Industry Alerts

Industry Alert #1: Is .05 BAC on the agenda for some?

It seems that we just cannot get a break...the neo-Prohibitionists are raising their heads again.....Because so many of us are tourism destinations, this is a major threat to our futures. If you are not a member of OWPA or WineAmerica, invest some of the savings you are enjoying from the Excise Tax Credit to fight this fight and join us.  

From the Academies of Sciences, Engineering and Medicine
Jan. 17, 2018
FOR IMMEDIATE RELEASE

[EXCERPTS from the release with a link to the entire piece below]

 "The committee that conducted the study and wrote the report recommended a number of actions, 

  • Lowering state laws criminalizing alcohol-impaired driving from 0.08 to 0.05 percent blood alcohol concentration (BAC)

  • Increasing alcohol taxes significantly

  • Strengthening policies to prevent illegal alcohol sales to people under 21 and to already-intoxicated adults

  • Enacting all-offender ignition interlock laws

  • Providing effective treatment for offenders when needed."

 "While getting to zero alcohol-impaired driving deaths sounds like an overly ambitious goal, it builds on the momentum of Vision Zero, an approach that recognizes that traffic-related fatalities are not just 'accidents,' but rather are embedded in a network of events and circumstances with causal links that can be averted," said committee chair Steven Teutsch, adjunct professor at UCLA Fielding School of Public Health, senior fellow at the Public Health Institute, and senior fellow at the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California.  "The plateauing fatality rates indicate that what has been done to decrease deaths from alcohol-impaired driving has been working but is no longer sufficient to reverse this growing public health problem.  Our report offers a comprehensive blueprint to reinvigorate commitment and calls for systematic implementation of policies, programs, and systems changes to renew progress and save lives."

Industry Alert #2: Tax credit a reality -- albeit it is temporary

FOR MORE THAN 2 YEARS, OWPA HAS BEENTALKING ABOUT WINEAMERICA'S WORK TO REDUCE YOUR FEDERAL TAX BURDEN.  This week it came to fruition.  We owe a huge debt of gratitude to our own Senator Rob Portman who introduced the amendment [first presented by Senator Wyden of Oregon] to the just passed tax reform legislation.  

Details below in a release sent just now by WineAmerica president Jim Trezise:  

WineAmerica Applauds Passage of Federal Alcohol Excise Tax Reform
December 20, 2017, Washington, DC

WineAmerica, the National Association of American Wineries, today hailed the passage of federal alcohol excise tax reform legislation as a new opportunity for growth of the American wine industry. 

The Tax Cuts and Jobs Act, which President Trump is expected to sign soon, includes key provisions of the Craft Beverage Modernization and Tax Reform Act that will reduce federal excise taxes on wine, beer, and spirits. 

WineAmerica and its beverage coalition partners enlisted 304 House and 55 Senate co-sponsors from both parties. "We are grateful to all legislative supporters, but particularly Senator Roy Blunt (R-MO) who led the majority support, Senator Rob Portman (R-OH) for adding our bill into the broader Senate legislation, and Senator Ron Wyden (D-OR) who was the original champion of the entire concept and the language," said WineAmerica President Jim Trezise. "On the House side, Representative Kevin Brady (R-TX) as Chairman of the Ways and Means Committee played a crucial role."

The bill will save all wineries, regardless of size, significant money through an excise tax credit mechanism which reduces the effective rate. For example, while the federal excise tax on table wine will remain unchanged at $1.07 per gallon 

  • There will be a new tax credit of $1.00 on the first 30,000 gallons produced, making the effective tax rate $0.07 (seven cents) per gallon. [editorial note by OWPA:  your  current 17 cents under the 1990 small producer exemption will be reduced to 7 cents per our  many prior discussions]

  • The tax credit on the next 100,000 gallons produced is $0.90

[OWPA editorial note:  your current 17 cents will remain per the 1990 small producer exemption]

  • Between 130,000 and 750,000 gallons produced the tax credit will be $0.535.

[OWPA editorial note:  for our largest wineries, this will save thousands, perhaps even tens of thousands .. and will encourage growth among our medium sized wineries]

  • The tax credit limits out at a ceiling of 750,000 gallons.

  • The legislation also increases the allowable alcohol level for table wine from 14% to 16%, reflecting the tangible impact of climate change on grape ripening in some states.

The federal excise tax provisions are programmed to expire on December 31, 2019, which means WineAmerica and its beverage coalition partners will need to work with Congress on making the new rates permanent. 

 WineAmerica's coalition consists of the American Craft Spirits Association, the Beer Institute, the Brewers Association, the Distilled Spirits Council, and the Wine Institute.

