Tuesday, July 7, 2020 www.nabca.org

TODAY’S HIGHLIGHTS

• Cap on Direct Sales at Craft Breweries Removed by New Law • Texas Restaurants Can Now Sell Already-Mixed Drinks to Go • Lack of regulation leaves door open to harmful digital marketing of alcohol • What Beer Sales Tell Us About the Recession • WSWA Issues Guidance for Smart and Responsible Alcohol Delivery Regulation

NABCA News

NABCA launches a COVID-19 Resource page. It includes interactive dashboards which includes state actions to lessen the spread of COVID-19 and policy changes that effect on- and off-premise retail operations, as well as additional information. Visit NABCA’s website for more information

TTB NEWS

NEW COVID-19 PAGE ON TTB.GOV You can now find all TTB’s COVID-19-related news and guidance in a single location. Check the page frequently to find new or updated information to help you and your business respond to the COVID-19 national emergency. https://www.ttb.gov/coronavirus

NABCA WEBINAR

Women. Alcohol. Health. - From Blackouts to Breast Cancer. webinar is now available on our website. www.nabca.org/Resources/Webinars

UPCOMING MEETINGS

Beverage Alcohol Retailers Conference September 14-16, Austin, TX, Sheraton Capitol Click here for more details

ADDITIONAL LINKS

Visit NABCA’s website for information on:

• Control State Agency Information • Doing Business in Control States • NABCA News

CONTROL STATE NEWS

UT: Utah lawmakers push to allow beer delivery, curbside pickup during pandemic

KUTV 2 by McKenzie Stauffer, Arielle Harrison July 6, 2020

(KUTV) — Two lawmakers are calling on Gov. Gary Herbert to allow curbside pickup and deliveries for alcoholic beverages to help protect Utahns from the novel coronavirus.

Minority Caucus Manager Sen. Derek Kitchen and Rep. Joel Briscoe, D-Salt Lake City, sent a letter to Herbert on Thursday, July 3, requesting the change.

"The meaningful policy response and direction from the state and other levels of government must carry on and adapt to this unprecedented crisis to keep individuals and families as safe as possible," the letter states.

Under current Utah law, alcohol purchases must be made inside a store. Home delivery of beer is also not allowed.

The lawmakers argue that curbside pickup and delivery have been used to keep Utahns safe and stop the spread of COVID-19.

"I urge you to act immediately and temporarily suspend statues to allow consumers to purchase alcoholic beverages, that are available at grocery stores, through curbside pickup orders and home delivery," the letter states.

Briscoe posted on Twitter explaining his reasoning for supporting the change.

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"A constituent contacted [Kitchen] and me explaining that at 85 years of age he appreciated having his groceries delivered," he wrote. "Why not his beer? We want older Utahns to stay home if they can. Let's help them."

Other states, including breweries in North Carolina, have offered curbside beer sales after businesses and restaurants were forced to close in mid-March.

Utah restaurants and businesses have also offered the same services during the pandemic--to help keep people safe and keep companies afloat.

Quarters Arcade Bar in Salt Lake City posted on Twitter Friday asking for Herbert to allow to-go beer and cocktail orders.

"This is a pro-business move that will help small business and preserve jobs," the post stated.

Currently, alcohol deliveries are not allowed, except for wine subscriptions or clubs as stated in H.B. 157, which was signed by Herbert during this year's legislative session.

The bill, sponsored by Rep. Michael McKell, R-Spanish Fork, amended the Alcoholic Beverage Control Act to establish a wine subscription program, which sends the product to the Utah Department of Alcoholic Beverage Control and not directly to the consumer.

OR: Oregon OSHA to Enforce Statewide Face Coverings Rule

Lexology By Davis Wright Tremaine LLP July 6, 2020

Starting July 1, 2020, all Oregonians over age 12 are required to wear a face covering in public indoor spaces and certain businesses to slow the spread of COVID-19 in the state. According to Governor Kate Brown, the state’s first approach has been to educate and inform businesses and the public of the requirement.

However, Governor Brown stated that she is stepping up enforcement for face coverings, social distancing, and gathering size limits for businesses statewide led by the Oregon Occupational Safety and Health (commonly known as Oregon OSHA) and the Oregon Liquor Control Commission. The agencies

reportedly performed spot checks and inspections over the holiday weekend.

Businesses can be cited for failing to enforce the face-covering mandate with customers, employees, and visitors. Violators can be subject to fines, citations or, in some cases, closures. Washington and Clackamas counties are circulating e-mail addresses for anyone to report businesses that are not complying with the requirement while Multnomah County is referring people directly to Oregon OSHA.

Oregon businesses should review their COVID-19 plans to make sure they adequately enforce face-covering requirements. Remember, complaints that a business is not following the rules can be submitted by employees or members of the public. Oregon OSHA has issued an advisory memo outlining best practices for businesses to enforce the statewide face-covering mandate.

