Wednesday, May 19, 2021 www.nabca.org

• OR: Merkley Helps Introduce Legislation to End Band on Shipping Alcohol • SC: South Carolina Distilleries Plan Growth With Passage of New Liquor Laws TODAY’S • Tokyo’s restaurateurs rail against alcohol ban as Covid measures bite HIGHLIGHTS • Alcohol use disorder has more stigma surrounding it than do other mental health conditions • Global alcohol sales plummet 15.8bn litres in 2020

CONTROL STATE NEWS NABCA NEWS MI: Michigan Liquor Control Commission Warns Visit NABCA’s COVID-19 Resource page for updates Parents of Underage Drinking Dangers During regarding policy changes that effect on- and off- premise retail operations. Prom and Graduation Season The Collection: An Alcohol Research Summary Press Release (formerly Annotated Bibliography) A comprehensive By the Michigan Liquor Control Commission overview of the latest scientific evidence on May 18, 2021 important topics related to alcohol policy. May 18, 2021 - With prom and graduation season Sharing Solutions E-Newsletter! A platform for the here, the Michigan Liquor Control Commission NABCA community to share successful plementations (MLCC) urges parents to talk with their teens and lessons learned about your good work. about the dangers of underage drinking. Parents are the number one influencer over their kids ADDITIONAL LINKS about making good choices by not consuming alcohol. Visit NABCA’s website for information on: • Control State Agency Information “During this time of celebration, it’s tempting for • Doing Business in Control States our high school students to consume alcohol, • NABCA News especially when they missed out on these memorable events last year with COVID-19 pandemic restrictions,” said MLCC Chair Pat Gagliardi. "Parents and other family members also need to be aware that they face severe consequences if they provide alcohol to minors, along with the fact they are endangering the lives of the kids they love." Parents may be surprised to learn that family and friends are the primary source for alcohol provided to their teens. In Michigan, those who supply alcohol to minors face serious penalties no matter if they are a parent, older sibling, aunt/uncle, acquaintance, or a stranger off the street who agrees to buy the alcohol for a fee. Michigan law makes it a crime for any person to sell or furnish alcohol to a minor with a $1,000 fine and up to 60 days in jail for a first-time conviction. And, if a minor dies as a result of 2 alcohol consumption -- whether it's alcohol • Michigan Coalition for the Reduction in poisoning, drowning, fall or traffic accident -- the Underage Drinking: mcrud.org. person who supplied the alcohol to that minor It is the mission of the MLCC to make alcoholic faces imprisonment for up to 10 years, a fine of not beverages available for consumption while more than $5,000, or both. protecting the consumer and the general public "The MLCC protects consumer's health and safety through the regulation of those involved in the through enforcement of state law, but we also importation, sale, consumption, distribution, and need parents to help us keep kids safe," said delivery of these alcohol products. Gagliardi. "Parents have a huge impact on their kids in educating them that drinking alcohol by anyone under age 21 is illegal, unsafe and unhealthy and OR: Merkley Helps Introduce Legislation to End can negatively impact their future in so many Band on Shipping Alcohol ways.” KQEN News Radio Tips for parents: May 19, 2021 • Discuss the dangers of underage drinking, binge Oregon’s U.S. Senator Jeff Merkley has joined a drinking and alcohol poisoning, drinking and group of colleagues in introducing the USPS driving, and getting into a car with a drunk Shipping Equity Act – a bipartisan bill to send the driver. prohibition-era-ban that prevents the U.S. Postal Service from shipping alcoholic beverage to • Talk with your kids about making good choices; customers. being responsible by saying “no” to alcohol and choosing not to drink amidst peer pressure. Merkley said currently private shipping can ship alcohol, but the USPS cannot. • Emphasize how alcohol can permanently impair a teen’s intellectual development and memory, Merkley said all American businesses deserve the as their brain is still growing. same access to the U.S. Postal Service when it comes to delivering products to their consumers. • Affirm that drinking alcohol is never the way to Merkley said it would ensure that wineries, deal with stress, problems or to feel socially breweries, and distillers in Oregon and acceptable. throughout American have another option to • Be a good role model and lead by example to consider when selling their world-class products. inspire your children to make healthy decisions. The release said the legislation would allow the • Stay connected with your kids and establish USPS to ship alcoholic beverages directly from trust. licensed producers and retailers to consumers over the age of 21, in accordance with state and Resources for parents to talk with their kids about local shipping regulations. The bill will give the the dangers of underage drinking: USPS two years to develop regulations and • Foundation of Advancing Alcohol implement the law. Responsibility: Responsibility.org; Ask, Listen, The legislation is endorsed by the Oregon Learn: Kids and Alcohol Don't Mix. Winegrowers Association, Oregon Distillers Guild, • National Institute on Alcohol Abuse and and the Oregon Brewers Guild along with a Alcoholism: Make a Difference: Talk to Your number of letter carrier organizations. Child About Alcohol - Parents | National Institute on Alcohol Abuse and Alcoholism LICENSE STATE NEWS (NIAAA) (nih.gov). SC: South Carolina Distilleries Plan Growth With • Family Education: The Senior Prom and Passage of New Liquor Laws Drinking: How to Start a Conversation - FamilyEducation. Forbes By Hudson Lindenberger, Contributor May 18, 2021 3

