THE NATIONAL WINE POLICY BULLETIN FEBRUARY 2014 There are a number of issues we are following on our members’ behalf, with talking points, as well as a round­up of state issues from around the country. Please feel free to contact us with your questions and concerns. FEDERAL Farm Bill: The Farm Bill was signed into law on February 7 after a two­year reauthorization process. Some of the highlights impacting the wine industry are: ● Specialty Crop Research Initiative – Mandatory funding is set for $80 million per year. For FY2014­2018, $25 million per year will be reserved to address emergency citrus greening research. Legislative language that addresses increased industry participation and prioritization for SCRI grant awards is included. ● Plant Pest and Disease Program – Includes mandatory funding of $62.5 million in FY 2014­2017 and $75 million in FY2018. Also includes a minimum of $5 million dedicated to the National Clean Plant Network. ● Specialty Crop Block Grants – Funding will include $72.5 million in FY 2014­2017 and $85 million in FY 2018. It also includes a multi­state program established and administered by USDA. The programs will focus on food safety, plant pest and disease, research, and crop­specific projects addressing common issues. ● Market Access Program (MAP) ­ Includes mandatory funding of $200 million per year, the same as the last Farm Bill. ● The Value Added Producer Grant program will receive $12.5 billion per year to assist farmers develop new markets. Country of Origin Labeling: The issue could come to a head this month when the WTO holds a hearing on the labeling rules. A decision against the current rules could affect other industries if Mexico or Canada responds by imposing tariffs on American meat and poultry or other goods imported into their countries. Canada has put American wine on the list of commodities they are looking to retaliate against if US rules are not amended. Immigration Reform: Odds of any kind of comprehensive immigration reform legislation passing this year are low. The House Republican leadership has said they will not take up the issue this year. It could be revisited in the new Congress next January. GMO: The Grocery Manufacturers Association and several other food and biotech groups went public Feb. 6 with their coalition to push Congress to introduce a federal bill that would preempt state laws on labeling genetically modified organisms in food. Rumors of a GMA bill to quash state GMO labeling initiatives have been circulating for months. In early January POLITICO reported on a leaked draft of a document that revealed the trade group is seeking a measure that would preempt state law, require the FDA to give pre­market approval to GMO ingredients, set up a program for companies to voluntarily label foods as GMO­free and include GMOs in the definition of "natural" on labels. According to Congressional Quarterly, several groups have joined GMA in its effort, including the National Council of Farm Cooperatives, the National Corn Growers Association, the American Soybean Association and the Biotechnology Industry Association. THE STATES NEW YORK At­Rest: Pending legislation in New York may force alcohol distributors to store their product in state warehouses 48 hours before a delivery. S 3849 in the Senate and A 5125 in the Assembly. The bill was sponsored by Senate co­leader Jeff Klein. Supporters, including Empire Wine Merchants, Southern Wine & Spirits and the Teamsters union, argue the bill would create more jobs in the warehouse stocking job market. Opposers are calling it a “cork tax.” Wine dealers, especially small distributors who store their products in cheaper New Jersey warehouses, are unhappy with the change and say the forced warehouse relocation would result in a 1 to 2 dollar raise per bottle cost for consumers. NORTHEAST Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Pennsylvania, Rhode Island, Vermont MARYLAND (Maryland Wineries Association) Funding: The Maryland Wineries Association is fighting to get $50,000 of funding from the state that was allocated, then absorbed back into the state budget before it got to the commission. Shipping: Bill S 287, back by Senator Zirkin, is in the legislature that would allow retailers to ship kosher wine to Maryland residents. There is also a bill that would pay liability on the server that over­served a customer. PENNSYLVANIA Privatization: Pennsylvania’s push to privatization is headed in a positive direction, says House Majority Leader Mike Turzai. Details over the legislation draft remains under wraps but proponents hope to see a finalized bill sometime early this year. Meanwhile, the Pennsylvania Liquor Control Board has replaced retired former CEO Joe Conti with John E. Metzger. SOUTHEAST Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia FLORIDA Beer & Spirits: Two bills in Florida pushed by craft breweries are under consideration by the Senate