Oregon businesses should also comply with all other requirements applicable to their business to protect against the spread of COVID-19, including social-distancing, face-covering, and PPE requirements. The Oregon Health Authority and Oregon OSHA provide more information and resources on the requirements that may apply to your business.

Businesses failing to enforce the face-covering requirement could be cited by a masked Oregon OSHA inspector. Oregon OSHA citations normally require prompt corrective action under the threat of additional daily penalties for non-compliance. Since early March, Oregon OSHA has received approximately 5,500 complaints related to workplace COVID-19 protections. The agency has performed 42 COVID-19 workplace inspections and issued citations in half of those inspections.

MS: Cap On Direct Sales at Craft Breweries Removed by New Law

The Northside Sun By Steve Wilson July 6, 2020

Buying a six pack of beer directly from one of Mississippi’s craft breweries just got a lot easier after Gov. Tate Reeves signed a bill into law.

Senate Bill 2552 will remove the prohibition on the amount of beer that can be sold directly to consumers at craft breweries. Right now, brewers

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are limited to selling either 10 percent of the beer produced there or 1,500 barrels, whichever is the lesser amount. The new law, which is now in effect after being signed by Reeves on June 23, eliminates this sales cap.

Under present regulations, brewers have to sell their wares to the public through a wholesale distributor unless those sales were conducted to those visiting their brewery. Once a brewery exceeded the cap, it could no longer sell beer to visitors at the brewery.

Two years have passed since Mississippi legislators passed a law that allowed craft brewers the ability to sell their products to visitors to their breweries. The state has 14 craft breweries and brewpubs at present, but several have ceased operating such as Lucky Town (Jackson) and Slowboat (Hattiesburg).

According to the Brewers’ Association, a national trade organization for craft breweries, Mississippi has the lowest number of craft breweries per 100,000 adults age 21 or older. The 14 breweries statewide produced 25,257 barrels of beer (ranked 48th nationally) with a $328 million economic impact, 43rd worst nationally.

The state has made steady progress in the last decade to provide more freedom to the alcohol industry in the state. In 2012, a new law allowed the sale of high-gravity beer with an alcohol content of more than 5 percent, with a maximum content of 8 percent. This allows longer shelf life for beer.

Passage of this legislation opened the door for the expansion of the state's craft brewing industry. In 2013, the state legalized homebrewing as one of the last states to do so.

This session was much like previous sessions, where the Legislature prefers small incremental changes to alcohol policy. While SB 2552 passed, the vast majority of alcohol-related legislation either was passed in a vastly-watered down form or didn’t receive a floor vote.

Two bills that would’ve allowed direct sales of wine from out-of-state wineries to Mississippi consumers — House Bill 988 and SB 2844 — died in committee without a floor vote. Mississippi is one of five states that refuse to allow direct shipments to consumers.

Instead, the Legislature passed HB 1088, which allows individuals to purchase wine from an out-of-state winery and have it shipped to a package store.

The bill is similar to federal law regarding the purchase of firearms online, which requires them to be shipped to a holder of a federal firearms licensed dealer

Another bill that died was HB 4, which would’ve increased the number of package store permits that one person can own from one to three. It passed the House and died in the Senate without a floor vote thanks to heavy lobbying by the package store owner’s association, the Mississippi Hospitality Beverage Association.

There are 600 permits issued for package stores in the state and 2,000 permits for restaurants and bars statewide, according to the state Department of Revenue.

Mississippi is a control state, which means the state controls the distribution of wine and spirits. Even wine and liquor manufactured in-state has to go to the state’s warehouse in Gluckstadt before they can be shipped out to package stores, restaurants and bars statewide.

HB 1086 would’ve formed a public/private partnership, much like the Mississippi Lottery Corporation, to manage the state’s alcohol distribution warehouse in Gluckstadt. Instead, the Legislature passed SB 2807 that creates a committee to study transitioning the warehouse to a state-chartered corporation. The committee will have 13 members of the Legislature.

LICENSE STATE NEWS

TX: Texas Restaurants Can Now Sell Already-Mixed Drinks To Go

Houston on the Cheap Posted by Suad Othman July 6, 2020

Ever wondered when the day would come when we’d be able to get mixed drinks to go? Well, that day has come thanks to Texas Governor Greg Abbott.

Restaurants and bars in Texas finally got some positive news recently. They’ll be able to sell already-mixed drinks to go starting immediately rather than just the takeout cocktail kits they had been allowed to sell up to this point. This welcomed change will greatly contribute in providing some needed revenue to the suffering industry.

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The Texas Restaurant Association and the Texas Alcoholic Beverage Commission made an announcement last week stating that Gov. Greg Abbott has extended the alcohol-to-go waiver. This will allow for cocktails along with food take-out and delivery orders.

