. The Growler may be brought by the customer or purchased on-premise before filling 4. The filling of the Growler must be for the purpose of off-premise consumption. 5. The winery or retailer must keep specific records concerning tax paid wine, received, dispensed and removed from the premises. Wineries are required to hold a “basic permit” with TTB and obtain Certificates of Label Approval (COLAs) for labels that they produce, retailers are not required to hold a TTB license. A retailer that applies to be a taxpaid bottling house would then be subject to TTB jurisdiction and record-keeping requirements. Wineries or retailers that obtain the additional TTB permit would not need to obtain COLAs for growlers that are filled, at least as long as they are not pre-packaged for the consumers. This document is intended for WineAmerica members and members of the State and Regional Associations Advisory Council. Please do not distribute without express permission. Questions, contact Tara Marie Good at [email protected]. To read the entire ruling please go here: http://www.ttb.gov/rulings/2014-3.pdf FDA: The FDA published a Notice of Proposed Rulemaking (NPRM) in early March that would affect wines below 7% ABV and beers containing no malted barley or hops. According to the NPRM, there would be a mandatory declaration of added sugars on the Nutrition Facts label. They acknowledge that the sugar is converted into alcohol during the fermentation process and would mandate manufacturers to keep records of all relevant scientific data and information about the added sugar content before and after fermentation. The FDA acknowledges that they do not have adequate knowledge to the process and seeks comments from the industry by May 26, 2014. USDA: The USDA announced new plans to focus on small to mid-size farms at the National Farmers Union convention. Agriculture Secretary Tom Vilsack said that efforts will include improved access to USDA resources, educational tools focused on opportunities for farmers engaged in local and regional food systems, and an expanded budget to grant funds for training, development, and socially-disadvantaged farmers. A fact sheet outlining modifications to the USDA’s Farm Service Agency (FSA) Farm Loans Programs can be accessed at http://www.usda.gov/documents/2014-farm-bill-changes-to-flp.pdf. THE STATES NEW YORK Industry Funding: Governor Cuomo announced a $1.1 million federal fund through the U.S. Department of Agriculture for the research, protection, and safety of specialty crops in New York state, under the the Specialty Crops Competitiveness Act of 2014, amended by the federal 2014 Farm Bill. To apply for the funding, visit http://www.agriculture.ny.gov/RFPS.html. The deadline for the proposal is May 2, 2014, and announcements of awards will be September 2014. (New York Wine and Grape Foundation) Industry Infrastructure: Governor Andrew Cuomo has announced plans for a second “Governor’s Wine, Beer, Spirits & Cider Summit” in Albany on April 8. The first summit held in October 2012 resulted in several major regulatory, legislative, and promotional initiatives benefiting the New York grape and wine industry. NORTHEAST Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Pennsylvania, Rhode Island, Vermont MARYLAND Retailer Licensing: Baltimore’s Alcoholic beverages Act of 2014 (SB0486 and HB0831) sponsored by Sen. Verna Jones-Rodwell (44th) is under consideration by the House. Effective immediately upon enactment, the new legislation would prohibit the issuance of licenses to sell alcoholic beverages within 300 feet of a substance abuse center, alter procedures for license applications, and make the Liquor Board more transparent, among other amendments. The Liquor Board would be required to digitize all licensee records and have them available for public viewing by July 1, 2015. PENNSYLVANIA Privatization: Rep. Gene DiGirolamo, R-Bucks County, proposed a new plan to modernize, rather than privatize, Pennsylvania’s existing liquor system. His proposal allows the expansion of Sunday sales and direct-to-consumer shipping, and gives the LCB more pricing flexibility and the ability to build state This document is intended for WineAmerica members and members of the State and Regional Associations Advisory Council. Please do not distribute without express permission. Questions, contact Tara Marie Good at [email protected]. stores within grocery stores to allow the sale of alcohol in grocery stores, among other modernization initiatives. Gov. Corbett still supports a full privatization of Pennsylvania’s liquor system. While the Pennsylvania Legislature is still working on efforts to privatize or modernize the liquor system, some grocery stores have found ways to circumvent the sticky regulations. Wegman’s, Giant Food stores, and Weis Markets offer beer in Lancaster County, under the conditions that the beer is in an aisle separate from the store with a dedicated check-out lane and seating. SOUTHEAST Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia FLORIDA Beer & Spirits: House Bill 1329 authorizing certain manufacturers for the sale of growlers of malt beverages was passed through the Florida Legislature and is effective October 1, 2014. KENTUCKY Regulation: Senate Bill 213 sponsored by Sen. Tom Buford, R-Nicholasville, that will allow counties to vote on the sale of Sunday wine at small farm wineries was unanimously passed by the Senate Licensing, Occupations and Administrative Regulations Committee. The bill is now under consideration by the Licensing & Occupations House Committee. Retailer Licensing: House Bill 475, sponsored by House Speaker Pro Tem Larry Clark-D was passed by the Senate and House and was delivered to the Governor. The bill would allow residents in areas where state park lodges or golf courses are location to petition for the sale of alcoholic beverages in said state parks and golf courses. LOUISIANA Regulation; House Bill 830 introduced by Rep. Bryan Adams, R-Gretna, will allow wine to be shipped in containers up to 20-liter and 19 and five-tenths-liter containers when sold in or shipped to Louisiana, an increase from the current 18 liter container. The House Judiciary Committee passed the bill unanimously. It heads to the House for a full vote. TENNESSEE Retailer licensing: Gov. Bill Haslam signed HB 610 into law to allow grocery store sales of wine. The legislation allows cities and counties to hold referendums on the sale of wine in supermarkets. Despite the passage of the legislation, customers will not see wine in grocery stores until July 2016. The two year gap was allotted to liquor stores as a chance to prepare for the new competition, though lawmakers are now considering pushing the date up due to popular opinion. Grocery store giants are initiating petitions to see a vote on whether constituents want to see wine in grocery stores and other retail outlets put on the November ballot. The Tennessee Wine and Spirits Retailers Association (TWSRA) representing Tennessee package stores do not have the financial resources to compete with the clout of grocery giants such as Walmart, and instead will work with local grocers to raise awareness of the consequences of liberalizing alcohol laws. VIRGINIA Winery Licensing: HB 282 introduced by Rep. David Albo allows a contract winemaking facility to sell the wine it produced if the terms of payment have not been fulfilled in accordance with the contract with the winery that supplied the grapes or other agricultural products. The bill was signed by Gov. McAuliffe and is effective July 1, 2014. Winery Licensing: SB 178 sponsored by Sen. Jeffrey McWaters creates a new ABC permit allowing This document is intended for WineAmerica members and members of the State and Regional Associations Advisory Council.
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