Regulatory Affairs Committee. The pair of bills push to allow breweries host free tastings and to sell 64­ounce reusable bottles known as growlers. While the former was passed, the latter was postponed due to a disagreement between craft breweries and distributors. Loopholes in the law would allow craft breweries to sell beer they did not manufacture at a disadvantage to distributors. Rep. Debbie Mayfield­R hopes to craft a new bill that will support breweries without upsetting distributors. GEORGIA Winery Licensing: The state Senate in Georgia recommended the continuation of existing policies of locally regulated alcoholic beverage tastings and brewpubs. Senate Bill 303 proposed by Sen. Burt Jones­R would allow dry cities and counties to appeal directly to election superintendent to hold a vote rather than gathering signatures. This would allow retailers to hold tastings and sell “growlers­to­go.” Wine Production: SB 286: Allows Georgia wineries to make fortified wine with an alcohol content of up to 24% ABV. Currently a percentage of 21% is the limit. The bill passed the Senate 48­5. TENNESSEE Retailer Licensing: An amendment to last year’s Senate Bill 837 in Tennessee will allow the sale of wine in supermarkets passed House, now awaiting Senate approval. This largely follows a plan put forward by the state House of Representatives earlier this week. If the Senate passes the bill, the governor has already said he would sign the bill. The bill was sponsored by state Senator Bill Ketron. Current law in Tennessee mandates that no beverage with an alcohol level higher than 6.5% can be sold in grocery stores. Wines, with an average alcohol level around the 13% mark, under law, must be sold in liquor stores. After seven years of debate, senators agreed to legislation that would let voters in 49 counties decide as soon as this November to determine whether to allow wine on their grocery store aisles. Local governments hold referendums on whether to let supermarkets, big­box retailers and convenience stores in their jurisdictions sell wine. But retailers would not be able to start selling wine until July 1, 2016, a transition period meant to give liquor stores time to adjust to the shift in Tennessee’s liquor laws. No Sunday sales and wines would be marked up 20% over wholesale. A second measure, House Bill 610, would establish procedures for local referendums on wine in grocery stores. A year ago, that bill was defeated by a single vote in the House Local Government Committee when Chairman Matthew Hill, R­Jonesborough, objected to its scope. On Tuesday, supporters stripped HB 610 to its bare essence and left out liquor regulations, now transferred to HB 47. The shift gave committee members cover to vote for wine referendums without embracing looser liquor laws outright. The few differences between the two versions favored grocery stores and their allies. One provision says stores need to be only 1,200 square feet to sell wine — a threshold that brings in more convenience stores. Analysts for the state legislature estimate that about 2,000 stores in Tennessee could try to sell wine under that standard. Another difference is the licensing fee grocery stores would have to pay annually to sell wine. The House version sets it at $2,000. The Senate would lower it to $850, the same amount liquor stores pay. Those differences could derail the legislation. But with the Senate version passing by a wide margin, backers said they are optimistic the House will approve a measure. Now that measure and HB 47 must go through the House Finance Committee. If they are approved there, the two bills could come up for votes on the House floor sometime in February. GREAT LAKES Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin MICHIGAN (Michigan Grape and Wine Industry Council) Retailer Licensing: BYOB Bill Signed by Governor Rick Snyder. HB 5046 amended Section 1021 of the Liquor Control Code of 1998 to authorize on premise licensees who wish to do so, to allow individuals to bring wine that was not purchased by the licensee into a licensed establishment for consumption. The law takes effect on March 1, 2014. The Michigan Department of Agriculture and Rural Development is working with the Michigan Liquor Control Commission to understand the Commission's interpretation of the law as it affects large events and trade events. MINNESOTA Retailer Licensing: Minnesota state Rep. Jennifer Loon is pushing for a bill that will allow liquor stores to decide whether or not they will remain open on Sundays. Currently, stores are not legally allowed to be open. Liquor store owners say they are unsure whether or not this will help their sales while Loon states that the bill is more about putting more control back into constituents’ hands. Beer & Spirits: A new bill in Minnesota proposes to repeal the state law that bans Sunday liquor sales and suggests allowing local municipalities to create their own rules.