This new announcement comes just one day after Gov. Greg Abbott declared significant setbacks for Texas restaurants and bars. This is referring to the capacity limit returning to 50 percent beginning on June 29. A decrease from the 75 percent that was in effect since June 12.

In an effort to stop the surge of COVID-19 cases in Texas, Abbott also shut down all bars about a week ago.

According to Abbott’s waiver, restaurants and bars with a mixed beverage permit will now be allowed to sell mixed drinks to go. Selling mixed drinks to go prior to this was prohibited. Only kits to make cocktails that came in the original packaging of the manufacturer could sold.

“It’s a huge win. It’s a great day for restaurants,” said Emily Williams Knight, president and CEO of the restaurant association that lobbied for the expanded waiver. “As dining rooms slow and decrease capacity, this brings in revenue which is what restaurants need more than anything right now. This isn’t going to save the rest industry but it’s certainly giving us a lifeline.”

The TABC also commented on Abbott’s waiver calling it a win, “Operating during this pandemic has proved an incredible challenge for all segments of the alcoholic beverage industry,” said Bentley Nettles, TABC executive director. “Opening up the ability for these businesses to sell mixed drinks to go will help ease the burden for many of these struggling businesses.”

Under the guidelines of the new order, restaurants must mix the drinks on-site and seal the mixed drink with an adhesive label stating, “alcoholic beverage.” Then the sealed drink must be placed in a sealed bag with a zip tie.

Some other things to take note of are that mixed drinks cannot be placed in the passenger area of a vehicle and alcohol must be ordered with food.

FL: Florida Restricts Sale of Alcohol Due to Surge in COVID-19 Cases Among Young Adults

JDSupra Written By: Ogletree, Deakins, Nash, Smoak & Stewart, P.C. July 6, 2020

On June 26, 2020, the Florida Department of Business and Professional Regulation (DBPR) issued Emergency Order 2020-09 suspending the sale of alcoholic beverages for on-premises consumption at all businesses that “derive more than 50 [percent] of gross revenue from such sales.” The DBPR issued the order due in part to a spike in the number of individuals who have tested positive for COVID-19 in June 2020, especially among younger people who may have been visiting bars, pubs, and nightclubs where alcohol is served and such establishments failing to comply with orders on occupancy restrictions. The emergency order went into effect immediately upon filing.

Notwithstanding the suspension of sales for on-premises consumption, businesses may continue to sell alcoholic beverages in sealed containers for consumption off the premises in accordance with Executive Order 20-71, issued by Governor Ron DeSantis on March 20, 2020. In addition, businesses licensed as public food service establishments or restaurants “may continue to operate for on-premises consumption of food and beverages at tables pursuant to the restrictions in Executive Order 20-139.” These establishments may continue to operate “so long as [they] derive 50 [percent] or less of gross revenue from the sale of alcoholic beverages for on-premises consumption.”

Emergency Order 2020-09 comes just three weeks after Governor Ron DeSantis issued Executive Order 20-139 on June 3, 2020, initiating Phase 2 of the “Safe. Smart. Step-by-Step. Plan for Florida’s Recovery.” Under Phase 2 of the state’s recovery plan, restaurants, bars, and other businesses that are licensed to sell alcoholic drinks for consumption on the premises were allowed to operate at 50 percent of their indoor capacity. In addition, outdoor seating was permissible with appropriate social distancing. Phase 2 did not allow for the reopening of nightclubs. In Executive Order 20-139, Governor DeSantis directed the DBPR to enforce the restrictions included in the order.

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Notably, Florida is not the only state to take such drastic measures in response to the rapid increase in the numbers of people testing positive for COVID-19. At least two other states, Texas and California, have issued similar orders.

INTERNATIONAL NEWS

South Africa: Sit-down restaurants propose a solution to allow for alcohol consumption

Business Tech Staff Writer July 6, 2020

Last week saw restaurant reopen for sit-down customers in South Africa, having being closed for three months due to lockdown.

Lobby group, the Restaurant Collective (R|C), said that while this is cause for some celebration, many owners remain sceptical about their ability to turn any profits – or pay off huge debts accumulated in the last few months – given the restriction on alcohol consumption.

Under enhanced level 3 lockdown, alcohol can be bought on premises, but may only be consumed at home.

“There are no countries in the world that have opened sit-down restaurants without alcohol,” R|C said. “Eating out for many is time out. Where people want to catch up, spoil themselves and enjoy an eating experience that is not possible to have at home.

“Part of going out to a restaurant to eat is the entire consumer experience and alcohol plays an integral part in that experience.”

The R|C noted that many sit-down restaurants are simply not sustainable without the sale of alcohol; a vital profit centre, with up to 70% of profit coming from these sales.