At first glance, the recently opened Burnt Church growth. When the distillers approached me, I Distillery seems out of place. Its impressive red agreed that we needed to level the playing field brick facade towers over you as you approach it, a for them the same way we did for the brewers. feeling only amplified upon entering it. A cathedral- We had done all the heavy lifting a few years like roof hovers three stories overhead, drawing before while passing the beer bills; it was much your eyes towards a 7,000 square foot tasting room easier to convince my colleagues about why it overlooked by a large stained-glass window. It's the made sense to change these laws," said Bennett. type of facility you would expect to find in the "We have seen a whole lot of success on the nearby metropolises of Savannah or Charleston, brewery side since we passed the bills, so I fully not in tiny Bluffton, South Carolina. But, recent expect to see the same results on the distilling changes to decades-old liquor laws in the state side.” could mean that more facilities like this will start The distillers also received a boost to their cause appearing throughout the state. when E&J Gallo Winery, the largest winery in the According to the latest data from the American world, announced in early March that they were Craft Spirits Association, the United States craft looking to build a large bottling and storage distilling industry has seen strong growth trends facility in the state. It would act as their East Coast over the last decade. From 2014-2019 the industry home bringing in $400 million in investments and experienced a 142% growth rate going from 906 employment of 500 people. Gov. Henry McMaster distilleries to 2,197. Those numbers mirror the and the state's top elected officials announced 111% growth rate the craft brewing industry saw in that they were behind the project. A bill was the same timeframe, according to the Brewers introduced to the legislature to amend the liquor Association. laws to allow an onsite wine tasting room and other changes. In South Carolina, like many other states, a complex series of laws left over from the repeal of With the spotlight on that bill, the distillers Prohibition existed. Each state crafted its own set introduced their bill and ended up attaching it as of laws to reintroduce legal alcohol into its borders. an amendment to the Gallo bill to shepherd it Some of the more restrictive were fashioned inside through the legislature. It passed with bipartisan the Palmetto State. support on May 4, and became law on May 17 when Gov Henry McMaster signed it into law. The All facets of the liquor industry had to deal with changes it makes are as follows. restricted sales on-premise, limited tastings, and early closing times of 7 pm. It severely limited the • Increase the tasting limit from 3 oz to 4.5 oz, growth of local distillers, vintners, and brewers. unlimited if food is served Two laws passed in 2014 and 2019 changed the • Allow distilleries to serve food and other kinds playing field for breweries. They were able to sell of alcohol pints on-premise, sell products to go, greatly • Expand hours of service from 11-7pm to 9- expanded hours, increase tastings, and allowed 11pm while also adding Sundays. Retail bottle them to serve food and other kinds of alcohol. In sales will be allowed Monday to Saturday response, the number of breweries went from 31 from 9-7 to 95 over five years, a 206% increase. Seeing that success, the state’s distillers organized and formed • Increase the amount of hard liquor that can the South Carolina Distillers Guild (SCDG) in 2017 to be sold for off-site consumption from 2.25 lobby for the same changes the brewers received. liters or 3 bottles to 4.5 liters or 6 bottles. They approached Republican Senator Sean Bennett, It could make an immediate impact on the state. the person who helped usher the two brewery bills The 29 micro-distilleries in the state have invested through the legislature, for help. $67.4 million into the state and local economies "I am a fan of entrepreneurism and small business. I so far ($60 million into production facilities, $6.2 hate to see government obstacles that impede million in jobs, and $1.2 million in agricultural purchases), according to the SCDG, with many of 4 them planning expansions now that the laws have CO: New study finds alcohol consumption-related changed. deaths up by 13% in Colorado “Our members have ambitious plans in the works The Denver Channel that have been hinging on this bill passing,” says By Micah Smith Scott Blackwell, president of the SCDG and the co- May 18, 2021 founder of High Wire Distilling Company in DENVER — On Tuesday, Well Being Trust, a Charleston. “They are projecting a 200% increase in national foundation that studies mental health jobs, $35 million in facility investments, and and substance issues, released a new study that another $3.4 million in agriculture purchases over found alcohol consumption-related deaths have the next four years. That doesn't even bring into increased by 13% in Colorado. account planned new distilleries and increases in the tourism business." According to the foundation, the latest numbers are from 2019 and are compared to statistics For Tony Chase the founder and master distiller of from 2018. Daufuskie Island Rum Company the changes in the law means an immediate expansion of his nine- Researchers said the reasons for the increase in year-old distillery. Located on tiny Daufuskie Island deaths may be attributed to a number of factors. the distillery relies on tourists to drive his business, “With alcohol, it’s something that we have the island is only accessible by boat, and the old socialized and normalized a bit more in our laws hampered the ability of his business to grow. society than we have other aspects of our mental “The passage of this law means that I will see a health,” said Dr. Ben Miller with Well Being Trust. significant increase in revenue by doubling my “We’re not likely to talk about heroin as much as bottle sales and the expanded hours means that I we are to talk about bourbon.” can offer a venue for tourists to visit in the evening on the island, the selection is limited,” he says. The Miller said other factors include alcohol distillery is moving forward on plans for a $700,000 consumption starting at a young age and an expansion that will expand storage facilities, double increase in the number of drinks the average their square footage, and add a restaurant onsite. adult consumes daily. They also will be increasing their workforce from But Miller said there are steps that can be taken four employees to ten. Chase is forecasting sales to to begin addressing the disturbing trend. grow from 40,000 bottles a year to 65,000. “Sometimes one of the most powerful While Burnt Church Distilling is an outlier for now, interventions is to ask someone if they’re OK. If its $13 million-dollar price tag and almost 24,000 you see one of your friends or your colleagues square footprint are impressive for any new that’s drinking too much, say something to them business; it could be a pioneer for future distillers in about it,” Miller said. the state. According to co-founder Billy Watterson, Miller also suggests state leaders can help plans are to ramp up production of its bourbons, implement preventative measures and programs vodkas, and gins over the next few years. Plans call as well as increase access to treatment. for expanding distribution throughout the country. Part of the revenue to fund the venture will come “We’ve got to make treatment a lot easier to from having a full tasting room and a steady stream access. Only about one in nine folks that have an of tourists searching them out. Others in the state identified substance abuse disorder are able to will be executing their own expansion plans now get care and that’s absolutely unacceptable. We that the laws have changed. The odds are good that need to be able to make sure that mental health there will be a significant number of micro-distillers and addiction services are available wherever spread throughout the state in a few years (more people show up,” Miller said. than the thirty nowadays) , and the impressive Miller said the pandemic could have a very large facility in the Carolina Low Country will not seem so impact on the number of alcohol-related deaths. otherworldly. Preliminary data from the Centers for Disease