 "There are nearly 10,000 wineries across all 50 states, and the vast majority are small, family-owned farms and businesses, so this is a welcome development for growing our entire industry," said Trent Preszler, PhD, CEO of Bedell Cellars on Long Island and Chairman of the WineAmerica Board of Directors. "The excise tax savings will allow wineries to invest money back into their businesses in countless ways, whether that's hiring new employees, buying oak barrels, or planting vineyards. Ultimately, such investments will help American wineries be more competitive in the global marketplace."

WineAmerica recently unveiled a national economic impact study showing that the American wine industry generated a $220 billion benefit to the American economy in 2017, including 1.7 million jobs and $75.8 billion in wages. Of the total impact, $58.8  billion involved the "supplier" sector which includes goods and services like tractors and vineyard supplies; tanks and barrels; packaging and transportation; plus finance, insurance and real estate. Many of these sectors stand to benefit as wineries invest their savings from the tax reduction.

"We also thank WineAmerica Vice President Michael Kaiser and government affairs advisors Larry Meyers and Fran Boyd of Meyers & Associates for all their great work on this initiative," said Trezise. "WineAmerica specializes in national grassroots public policy advocacy involving our members from all around the country, and these are the people who bring it all together."

For more details about the actual Tax Cuts and Jobs Act and the Craft Beverage Modernization and Tax Reform Act, contact Michael Kaiser (mkaiser@wineamerica.org, 202-223-5172)

For more details about WineAmerica's national economic impact study, visit www.wineamerica.org/impact or email jimtrezise@wineamerica.org.

WineAmerica is the national voice the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 43 states and leads a coalition of state and regional wine and grape associations. As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

A collection of ideas garnered from the 2019 General sessions at the Unified Grape and Wine Symposium in Sacramento

Feb. 1, 2019

·         Cannabis is here to stay. Lots of wineries at least researching its use in wine products. It will remain illegal in some markets, but in CA, WA and CO, there is a major move in that direction. Also, market research is indicating it MAY depress wine sales: example: at a party or in a bar [where legal] millennials might drink 3 glasses of wine OR one joint and ONE glass of wine. [Remember the vast majority of the audience was from CA and the Northwest so, their attitudes toward pot may be more liberal than in the Midwest.] But it is something to watch.

·         Rose' is hot, hot: if you do not have a couple of versions [dry/sweet/even sparkling perhaps????] Pinot Gris and Sauvignon Blanc look to be fast movers too. Chardonnay is ever less 'oaky' but with the changes in federal law allowing 16% alcohol, the variations are ever more wide.

·         Millennials are all about 'blended' and flavored beverages and are embracing alternative packaging including cans. They are also MUCH more about 'experiences' vs. 'drinking' when they visit winery tasting rooms. See information from our tasting room visits also in this e mail in the side column [above, if reading from your phone.] They are all about internet sales. They like information in a fun, not stuffy format.

·         Craft beer is slowing while traditional beer continues its downward slide: spirits and wine are holding their positions. BUT: two items below

·         The growth of non-alcoholic drinks/flavored waters is exploding and may be preferred by a growing number of health conscious consumers in every age group.

·         Boomers are aging and will likely consume less wine so the time sis NOW to capture the coming generations before they move to other beverages, alcoholic or not.

·         There will be a glut of CA bulk wine on the market based on a bumper crop in 2018. It may depress prices somewhat.

FSMA Compliance inspections are coming [NOTE: make sure you plan to register for the Ohio Conference where the FSMA presentation will prepare you for compliance.]

Shiners illegal, a for profit business is NOT allowed to use volunteer labor, explanation of a ‘bar buy’ for in store sampling

May 25, 2019

WARNING......

In the last couple of weeks, our office has received a half dozen solicitations from brokers looking to sell 'SHINERS' [finished bottles of wine missing only a label]. I am not sure of the reason for the influx....but since there has been such a dramatic growth of wineries in the state, some of the newbees may not be aware that this practice is TOTALLY ILLEGAL in our state. You have a 'manufacturing' license -- so you must MAKE YOUR WINE.

Beyond that warning, at the 2019 Wine Conference we shared a bunch of other items of which you should be aware when you look at the limitations of your permit. Here are a couple for your review:

You may NOT use volunteers for your own winery, either at a festival, in your vineyard or in your tasting room as a for profit business. A charity or educational group can coordinate a group of volunteers and you may make a contribution to the charity [Federal Law] .

Do not do in-store pours unless the location has the appropriate license and you purchase your own wine at full retail plus tax from the location [‘bar buy’]. Under the bar buy law, you must give away the wine samples of 2 oz or less.

CALL IF YOU HAVE QUESTIONS...Remember though: OWPA does NOT provide legal advice...for that contact your legal counsel.