The group conducted research among its sit-down restaurant members a week after re-opening. It found that most (76.5%) are massively down for the year.

More than half (55%) of respondents have cut their staff complement by more than 50%, and around a third (30%) of respondents have cut their staff complement by less than half.

A third (32%) of restaurant owners feel disheartened about the future, while 37% are uncertain about the future.

Three quarters of respondents said that customers are patient and happy with the current protocols.

There is a solution

R|C said that while there may be concerns for ‘pubs’ and the current serving of alcohol, sit-down restaurants are well suited to continue serving alcohol.

“We ask that sit-down dining establishments that already have ‘On Consumption’ liquor licenses be allowed to serve alcohol – with reasonable regulations,” it said.

These sit-down restaurants would agree to limited hours for the sale of alcohol – between 12h30 and 21h00 is suggested – and all alcohol sales would have to be accompanied by meal orders.

Alcohol sales would also be limited to beer and wine only as these are the drinks most commonly paired with food, it said.

“To stimulate the sector and save jobs and entrepreneurial businesses, we need to enable these establishments to make a profit once again in a flagging economy. Restricting the sale of alcohol will only further hamper the success of these small businesses,” the lobby group stressed.

It said that hygiene standards are already in place at these restaurants and good social distancing protocols are being practiced. Reduced menus are in place and QR codes and online menus being used to facilitate social-distancing.

In short, any establishment that primarily sells food can serve alcohol with the following guidelines:

• Alcoholic beverages to be sold between 12h30 and 21h00 only with meals;

• No drinks to be served after the meal;

• No standing allowed and bar counters to be off limits;

• No alcohol promotions/special events/offers;

• No loud music and dancing;

• Beer and wine sales only.

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Europe: Lack of regulation leaves door open to harmful digital marketing of alcohol

World Health Organizatin | Europe July 7, 2020

Alcohol marketing is actively exploring the unregulated territories of social media

According to a newly published report, “Alcohol marketing in the WHO European Region”, alcohol marketing is adapting to new realities faster than current legal regulations across the Region, with industry using opportunities offered by digital platforms to sell their products in a largely unregulated market. The publication explains how innovative online advertisement techniques can target consumers precisely to promote drinking. This includes children and adolescents.

Approximately US$ 1 trillion is spent on alcohol advertising globally each year, with an ever-increasing number of promotional campaigns in online media. At the same time, according to the latest WHO data, less than a quarter of all Member States of the Region have at least some marketing bans for the internet. Even fewer countries have implemented similar restrictions for social media, despite bans or comprehensive restrictions of alcohol advertising being among the most cost-effective measures to reduce alcohol consumption and associated harms.

This situation needs to be changed, given that drinking levels in the Region are the world’s highest. In 2016, every 10th death in the Region was attributed to alcohol. It is not only a leading risk factor for noncommunicable diseases like cancer and heart conditions, but also contributes to a considerable number of infectious diseases, mental health issues, road traffic crashes, injuries, violent incidents and crimes. The association between exposure to alcohol marketing and levels of alcohol consumption and harm is well established, and this new WHO publication explains how countries of the Region can tackle the impact of evolving advertising techniques on people’s health.

Turning users into promoters

The last decade has seen a boom in online marketing technologies. Alcohol marketing is actively exploring the new grounds of the internet and social media, given that the existing legislation and rules for online

platforms are vaguely formulated all over the Region.

According to the WHO report, the nature of social media communities has implications for the cultural acceptance of alcohol, especially among youth. New social media marketing interacts and engages, encouraging consumers to like posts, reply to questions, tag their friends and even generate their own content that serves the same promotional goals. In other words, social media users can unknowingly act as promoters themselves.

Alcohol marketing has become a global and multifactor issue. Today, it transcends borders and uses the diverse digital landscape to spread its messages. Online promotion techniques can even reach consumers in regions where alcohol-related content is prohibited by national law. The global scope of alcohol marketing, with blurred boundaries between advertiser and consumer, requires a broadening of the scope of marketing regulation and an update of current legislation, advises the WHO report.

Regulating alcohol marketing: what can the European Region do?

Although most countries of the Region have some form of marketing regulation, very few have statutory bans that prohibit or at least limit the marketing of alcoholic beverages by law. In contrast with the work on tobacco control, there has not been an international or regional framework instrument with guidelines for implementation to underlay and support initiatives to regulate alcohol advertisement and promotion, including digital marketing. This is important since the available evidence suggests that self-regulation has no meaningful impact on public health and that investment in digital platforms has increased, targeting new consumers.

Existing regulation across the Region applies for the most part to traditional channels of marketing, such as advertising on television, radio and print media. It also remains largely fragmented, for instance prohibiting one type of alcoholic beverages for a certain media type, while not regulating others. Online marketing of alcohol is by far the least-regulated field, although a considerable shift has taken place from traditional channels to the digital landscape.