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Control and Prevention is already showing an “That for a lot of people has been detrimental,” increase in drug overdose deaths. said Hopp. The statistics for alcohol-related deaths have not Some see these sales as a step in the right been released yet but Miller predicts we could see direction. yet another disturbing trend given the isolation and “It’s so revolutionary what’s happening in our other stresses that people have experienced over society,” said a women who works in the alcohol the past year. industry. People like Hupp worry. TN: Health professionals worry about "to go" “I would like for them to probably do some more alcohol sales research on the effects of it,” said Hupp. WSMV The Tennessee Alcoholic Beverage Commission By Carley Gordon also voiced concerns after several businesses May 18, 2021 were caught delivering alcohol to minors, but Lee NASHVILLE, TN (WSMV) - Gov. Bill Lee recently signed the alcohol to go bill on May 14. signed a bill extending “to-go” alcohol sales until 2024. If you or someone you know is struggling with addiction, visit However, there are concerns about how that https://www.cumberlandheights.org/ impact the health of some people. The pandemic hit and things changed quickly. INTERNATIONAL NEWS One day you couldn’t buy alcohol to go; the next Australia: Online alcohol sales ID check trial day you could have it delivered straight to your expands door. The Shout For customers it was convenient. by Andy Young “I didn’t even have to walk out my door,” said one May 19, 2021 Nashville resident. ConnectID, eftpos’ digital identity solution, is For businesses it was essential. expanding its trial a digital age verification process for online alcohol sales, following a successful trial “They wouldn’t have survived,” said another in partnership with Retail Drinks Australia. resident. The expanded trial was announced at today’s Experts at Cumberland Heights said when it comes Liquor Retail Summit and comes ahead of new to alcohol “to go” and delivery sales, there was an legislation in New South Wales, that will require unintended consequence with serious consumers to verify their age before they’re able ramifications. to purchase alcohol online, from July next year. “We have seen a drastic increase in alcohol and The initial trial involved connectID, global Identity drug use. Our census has gone up,” said Travis Service Provider Yoti and Sydney based specialist Hupp, a clinical director at Cumberland Heights. craft beer retailer Beer Cartel supported by He said easier access and less accountability makes technology partner MyIntegrator, to successfully addicts more likely to relapse. demonstrate end-to-end transactions, with auditable age verification. “Those people aren’t trained to identify abuse drinking or intoxication. They just drop it at your The expanded trial will now involve additional door,” said Hupp. online liquor merchants and further Identity Service Providers, including Australia Post. Couple that with anxiety, isolation and depression caused by COVID. Eftpos’ Entrepreneur in Residence Rob Allen said the trial demonstrates how digital identity technology can lead to the creation of easy to 6 implement ‘industry-led’ solutions that are simple consumer identities and take responsibility for for customers. providing this secure information only under the consent of the identity owner. “We are excited to be working with Retail Drinks Australia, Yoti and Beer Cartel on this very practical example of how digital identity can make life easier Tokyo’s restaurateurs rail against alcohol ban as and safer for merchants and consumers, and Covid measures bite expanding the trial further with new partners,” Allen said. The Guardian By Justin McCurry This solution makes it simple for consumers to May 18, 2021 identify themselves, while also helping alcohol merchants meet their compliance obligations. A vivid rainbow heralds the arrival of dusk in Tokyo, but the fabled promise of a pot of gold “EonnectID is collaboratively working with state must seem like a cruel joke to restaurateurs in governments, industry associations, businesses and Shimbashi, where office blocks stand in happy online merchants to simplify and manage a range of proximity to hundreds of watering holes. customer identity needs and requirements, helping solve compliance requirements for many different In pre-coronavirus days, nightfall would be the sorts of businesses,” Mr Allen said. cue for the neighbourhood’s neon lights to flicker into action and for touts armed with laminated Retail Drinks Australia CEO Michael Waters menus to beckon office workers inside with welcomed the expanded trial and said that the promises of cheap food and drink. association and its members are committed to the responsible promotion, sale and supply of alcohol But as Tokyo begins the fourth week of its latest beverage products. coronavirus state of emergency, the usual post- work bonhomie that spills out on to Shimbashi’s “We’re pleased to be working collaboratively with narrow backstreets has been replaced by anger partners like eftpos and other stakeholders on this and despondency. ‘industry-first’ age verification pilot for same day online alcohol sale and delivery that seeks to strike “Take a look … it’s empty,” says Yasuko Matsui, the right balance between good regulation and the the owner of a small restaurant serving Nagasaki- freedom to retail responsibly,” Waters said. style noodles. “We’re not allowed to serve alcohol, so no one is interested in eating out. Australian Regional Director of Yoti, Darren Pollard Imagine going to a pub or restaurant where you said Yoti is delighted to be integrated into the can’t even order a drink.” connectID identity exchange which we believe will further support awareness of reusable