Federal Bond Requirements

June 10, 2019

Information from WineAmerica team in D.C.: 

1.  Question about the need to file a federal bond:

From WA:  If a winery paid less than $50,000 in federal excise taxes the previous calendar year a bond is not needed.

 

2.  Can a winery use 'For sale in Ohio only' on their label and avoid getting TTB/Federal approval? 

From WA: For Sale in OH only" means that it can only be sold IN Ohio, that means they can't ship it beyond Ohio's borders if ordered DTC via your web site or e mail.

Some issues of concern at SOME wineries under the jurisdictions of SOME health departments has arisen.  

July 7, 2019

The food rule requiring licensing for wineries is not new. When a business produces food to sell at the same locaton, the business must be licensed by the local health department. Ohio Rivesed Code 3717 provides for the liscensing by local health departments.

3717.21 states: Except as provided in section 3717.22 of the Revised Code, no person or government entity shall operate a retail food establishment without a license. A separate license is required for each retail food establishment that a person or government entity operates.

3717.41 states: Except as provided in section 3717.42 of the Revised Code, no person or government entity shall operate a food service operation a person or government entity operates.

The risk level of a business is based on the foods they prepare and offer for sale. If winery is producing wine and only offering it for sale at their winery they would be a risk level two operation.

If a winery wholesales wine, which means they sell the wine to others to offer for sale or they move it to another location to sell their wine, the production of the wine would be regulated by the Ohio Department of Agriculture, Division of Food Safety. A wholesale winery could qualify for an exemption for the retail sale of their wine if the can meet one of the following:

ORC 3717.22(B)

(12) An establishment that, with respect to offering food for sale, offers only alcoholic beverages or prepackaged beverages that are not potentially hazardous';

(13) An establishment that, with respect to offering food for sale, offers only alcoholic beverages, prepackaged beverages that are not potentially hazardous, or commercially prepackaged food that is not potentially hazardous, on the condition that the commercially prepackaged food is contained in displaces, the total space of which equals less than two hundred cubic feet on the premises of the establishment;

If a winery offers for sale more than is stated in the exemptions above, it must obtain a license from their local health department.

To further explain the type of retail food licenses identified above:

A retail food establishment is a premises or part of a premises where food is stored, processed, prepared, manufactured, or otherwise held or handled for retail sale (example would be a grocery store).

A food service operation is a place, location, site, or separate area where food is intended to be served in individual portions is prepared or served for a charge or required donation. As used in this division, “served” means a response made to an order for one or more individual portions of food in a form that is edible without washing, cooking, or additional preparation and “prepared” means any action that affects a food other than receiving or maintaining it at the temperaturw at which it was received (an example is a restaurant).

How Do I...Get a UPC Bar Code?

 Aug. 22, 2019

Small businesses seeking to sell their wares through larger retailers for resale will most likely need a Universal Product Code -- that ubiquitous black and white striped identification tag appearing on products ranging from soda cans, tags on stuffed animals or boxes containing electronics.

The identification numbers allow a retailer to easily track sales of a product in its inventory system and can be used most anywhere in the world. Although books and magazines require a different coding system.

The numbers inside a bar code are known as GS1 identification keys, and they are only assigned by GS1, a nonprofit group that sets standards for global commerce. The U.S. branch is in Dayton, Ohio.

To obtain a UPC, you first must become a GS1 member and pay a fee to the global standards-setting body. It's not cheap. Membership will cost at least $750 for the initial fee and then there's an annual fee of at least $150. GS1 calculates member fees based on annual revenue and on the number of unique products the member sells. The GS1 (formerly known as the Uniform Code Council) says once a firm completes a membership application, it takes up to five days to process it.

When a company becomes a member, it's assigned an identification number that is globally unique and reserved just for use by that company. That number enables a firm to create its own identification code. A company needs a different UPC code for each type of product it sells. Each bar code reflects a product's weight, cost, size, etc. For example, a 12 oz. can of Coke has a different UPC than a 16 oz. can or a 2 liter bottle.

All retailers scanning merchandise at a checkout counter require a business to label its merchandise with a bar code. If a business simply wants to use bar codes on its products for internal use like inventory or tracking and doesn't plan to sell its products to retailers for resale, it doesn't need a number from GS1.

A UPC can be printed with a special printer and attached to the item for sale or its packaging, like a box containing a television, or made a part of a product's package design like a package of gum.

There are plenty of bar code software and hardware available. A cost effective option is to purchase a thermal label-maker that prints basic bar codes for about $100 from any large office supply retailer.

 

*As with any recommendations from any source other than your lawyer, the it is your responsibility to check [OWPA has lots of info here, but we are NOT a legal office nor are there times when we might have dated information} to make sure your business is doing things correctly......