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The Region has opportunities to implement comprehensive, statutory regulations restricting or banning alcohol marketing to protect consumers and stop normalization of drinking behaviour for future generations.

Increased awareness of the extensive challenges posed by online marketing, and political commitment to deal with them, are needed more than ever. Digital marketing should be included in regulatory frameworks – as thousands of posts and videos are published on a multitude of platforms daily. There is an urgent need to develop a protocol to help distinguish native advertising, user-generated content and other commercial messages that may be difficult to understand or interpret, especially by younger consumers.

The positive side of global alcohol marketing campaigns is that they can unite countries. The Member States of the WHO European Region share common interests in producing knowledge and effective controls that can serve public health work across borders.

The “Alcohol marketing in the WHO European Region” update report has been prepared by WHO/Europe’s Alcohol and Illicit Drugs Programme and the WHO European Office for the Prevention and Control of Noncommunicable Diseases.

PUBLIC HEALTH NEWS

Multiple brands of hand sanitizer recalled or should be avoided due to methanol risk, FDA says. See the list.

USA Today By Kelly Tyko July 6, 2020

More than a dozen kinds of hand sanitizer should be avoided because they may contain methanol, a toxic substance when absorbed through skin or ingested.

The Food and Drug Administration says many of the products have been voluntarily recalled with other products being recommended for recalls because they may contain the potentially fatal ingredient. All of the products in the FDA's latest methanol update were produced in Mexico.

The FDA says it has "seen a sharp increase in hand sanitizer products that are labeled to contain ethanol

(also known as ethyl alcohol) but that have tested positive for methanol contamination."

The recalls come after the FDA warned consumers in June not to use nine kinds of hand sanitizers because they may contain the potentially fatal ingredient.

"Methanol is not an acceptable active ingredient for hand sanitizers and must not be used due to its toxic effects," the FDA said, noting its investigation of methanol in certain hand sanitizers is ongoing.

Methanol is used industrially as a solvent, pesticide and alternative fuel source, according to the Centers for Disease Control and Prevention. Exposure to it can cause nausea, vomiting, headache, blurred vision, permanent blindness, seizures, coma, permanent damage to the nervous system and death.

INDUSTRY NEWS

What Beer Sales Tell Us About The Recession

NPR By Greg Rosalsky July 7, 2020

Craft beer sales are surging at stores, but craft breweries are still struggling. Cheap beer is surging, but it's still losing market share. That's because the economics of the beer business are complicated. (And that's before you start drinking). But the beer business can tell us a lot about the last two recessions.

Take Natty Light (Seriously, take it, we don't want it). Natty Light falls into a category that the beer biz calls "sub-premium" — a category filled mostly with beer that closely resembles water. After over a decade of decline, the pandemic has pushed sub-premium beer sales up big time. According to data from IRI, a market research company, store sales are up over 11% as compared to the same time period last year (early March to late June). This surge has happened *despite* the shutdown of colleges, frat parties, and beer pong.

Sub-premium beer tends to be lower in calories and sold in bulk, which probably helps in the COVID era. But when we first read reports of the surge of cheap beer, we thought it was mainly a sign that consumers were tightening their belts in the face of the economic collapse. Economists use the term

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"inferior goods" to describe products that sell well when people lose income. During recessions, cash-strapped consumers flock to cheap stuff like instant ramen noodles, used cars, or Netflix instead of going out to the movies. This has also, to some extent, been historically the case for lower-priced beer, wine, and spirits, says Patrick Livingston, an analyst at IRI. "But what's interesting about this current period is that we have really not seen that effect set in," he says.

Previous reports — for example, the article "Consumers Switch To Cheaper, Lighter Beer During COVID-19"— have missed that while cheap beer sales are up, overall beer sales are up even more. There's been a 27.5% increase of beer sales in stores over the same period last year. And so while lower-priced beer has seen a surge, it's actually been losing market share, according to IRI's data. Sub-premium beer is lagging behind imports, which are up 15%, and craft beer, which is up almost 23%. Cheap beer is also lagging way behind "hard seltzer," like White Claw, which is relatively expensive and has seen a 246.7% increase when compared to this time last year. All these surges in purchases of more expensive beverages are a part of a trend beer biz folks refer to as "premiumization."

"If anything, the premiumization trends we've seen within the beer market have strengthened during recent months," says Bart Watson, the chief economist at the Brewers Association, a national non-profit trade association for small and independent craft breweries. (Yes, the Brewers Association has a chief economist, and Watson acknowledges his job is cool as hell).