digital A ban on alcohol is one of several restrictions identities in Australia. Tokyo’s eateries have been told to observe as the city attempts to arrest a fourth wave of Covid-19 “We are excited to participate in this trial to infections, two months before it is due to host the collectively devise an industry-led solution for Olympic Games. Even those that switch to serving secure age verification for online alcohol purchases, only soft drinks must close at 8pm. As an at both the online point of sale and at delivery incentive, the government is offering daily which will provide shoppers a secure, safe and subsidies of between ¥40,000 (£258) and quick experience and online retailers a fully ¥200,000 (£1,292) depending on the compliant solution,” Pollard said. establishment’s size, along with the threat of a Eftpos began its new digital identity solution, ¥300,000 fine for noncompliance. connectID, mid last year, with the aim of making it Even alfresco drinking is discouraged, with burly easier for Australians to share, store and receive men in hi-vis jackets and baseball caps positioned personal identity information online. on street corners to deter “displaced” carousers While connectID securely facilitates the identity from congregating in a nearby park. verification or data exchange, it does not store the identity data. Identity service providers store 7

Japan’s third state of emergency, which targets While sales at fast-food chains have grown during Tokyo, Osaka and several other virus-hit the pandemic thanks to higher demand for prefectures, went into effect on 25 April and was takeaways, those at bars and izakayas, a type of supposed to end on 11 May, but has been extended informal bar that serves drinks and snacks, until the end of the month. plunged by almost 40% in March compared with the same month last year, according to the Japan While cases have fallen in recent days, infections Foodservice Association. remain stubbornly high, adding to concerns that the cycle of restrictions and periods of relative A report by Tokyo Shoko Research, a corporate freedom – combined with a slow vaccine rollout – analysis firm, says 842 restaurants nationwide will fail to make a significant dent in the capital’s filed for bankruptcy in 2020, up 5.3% from a year Covid-19 caseload. earlier. But it is at smaller izakaya pubs – a fixture of Japanese social and cultural life – where the Tokyo reported 732 cases on Tuesday – down from virus is causing most damage. In the year through 925 the same day last week – bringing its total to to the end of March, 175 went out of business – more than 153,000, with almost 2,000 deaths. an annual rise of 17%, it said. Japanese health experts have long pointed to the “People stayed away from pubs to avoid crowds,” heightened risk of Covid-19 transmission when the report said. “Small restaurants are also groups of people sit in confined, poorly ventilated suffering from the cost of investing in equipment spaces and remove their masks to eat, drink and to prevent the spread of the virus, such as chat. partitions.” But for Shimbashi restaurateurs, the measures Global-Dining, a large restaurant chain based in represent an existential threat. “The subsidies are Tokyo, is fighting back. It recently filed a suit too low, given that we can’t serve alcohol and have seeking damages from the metropolitan to close very early in the evening,” said Matsui, government, claiming the order to close is illegal adding that her restaurant was “just about and infringes on its constitutional right to conduct surviving” by offering special deals to the lunchtime business. office crowd. As the clock ticks towards 8pm – when her Others complain that the subsidies don’t come restaurant would normally be heaving – Matsui is close to matching the profits generated by alcohol preparing to lower the shutters after another sales. One bar owner, who asked not to be named, evening of frustration. “We’re trapped in a vicious said his takings had fallen by about 60% since the cycle and the politicians aren’t listening to us any start of the pandemic. more,” she said. “It feels like they have got their “We will probably be able to survive, but there are hands around our throats.” lots of smaller places around here that were encouraged by the government to take out loans earlier in the pandemic. Now they have to start New Zealanders Follow Global Trend of Drinking paying them back, but they can’t. We are going to Less Alcohol see a lot of places going bankrupt.” Press Release Elsewhere in the neighbourhood, diners pack into By the Alcohol Beverages Council the few restaurants that have decided to open up, May 19, 2021 while others display signs stating that they will The NZ Alcohol Beverages Council (NZABC) says remain closed until the end of the state of declining alcohol consumption in New Zealand is a emergency. A small number look as if they will trend seen globally, even with an ongoing never reopen. pandemic. The International Alliance for Their pain is being felt across Tokyo – whose Responsible Drinking (IARD), of which NZABC is a endless gastronomic possibilities have helped earn member, found new data from over 100 countries it more Michelin stars than any other city in the shows consumers worldwide bought 15.8 billion world – and other parts of the country. fewer litres of alcohol beverages in the past 8 year.[i] Lockdowns, closure of hospitality venues, private sectors working together to accelerate the and restrictions on socialising with friends and positive trends. Still, we also need to take a family contributed to alcohol sales volumes pragmatic approach to reduce harmful drinking ¬– declining by more than 6%, but studies have also targeted education programmes are sensible shown people are choosing to drink less. solutions to helping educate young people on alcohol harm and encouraging adults to make New Zealand government data shows a similar better decisions around drinking, as well as decline, with alcohol available for consumption at targeted help and support for those who need it 8.719 litres of alcohol available per head of most,” Bridget says. population in December 2020 compared to 8.752 litres in December 2019.[ii] [i]Euromonitor International Proprietary Alcoholic Drinks data “The global decline in consumption has been brought about by impacts on how we can socialise Top twenty markets by Global alcohol sales during the pandemic, but also people making better alcohol sales volume volume year-on-year drinking decisions based on their personal Market growth 2019-2020 circumstances and lifestyle. The pandemic has been China -8.5% a reason for people world-over to think about their USA -0.6% alcohol consumption and health and wellbeing. The Brazil 4.1% majority of New Zealanders drink moderately and Germany -5.2% responsibly. Still, it’s always good to check that our Russia 1.7% consumption of alcohol is part of a balanced Mexico -7.2% lifestyle,” said Bridget MacDonald, NZABC’s Japan -5.9% Executive Director. United Kingdom -10.1% India -19.0% Over lockdown, over one-third (36%) of New Spain -14.4% Zealanders didn’t drink at all, one-third (34%) were France -8.0% drinking less, and nearly half (47%) consumed Vietnam -14.0% about the same. Post-lockdown saw drinking habits Poland -5.9% return to pre-lockdown levels for most New Italy -8.5% Zealanders, with two-thirds (64%) drinking at their South Korea 0.4% usual (pre-lockdown) levels and 22% reporting they South Africa -20.4% were drinking less than usual. The number of Canada 0.4% Argentina 2.7% everyday drinkers also declined. [iii] Similar Australia 1.3% patterns were found globally, with well over 80% of Thailand -9.3% drinkers consuming the same amount or less.[iv]

“There’s a shift in social attitudes toward alcohol, [ii] Decreasing alcohol consumption: StatsNZ with consumers choosing more no- and low-alcohol Infoshare, Alcohol available for consumption to options. Industry research showing 40% of people December 2020 (published 25 February 2021), choose to drink low-alcohol beverages,” Bridget http://archive.stats.govt.nz/infoshare/. says. [v] Alcohol available for consumption has been “Momentum for change toward moderation is trending downward for a number of years. Data gaining ¬through positive trends such as a general shows alcohol available for consumption was decline in hazardous drinking, fewer younger 8.719 litres per head of population (15 years and people drinking, consumption decreasing, and per older) in December 2020 and 9.607 litres in 2010, capita, we consume less alcohol than the OECD resulting in a 9.2% decrease (see graph 1 below). average,” Bridget says. [vi][vii] There has been a 15.4% decrease since 1990 “There is still room for improvement when it comes when it was 10.316 litres, and a 22.7% decrease to one in five people drinking harmfully in the past since 1986 when the data was first collected year. That’s a global issue, and it’s not okay. We where there was 11.282 litres per head of need an all-of-society approach with public and population (15 years and older) in December 2020 9

(see graph 2 below). The per head of population (15 low-alcohol beverages were preference (22%), years and older) is the measure used by the OECD. health (18%) and driving (17%). Graph 1. Litres of Alcohol Per Head of Population in [vi] Decreasing alcohol consumption: StatsNZ New Zealand (Annual-December, 2010-2020, 15 Infoshare, Alcohol available for consumption to years and over) Source: Stats NZ Infoshare December 2020 (published 25 February 2021), (February 2021) http://archive.stats.govt.nz/infoshare/. NZ consumption below OECD average: OECD Alcohol available for consumption has been Alcohol Consumption, trending downward for a number of years. Data https://data.oecd.org/healthrisk/alcohol- shows alcohol available for consumption was consumption.htm. Alcohol consumption is defined 8.719 litres per head of population (15 years and as annual sales of pure alcohol in litres per person older) in December 2020 and 9.607 litres in 2010, aged 15 years and older. The OECD average resulting in a 9.2% decrease (see graph 1 below). consumption is 8.9 litres/capita (aged 15 and over). There has been a 15.4% decrease since 1990 New Zealand is at 8.8 litres/capita. See graph 3 when it was 10.316 litres, and a 22.7% decrease below. Source: OECD Health Statistics, 2019. New since 1986 when the data was first collected Zealand figures as at 2018. where there was 11.282 litres per head of population (15 years and older) in December 2020 [iii] Health Promotion Agency research on (see graph 2 below). Note: The per head of consumption over lockdown in NZ: population (15 years and older) is the measure https://www.hpa.org.nz/research-library/research- used by the OECD. publications/the-impact-of-lockdown-on-health- risk-behaviours Health Promotion Agency, Post-lockdown survey - Vietnam’s Wine Industry and Opportunities for the impact on health risk behaviours, 28 July 2020 Australian Investors https://www.hpa.org.nz/research-library/research- Vietnam Briefing publications/post-lockdown-survey-the-impact-on- Written by Lisa Prodent and Pritesh Samuel health-risk-behaviours May 19, 2021 New Zealand Health Survey 2019/20, November Vietnam’s resilient economy and control of the 2020, pandemic have made investors note the country’s https://www.health.govt.nz/publication/annual- rising economic stature. Among products that has update-key-results-2019-20-new-zealand-health- seen considerable growth in sales over recent survey Four in five adults (81.5%) drank alcohol in years has been wine. Starting from a very low the past year and are moderate drinkers. One in level, the Vietnam wine market is booming, with five drank (20.9%) in a hazardous way. hotels, restaurants, and retailers now offering a [iv] Global consumption over lockdowns: YouGov wide variety of wines from around the world. for IARD in May 2020 and November 2020 that This has taken further prominence due to China’s found that 84% and 86% of drinkers were recent tariffs of over 200 percent on Australian consuming the same amount or less alcohol during wine for a five-year period. While this has left shutdowns. Australian winemakers looking for alternative [v] No- and low-alcohol consumption: NZ Alcohol markets, ASEAN countries, such as Vietnam, are Beverages Council, New Zealander’s attitudes to emerging as key wine trading partners. alcohol, December 2020, poll of 1000 New Tackling Vietnam’s burgeoning wine market is one Zealanders: Do you drink low-alcohol beverages, of Australia’s strategies to cope with the losses and if so have you consumed more or less in the incurred due to the pandemic. Alongside, it will past year compared to 12 months ago? 40% of establish a new, stable, and reliable trade respondents say they drink low-alcohol beverages. partnership as China reduces its consumption of 25% say they are drinking the same amount of low- Australian wine. alcohol beverages, 8% more and 8% less than a year ago. The most common reasons for drinking 10