Beer tends to be fairly recession resistant. In fact, according to IRI data, the trend toward premiumization began in the last recession and has continued to be the dominant driver of beer sales ever since. Watson says that craft and other expensive beer tends to be somewhat insulated from economic downturns because of who tends to buy it: young professionals with good jobs and cash to burn. "You know, we didn't really see craft or imports or super premium lose share in the last recession," he says. That's because, he says, the recession didn't inflict as much pain on the class of people who tend to drink Session IPAs, artisanal Porters, Belgian Lambics, and Saison Pale Ales. Likewise, in this recession, craft beer drinkers are more likely to have

the luxury of working remotely, keeping their jobs, and spending a few extra bucks on beverages with flavor.

Yet, craft breweries are still struggling. The surge of beer sales in stores is driven by the shutdown of bars, restaurants, clubs, and sporting venues. And while craft beer might still be doing well in stores, craft breweries, Watson says, get about 40% of their sales from draft beer — and with bars, restaurants, and their breweries closed, the kegs haven't been flowing. Corporate breweries, meanwhile, "get more like 10% of their revenue from draft beer" and only about 20% from drinking in bars, restaurants, and other public venues, Watson says. "So the shutdown has hit the smallest brews the hardest."

If the recession continues, job losses become permanent, and unemployment benefits expire, Watson says, it's possible that we'll see more craft brew drinkers opt for cheaper options at the store. Craft brew was already seeing signs of a slow down before COVID hit. But, he says, given the type of consumer who tends to drink craft beer, he has a hard time seeing a huge change in consumption habits. "I mean, it's hard to imagine somebody who loves to drink IPA suddenly saying, 'I'm going to save money by going to Busch Light.'" But, given craft breweries are largely dependent on people hitting the town, that only helps them so much during the pandemic.

DAILY NEWS

Scholarships launched for people of colour within the US brewing and distilling industries

Imbibe By Jacopo Mazzeo July 7, 2020

Renowned Brooklyn Brewery brewmaster Garrett Oliver announced the formation of the Michael Jackson Foundation for Brewing and Distilling (MJF) to help people of colour in, or who wish to join, the brewing and distilling industries

The MJF will be helping ‘predominantly people of colour’ by funding scholarship awards to ‘directly fund a more equitable and dynamic future for brewing and distilling’, Oliver said on Twitter yesterday (6 July).

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Specifically, the scholarships are aimed at funding brewing and distilling education – beginning or ongoing – for black, indigenous, and people of colour (BIPOC). ‘Each scholarship granted to a student,’ added Oliver, ‘will be matched with a BIPOC mentor and/or peer within the industry.’

The foundation has been named after Michael James Jackson (1942-2007), ‘the world’s greatest beer and whisky writer’, whose writing has played a key role in the birth of the craft beer movement. ‘Michael was English, but he was also actively and profoundly anti-racist,’ said Oliver.

The brewing scholarship is the Sir Geoff Palmer Scholarship Award for Brewing, after Geoff Palmer, professor emeritus of Edinburgh's Heriot-Watt University who became the first black professor in Scotland and who has ‘also been one of the most prominent civil rights authors and activists in the UK for decades’.

Meanwhile, the distilling scholarship will be the Nathan Green Scholarship for Distilling. Nathan Green (1820-1890?) was born enslaved, and was the ‘original distiller for Jack Daniel's Tennessee Whiskey. [He] taught founder Jack Daniel how to distil using his distinctive techniques... and is properly credited as Jack Daniel's original Master Distiller.’

Funds for the scholarships will be accepted as of 15 July. For those interested in contributing, more information on how to submit funds will be released soon.

WSWA Issues Guidance for Smart And Responsible Alcohol Delivery Regulation "WSWA advocates for local delivery from beverage alcohol licensees, with delivery executed by their employee or a licensed third-party delivery company"

WSWA July 6, 2020

In the wake of an increased need to meet consumer demand for doorstep convenience, states and localities are expanding delivery to different channels. The Wine & Spirits Wholesalers of America (WSWA) offers guidelines to policy makers in order to promote smart and responsible practices. Today, WSWA issued the following public position statement on delivery:

WSWA advocates for local delivery from beverage alcohol licensees, with delivery executed by their employee or a licensed third-party delivery company. The delivery person must conduct legal drinking age verification and provide beverages in safe, sealed containers with proper labeling.

"Convenience and compliance can and should coexist," said WSWA CEO and President Michelle Korsmo. "The COVID-19 pandemic created a stay-at-home environment in the U.S. that prompted consumers to minimize public contact and seek "doorstep" convenience for virtually everything, including alcohol. Minimizing contact can create unintended consequences and WSWA is offering guidance to be helpful to the policy makers who want to meet the needs of today's shifting alcohol marketplace while maintaining the public health and safety standards of the current alcohol supply chain."