The South Australian Wine Industry Association In addition, corporate gifts represent a key market announced in 2020 its plan to look for new partners segment with the most popular occasions being in ASEAN and diversify exports. the Vietnamese New Year festival or Tet which can generate up to 80 percent of wine sales. Vietnam Briefing takes an in-depth look at Companies in Vietnam also tend to spend on wine Vietnam’s wine industry and opportunities for orders as end-of-year gifts for employees as well Australian investors affected by China’s tariffs. as partners. ASEAN countries including Vietnam are emerging as Drinking culture key wine trading partners. In these low-price- sensitive markets, the popularity of Australian wine According to a survey conducted by the Ho Chi is growing as it becomes cheaper thanks to customs Minh City University of Education, most of the duties exemptions and free trade agreements. This respondents agreed that drinking alcoholic growth is further supported by the increase of products is to well observe social etiquette, tourism in these regions, which counteracts exhibit a proper manner at work, and build and religion-related factors that could shrink the maintain social networking and business number of potential consumers. relationships. This mindset has existed in Vietnamese society for ages. In addition, Recently, Vietnam has become the wine industry’s Vietnamese people are able to consume alcoholic focus of interest. This transitional and promising products for any celebrations. alcohol market could become Australia’s strongest trade partner, to compensate for the loss of China, The drinking culture also reflects on consumer but also to mitigate the effects of the pandemic behavior and understanding it is vital. Research suffered by the industry. conducted by Ipsos UU reveals crucial differences in alcoholic consumption behaviors of people Cheap beer is highly popular in Vietnam but is living in the three main regions of Vietnam. increasingly competing with wines, as tastes Northern Vietnam-based consumers tend to be change, and a growing middle class demands higher trend followers, pay strong attention to quality alcohol. packaging, especially for products that are gifted Wine is now a staple at many social interactions, and have considerable knowledge of different such as business dinners. brands. Currently, Vietnam’s local wine market features Central Vietnam-based consumers tend to be wines from such areas as France, Italy, Chile, the reserved, less willing to try new brands, and US, and Australia. The best-selling wines are reds prefer local brands. The absence of a variety of with around 65 percent of the market, followed by brands can be a key reason for this trend. By whites with 25 percent, and sparkling wines with 10 contrast, people living in Southern Vietnam are percent. classified as easy-going consumers who are willing Industry Opportunities to try new brands and are knowledgeable about different brands. Growing middle class with increasing income Foreign bands preferred Vietnam’s population is projected to reach 101 million by 2025 with the working-age population Vietnamese people have seen vast improvements accounting for 60 percent of the total, and a in their standard of living and consumer spending median age of 30. Further, Vietnam’s middle class is power, along with a strong obsession with foreign expected to reach 95 million by 2030 – the fastest products, believing them to be of higher quality. growth rate in Southeast Asia as per market Therefore, Vietnamese consumers nowadays are research firm Nielsen. willing to pay more money to try higher quality products, thus creating room for imported Going further, wine producers can target major products. cities such as Hanoi, Ho Chi Minh City, and Da Nang, which have working professionals that are well- In addition, as the retail industry is moving away educated and well-traveled. from traditional to modern retail, it is not difficult 11 for consumers to find imported alcoholic products for companies seeking to gain a better in supermarkets. understanding of the Vietnamese market. Free trade agreements Most recently, mergers and acquisitions (M&A) have become an increasingly popular route for Vietnam’s myriad of free trade agreements (FTAs) investors looking to begin operations in Vietnam. has helped it further become competitive attracting With an M&A, investors can enjoy pre-existing foreign investors to relocate production or set up access to consumers, locations, and distribution operations. The main objective of FTAs is to make channels. an integrated market among country members by substantially reducing or fully liberalizing custom This local knowledge can prove critical to tariffs for imported products. Australian wine successful operations within Vietnam’s vibrant producers can make use of two free trade but rapidly changing investment environment. agreements the Comprehensive and Progressive Investors that find it challenging to enter the Agreement for Trans-Pacific Partnership (CPTPP) Vietnamese market may find that the M&A route and the ASEAN-Australia-New Zealand Free Trade provides a unique solution to several obstacles. Area (AANZFTA). What are the tariffs and compliances applicable to Investors should study the specific FTA that would exports to the Vietnamese market? best suit their market entry. For example, wine of There are several tariff and compliance fresh grapes (HS Code 2204) sees a tariff rate of 27 regulations that suppliers should be aware of. percent as per the CPTPP and 20 percent as per the These are: AANZFTA by January 2022. However, by January 2026, as per the CPTPP, it would decrease to 15 • A US$50,000 import license for selling wine in percent lower than AANZFTA’s 20 percent and by Vietnam. The authorities grant liquor 2028 it would go down to zero. (Click on link to see distribution and wholesaling licenses based chart.) on quotas. Industry Challenges • Advertising for the sale of wine is strictly regulated, as products with an alcohol While Vietnam is open to foreign investment and content overcoming 15° cannot be mass- has an open market policy, the government is advertised and under 15° is restricted. known to protect the domestic industry. Exporters should be aware of frequent regulatory changes as • Certificates and documents must be provided well as the three district regions of the North, to public authorities to allow the import of Central, and South. Investors should consider these wine in Vietnam – namely, but not only, a factors when planning for market entry. health certificate, a technical standard certificate, and a certificate of origin, in While there have been positive developments in addition to product checking. the wine industry Vietnam still uses a range of protectionist policies that raise costs such as • A 50 percent import tax applies to all types of customs duties, excise duties, and value-added tax. wines coming from Australia, resulting in preferential tariffs granted by the AANZFTA. Market Entry Still, the Comprehensive and Progressive There are several options for Australian investors to Agreement for Trans-Pacific Partnership enter the Vietnamese wine market. Common (CPTPP) – to which Vietnam and Australia are market entry strategies can be to partner with a signatories – will reduce tariffs to 20 percent local partner, use a trader, distributor or agent. in January 2022 and then to zero percent in Investors may also import products and distribute 2029. them to wholesale and retail channels. Investors • A 65 percent Special Sales Tax (SST) is applied can also choose between several office structures for wines with an alcohol content above 20 when entering the market, for example, a Any concentration under this is obligated to representative office (RO) offers a low-cost entry pay a 35 percent SST. 12