Prior to the COVID-19 pandemic, alcohol delivery sales were allowed in 33 states throughout the U.S. by local, off-premise retailers, often in partnership with ecommerce platforms like Drizly. After only one month of sheltering in place, 45 states plus Washington, D.C. expanded alcohol delivery permissions to include on-premise retailers like restaurants. Some states allowed on-premise businesses to offer pre- mixed cocktails in addition to beer, wine and spirits for delivery to consumers and ecommerce platforms like Drizly saw as much as a 400 percent increase in traffic.

As policymakers start to address this issue, WSWA has developed detailed guidance to help state regulators navigate smart and responsible alcohol regulations. Key features of that guidance are offered below:

Smart and responsible delivery regulations provide consumers with convenience from local retailers within their community. This may include language that stipulates deliveries must be made the "same day" product leaves a local retailer or include specific geographic perimeters.

Smart and responsible delivery regulations only allow for delivery by licensed retailers or licensed third-party delivery partners. Smart regulation should include provisions that ensure licensed retailers can:

• Verify that the recipient of the delivery is of legal drinking age;

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• Gather the signature of every legal delivery recipient;

• Consider the totality of the circumstances of the delivery and use reasonable judgement before handing over the product (ex. not complete the delivery if there are minors drinking in the house or the recipient is already intoxicated).

Smart and responsible delivery regulations should provide clear definitions of both alcohol delivery and shipping. WSWA is opposed to the shipment of alcohol across state lines and defines shipping as moving alcohol from an off-premise retail store to a consumer by common carriers such as FedEx, UPS, DHL and GSO. Delivery should be local and licensed.

Regulators interested in learning more about safe and responsible alcohol delivery policy guidelines can contact a member of the WSWA State Affairs Team.

Brewers Association Hires Marc Sorini as General Counsel

Brewbound By Jessica Infante July 6, 2020

After 20 years leading McDermott, Will & Emery’s alcohol regulatory and distribution group, Marc Sorini is joining the Brewers Association as general counsel.

“This to me is an opportunity to really focus myself on the Brewers Association, small brewer issues,” Sorini told Brewbound. “It feels like coming home for me; I got into my alcohol practice because of my love of what were then called micro brewers — that’s how much of a dinosaur I am — and so this really feels like just coming home and a perfect way to have a new adventure in my career.”

McDermott, Will & Emery announced in October it had hired Alva Mather to succeed Sorini as head of the alcohol regulatory and distribution group after his retirement. A press release said then that Sorini “plans to remain a friend and fan of the firm as he pursues new adventures.”

Sorini’s hiring comes after two rounds of layoffs at the BA, which has floundered financially after the COVID-19 pandemic forced it to cancel all of its in-person events in 2020. Events accounted for nearly

60% of the BA’s revenue, with member dues, advertising and sponsorships, and book and merchandise sales rounding out the rest.

The BA spent $426,669 on legal fees in 2019, according to the organization’s 2019 stewardship report; the bulk of this was for Sorini’s services, which will now move in house.

“For approximately the same expenditure, having Marc on staff will allow the BA to greatly increase their capacity and abilities to promote and protect small and independent brewers,” a BA spokesperson told Brewbound in an email.

If Sorini approaches that figure, it would make him among the highest paid employees of the BA. BA president and CEO Bob Pease earned $341,950 in 2018, plus $44,370 in “other compensation from the organization and related organizations,” according to filings.

National Beer Wholesalers Association president and CEO Craig Purser’s salary was $1 million with an additional $285,406 in added compensation, according to 2018 filings. Jim McGreevy’s total compensation as president and CEO of the Beer Institute was $648,341, with a base salary of $456,315, according to 2018 filings.

BA senior staff also took pay cuts during the pandemic. Requests for details about salary cuts were not returned as of press time.

The pandemic has proven to be a once-in-a-generation event for brewers and guilds at every level the industry: Thriving taproom breweries saw their draft sales dry up virtually overnight with the closure of on-premise service; bans on large public gatherings indefinitely canceled festivals, normally reliable fundraisers for guilds, and professional sports games, draft sales behemoths for domestic brewers. Booming off-premise retail sales can’t make up for lost sales at bars and restaurants. Although local craft breweries have pivoted to offer to-go sales in the form of curbside pickup and home delivery, those sales aren’t enough to offset the loss of high margin pours in own-premise establishments, as well as draft sales in bars and restaurants.

As craft breweries navigate this crisis, Sorini said the most pressing issues that offer the best hope for survival include passing the Craft Beverage

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Modernization and Tax Reform Act (CBMTRA) and relief for brewers who have had to dump barrels upon barrels of unsellable beer after bars, restaurants and other venues were forced to close.

“Passing CBMTRA, whether that’s an extension or making it permanent, which of course would be preferable, is federal legislative priority No. 1,” Sorini said.