• A 10 percent Value Added Tax (VAT) on all kinds interest amongst the public towards wine. The of liquor, including wines, sold on the consumption of alcohol is a daily event for many Vietnamese territory. Vietnamese, and with the nation’s growing consumer class, the number of consumers Wine imports are regulated by Vietnam’s customs available over the coming years should be laws and other relevant regulations. Imported wine significant. must also be inspected before clearing customs with import declarations either submitted before or However, as with any emerging market, 30 days after arrival. The product must also come opportunity comes with risk. Investors should with a certificate of origin which is used to factor in several issues depending on the product determine the preferential tax rates. Duties are and market size and do their due diligence when required to be paid before the delivery or entering this vibrant market. shipment. In addition, imports are subject to Vietnam’s PUBLIC HEALTH NEWS labeling regulations which means that the product Alcohol use disorder has more stigma name/brand must be shown in Vietnamese. surrounding it than do other mental health Why Vietnam is an attractive wine market? conditions The Vietnamese wine market represents a Healio significant opportunity for Australian importers and By Joe Gramigna, MA producers to tackle. Currently, it is said to be May 18, 2021 mainly held by French brands (at 35 percent) and Stigmatization surrounding alcohol use disorder is Chile (at 25 percent), closely followed by Italian and high compared with most other mental health Australian brands. The market brought US$5.3 conditions, according to results of a systematic million to Australia in 2020. review published in Alcoholism: Clinical & The alcohol competition in Vietnam is tough: wine Experimental Research. competes with beer, which is cheap and very “Understanding the public stigmatization of popular among all social categories. According to people with mental disorders or substance use Vietnam Credit, nearly 75 percent of the population disorder is essential to reduce or eliminate drinks beer. negative consequences for those affected and At the same time, Vietnam’s consumption of warrants particular attention in research,” Carolin alcohol increased by 95 percent from 2010 to 2020, Kilian, a research assistant and doctoral candidate meaning market growth is solid, and opportunities at the Institute of Clinical Psychology and are multiplying. Psychotherapy at the Dresden University of Technology in Germany, and colleagues wrote. Vietnamese lifestyles have certainly not yet “Yet, most research on the public's mental health integrated wine into their consumption habits but stigma has employed descriptive rather than tastes and preferences are progressively systematic approaches or conceptual models westernized as the middle-class grows – three which are needed for an in-depth understanding. million people joined this group between 2014 and In this systematic review, we summarize 2016. Vietnam already accounts for the third- population-based research on the public largest ASEAN wine consumer market, as its stigmatization of people with [alcohol use consumption accounted for 15.3 million liters in disorder] compared to the stigma of other 2020. According to the World’s Top Exports data, conditions (ie, mental disorders and other from 2018 to 2019, wine consumption increased by [substance use disorders]).” 173.6 percent. Infographic data derived from: Kilian C, et al. Takeaways Alcohol: Clin Exp Res. Despite its difficulties, Vietnam offers an exciting 2021;doi:10.1111/acer.14598. opportunity for those involved in the wine industry. There is significant room for growth and growing 13

The current study updated findings of a prior DAILY NEWS systematic review conducted in 2011 that evaluated attitudes toward individuals with alcohol Global alcohol sales plummet 15.8bn litres in use disorder. Kilian and colleagues searched five 2020 databases for population-based studies on public The Spirits Business stigma toward alcohol use disorder and at least one by Melita Kiely other mental health condition, published between May 18, 2021 Oct. 1, 2010, and Dec. 20, 2020. This allowed them to include all studies published since the prior The Covid-19 pandemic caused a 6% decline in systematic review in this research area. They global alcohol sales in 2020 – a 15.8-billion-litre included 24 records with results from 16 unique drop compared with the previous year. studies conducted in nine different countries. According to new data from Euromonitor Results showed individuals with alcohol use International, consumers worldwide bought less disorder were generally less likely to be perceived alcohol in 2020 amid on-trade closures and social as having a mental condition compared with restrictions. individuals with mental disorders unrelated to Euromonitor International worked with YouGov to substances. Moreover, they were seen as being survey 11,678 adults (aged 18 and over) online more dangerous and responsible for their between 13 and 21 May 2020. condition. Certain studies showed a stronger preference for social distance from individuals with A second sample of 16,657 adults was surveyed alcohol use disorder compared with individuals between 30 October and 11 November 2020. The with depression or tobacco addiction, with people data over both periods was collected from more less likely to want individuals with alcohol use than 100 countries. disorder to marry into the family or take care of The top markets for alcohol sales by volume were children. China, the US, Brazil, Germany and Russia. China Kilian and colleagues observed no consistent reported a year-on-year alcohol sales volume differences in the public stigma toward individuals decline of 8.5% between 2019 and 2020, with alcohol use disorder compared with those according to the data, while the US was down with other substance use disorders. 0.6%. Brazil grew 4.1% over this period, but Germany fell 5.2%, and Russia rose by 1.7%. “The findings suggest that the development of stigma toward people with [alcohol use disorder] is The International Alliance for Responsible complex,” the researchers wrote. “For example, Drinking (IARD) said the results provided ‘further labeling [alcohol use disorder] as mental illness was evidence’ that the ‘vast majority’ of consumers associated with a lower likelihood of expressing were drinking the same or less alcohol during anger, but with an increased likelihood of Covid-19 lockdowns. expressing fear toward those with an [alcohol use However, the organisation, which is dedicated to disorder]. This could indicate that [two] contrasting reducing harmful drinking, highlighted emerging conceptualizations shape our responses to [alcohol data from some countries that suggested some use disorder]: If regarded as a stable and trait-like groups were seeing ‘intensified’ levels of harmful condition, related to assumptions on ‘bad drinking. IARD stressed the need for targeted character,’ blame and feelings of anger might be support to help people who have struggled the less pronounced but fear and social exclusion most during the pandemic. nevertheless high. Henry Ashworth, IARD president and CEO, said: “Conversely, if regarded as a ‘bad behavior’ — that “Despite reports of people rushing to stock up on is, a state that needs to be overcome — moral alcohol in supermarkets, pictures of empty judgments and blame of people with [alcohol use shelves, and fears that people would drink more disorder] could be harsher, possibly leading to when confined to their homes, these figures more discrimination and social exclusion,” they definitively show that less alcohol was bought in added. 2020. 14

“Although the majority of drinkers continue to (Hollywood Vodka did not participate in the consume alcohol at moderate levels, we recognise appeal). That section of the Patent Act does that the pandemic reinforced harmful drinking provide for intervention, but only specifically for patterns in some people. appeals from the PTAB, and only in derivation, IPR, or post-grant review proceedings. “As societies begin to reopen it is essential for private, public and civil society to come together to The Director shall have the right to intervene in an ensure that targeted and appropriate support is appeal from a decision entered by the Patent Trial available for those who need it most.” and Appeal Board in a derivation proceeding under section 135 or in an inter partes or post- grant review under chapter 31 or 32. Hollywood, Alcohol, and Trademarks Section 143 obviously does not provide authority Patentlyo for the PTO to intervene in an appeal from the By Dennis Crouch TTAB. However, that may be harmless error as May 18, 2021 the Federal Circuit has previously allowed Kaszuba v. Hirshfeld (Supreme Court 2021) [Petition intervention in trademark cases. See In re Bose for Certiorari][FedCir Decision] Corp., 580 F.3d 1240, 1243 (Fed. Cir. 2009) (“Because the original appellee Hexawave did not This pending petition for certiorari involves a appear, the PTO moved, and the court granted trademark registration dispute between Kaszuba leave to the Director, to participate as the (HOLLYWOOD BEER) and Hollywood Vodka LLC appellee.”). (HOLLYWOOD VODKA). Kaszuba first registered his mark (albeit on the Secondary Register). Later, HVL Note there are lots of brewing Hollywood TM was denied registration — in part because of the disputes. Below is a screenshot of a few TM cases existence of the Kaszuba’s mark. HLV then filed a at the PTO. cancellation proceeding before the Trademark Trial

& Appeal Board (TTAB). After a drawn-out process, the Board eventually sided with HLV—entering HBCU Alums Launch First Black-Owned Alcohol judgment against Kaszuba as a sanction for Delivery Service discovery violations. Yahoo! I’ll note that neither of these brands stand-up to By Jeroslyn Johnson May 18, 2021 the more popular Hollywood Brewing Co. (Hollywood, FL). The first Black-owned alcohol delivery service is on the market and it of course was created by a Kaszuba’s new petition for writ of certiorari to the pair of HBCU alums. U.S. Supreme Court asks three interesting questions: Navarros Grevious and Mikáel Pyles are Clark Atlanta University grads, fraternity brothers, and 1. Whether the Federal Circuit erred in finding that the owners of the alcohol industry’s latest game- Hollywood Vodka had standing under Lexmark and changer, QuikLiq. The platform allows customers 15 U.S.C. § 1064. to purchase wine, beer, and spirit beverages from 2. Whether the Federal Circuit err in allowing the comfort of their digital device and have them Intervention by the USPTO Director under, the delivered to their front door. patent law provision of 35 U.S.C § 143. “QuikLiq is a tech-forward digital marketplace 3. Whether Administrative Trademark Judges are, that provides our customers with access to the for purposes of the Appointments Clause, Principal best selection of wine, beer, and spirits, right Officers who must be appointed by the President from the comfort of their homes,” the company with the Senate’s advice and consent. website says. “By partnering with the premier The second question is where plain error lies. In its alcohol retailers along Miami Beach and decision, the Federal Circuit allowed the U.S. Gov’t throughout the US, we have set out to enhance to intervene in the case based upon Section 143 the way our customers and retail partners 15 interact through digital engagement. With just a click, we are bringing the essence of Miami Beach and all the great vibes that come with it, right to your home. ” Due to the COVID-19 pandemic, QuikLiq currently only operates in Miami, but the company has plans of expanding into the state of Georgia in 2021, Black Business reports. Everything from premium tequilas, whiskey, mixers, and bubbly champagnes are available for order with delivery fees starting at $7.50. The owners both have strong business experience with Grevious coming from a finance and accounting background. The company CEO tapped into his past studies and previous work as an external auditor for Deloitte when putting together his business model, AfroTech reports. Pyles, QuikLiq’s president and chief strategy officer, graduated with a bachelor of arts degree in business administration with a concentration in supply chain management. His past roles include working as a luxury real estate broker at a Manhattan-based firm and managing a $400 million portfolio after relocating to Minneapolis. With QuikLiq on the market, you’ll be able to get your next Miami AirBnB turnup started off right.

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