CBMTRA set federal excise tax on beer at $3.50 per barrel on the first 60,000 barrels for brewers making fewer than 2 million barrels annually and $7 per barrel for any volume beyond 60,000 barrels. Brewers making more than 2 million barrels annually pay $16 per barrel on the first 6 million barrels and $18 per barrel after that.

These rates are scheduled to sunset at the end of 2020, after an extension of CBMTRA was signed into law in December 2019. The BA has estimated that CBMTRA has saved its members $80 million in taxes.

“That is going to be critical to either pass or at least extend,” Sorini said. “And then obviously, COVID relief of various sorts. We’re part of a perishable food coalition with our beer industry partners and a whole panoply of other food producer and distributor organizations trying to deal with the fact that there was, by most estimates, about $900 million worth of beer that had to get poured down the drain, in the pandemic and the shutdown. So we’re part of that and there’s a variety of other bills that are pending, or at least being discussed.”

On the state level, Sorini said the BA will support state brewers guilds as they advocate for the permanence of local changes that came through legislation and executive orders during the pandemic to assist struggling breweries, such as home delivery and expanded to-go sales.

However, the BA eliminated the position of state guilds manager Acacia Coast on June 26. In response, leaders of 20 state and city guilds penned a letter asking the BA to reinstate Coast, create a seat on its board of directors, or form a guild committee or subcommittee, as first reported by Good Beer Hunting.

In the letter, the guild leaders warned that “the confusion, dissent, distrust and crisis of confidence in BA leadership that Acacia’s dismissal causes will stretch far past your 2020 budget,” according to a

draft shared with Brewbound. They called Coast’s dismissal “a blow to all of us and the work we do on behalf of our breweries.”

BA state and regulatory affairs manager Pete Johnson is now the point of contact for guild leaders, Sorini said.

With Sorini’s hiring as a full-time employee, the BA will be better situated to support guilds on legal matters.

“I am going to step into a role where we’re going to up our game in supporting the guilds,” he said. “Legally, there’s been a process for a while, with some guilds being able to ask the BA for legal assistance. That legal assistance was coming from my old firm which was outside counsel.

“The cost is going to be very different for them. And so we’re going to be able to expand our bandwidth in supporting what the guilds want to do at the state level,” he continued.

Among state legislative issues Sorini expects to arise in coming months are proposed excise tax increases as state and local governments contend with budget shortfalls.

“I assure you that we will be collaborating with our wholesale and retail partners throughout the states to fight those,” he said.

Other state and local issues taken up will be at the discretion of the guilds and will vary by priorities of their member breweries. Sorini expects that the expansion of takeout privileges temporarily offered during the pandemic to be the starting point for local legislative work.

The explosion of local craft breweries in the past few years has consisted of those who conduct business via sales of pints, flights and packaged beer to-go from their own taprooms. Sorini pointed to this as response to consumer demand for “dizzying variety and choice.”

“The vast majority of the beer is still sold through distributors, and I don’t see that changing, but there was that long tail where people were coming to the brewery,” he said. “That’s not possible right now, or at least is very constrained. And so, if the drinker can’t get to the beer, then we need to find a way to get the beer to the drinker.”

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Since mid-March, when bars and restaurants closed for on-site consumption, governors and mayors have allowed those businesses to sell beer, wine and in some cases, cocktails, to-go.

“We think there’s a path forward there; obviously, all of that depends on whether a given guild wants to make that a priority,” Sorini said. “We think that looks like a logical place to start for the majority of our members. Is that going to be a huge priority for the biggest members? Maybe not.

“But one of the great things about this industry is we’ve seen people support the association and its goals — even if, as an individual company, [bar and restaurant to-go sales] may not be the most important thing for them. That’s one of the beautiful things about the craft beer community,” he continued.

Sorini’s relationship with the BA is long. He began representing the trade group’s predecessor in 1998 and continued after the BA took its current form when the Association of Brewers and the Brewers’ Association of America merged in 2005.

However, his relationship with craft brewing goes back even further. Sorini first tasted craft beer via Harpoon Brewery and Commonwealth Brewing Company’s brewpub while living in Boston after graduating from Lehigh University in 1988. He entered law school at Georgetown University in 1991, and his appreciation for craft beer continued to flourish after graduation.

“I got out and shortly thereafter I remember reading my first Michael Jackson book, the World Guide to Beer in 1994,” he said. “A year out of law school I said, ‘I wonder if I can be a beer lawyer?’”

Sorini worked at a few law firms before landing at McDermott in 1999, bringing the BA’s predecessor as a client with him. With his new position, his legal career has come full circle.

“There’s a lot to be done, but it’s an exciting opportunity for me to come back to my roots of small brewers,” Sorini said. “I’m going to have a blast helping the industry, so it’s all great, it’s my dream job.”

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