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Alcohol Regulation Roundup: Dog Days Edition

These days in D.C., the mercury regularly rises above the 90-degree mark right along with most of the U.S. As unpleasant as it might be to live on the surface of the sun, there’s nothing quite like enjoying a cold one with friends to celebrate as that damnable orb descends below the horizon each evening. Take a look below at the regulatory changes around our sticky nation that could affect the ease and cost of obtaining your preferred poison.

Alabama: is expecting an influx of new beers in coming weeks thanks to a change in the law that now allows beer to be packaged in bottles as large as 25.4 ounces where previously they were limited to 16 ounces in most of the state.

Arizona: The new growler laws go into effect this month allowing restaurants to fill the take-home jugs where before only microbreweries and brewpubs were allowed to do this.

California: Apparently California lawmakers don’t have a whole lot of pressing issues to deal with so they have to get into the business of regulating celebrities signing wine bottles. The State Assembly passed bill 2184 at the end of July which stipulates that 1) Consumers must not be required to buy anything to get an autograph, 2) They don’t have to pay a fee for the autograph, and 3) The store is required to pay for the services needed to carry out the autograph promotions. Where it gets really crazy is that the bill also stipulates that the retailer may advertise the event, but the brand owner may not (i.e., Jacob’s Creek couldn’t put an ad on its website or Facebook page). Also, it states the signing may happen in retailer shops, but not restaurants and that the brand owner may only visit a retail shop twice per year to do autograph sessions. As Tom Wark over at Fermentation: The Daily Wine Blog noted,

These and so many other alcohol regulations not only serve fears that originated 100 years ago and no longer matter, but now only serve to protect the financial interests who have used 100 year old fears to game the system to their own economic interests.

Also in California: beers aged in used wine barrels are officially still legally considered beer. Last month Gov. Jerry Brown signed a bipartisan bill ensuring that microbreweries don’t have to worry about aging beer in wine/liquor barrels. Some in the industry feared that because the beer derived some of its flavor from the barrels which previously held wine or liquor, that the beer might be considered a distilled spirit by the state, which would require much higher taxes.

Kentucky: Only two states in the nation maintain a prohibition on election-day alcohol sales. However, if Rep. Arnold Simpson has his way, South Carolina would be the only state banning alcohol on election days. He estimates that Kentucky loses $625,000 in tax revenue each election year.  His proposal would only affect “wet” counties.

Massachusetts: Braintree, a small town south of Boston, has decided to maintain its odd prohibition against pitcher of beer. I guess their name is ironic, like calling a big guy “Tiny.”

Mississippi: News flash for anyone who hasn’t studied economics: reduced restrictions results in a business boom. In the wake of Mississippi’s alcohol regulation relaxation -- increase the cap on the alcohol content of beer from 5 percent ABW to 8 percent ABW (about 10 percent ABV) customers have significantly increased purchases of microbrews. The owner of Hops and Habanas, a bottle shop in Mississippi, claims that he’s seen seven times the normal volume of customers since the switch. Beer festivals in the state also expect a bump in attendance with the addition of 10 new breweries and new beers from already existing Mississippi breweries.

New Hampshire: Congratulations to Red Hook brewery and all of the other defenders of liberty in New Hampshire on news laws increasing brewer freedom. In June, Gov. Lynch signed a bill allowing craft brewers in the state to include “non-beverage” ingredients in their beers, such as molasses, spices, honey, maple syrup, chocolate, and nuts.

New Jersey: Beer advocates in the Garden State are optimistic that a bipartisan craft brewer’s bill will get the governor’s signature this year, increasing the state’s appeal as a location for new brewers as well as for tourists. Among other things, A-1277 would allow microbreweries to sell their beer to visitors for on or off-site consumption (with off-site sales limited to half a keg per customer). It would also increase the amount microbrewers could make each ear from 3,000 to 10,000 barrels a year while still maintaining their “micro” status. It also allows brewpub operators to have up to 10 locations instead of the current maximum of two.

New York: Awesome news for small brewers in the Empire State -- Governor Cuomo signed the small brewer’s bill which allows brewers producing less than 300,000 barrels a year to more easily end contracts with their distributors. While many states make it almost impossible (either through legal or financial barriers) for small brewers to end contracts with distributors -- even if they perform poorly -- the new law allows small brewers or brewers making up less than 3 percent of the distributor’s sales, to terminate agreements if they provide “fair market value” for the cancelled contract (which would be determined in arbitration). As Scott Vacaro, founder of captain Lawrence Brewery in Elmsford put it, "Gone are the days when a distributor can basically promise you the moon and deliver next to nothing."

Oklahoma: Oklahomans will have to wait another year to vote on legalizing grocery store wine sales. At the end of June the Oklahoma Supreme Court ruled in favor of allowing the petition to go forward. Circulated by Oklahomans for Modern Laws, State Question 763 would allow towns of more than 50,000 residents to vote on legalizing grocery store wine sales. Unfortunately, the group announced in August that continued legal challenges would prevent them from collecting the necessary 155,000 signatures in time to get on the fall ballot.

Pennsylvania: The loathsome and loathed Pennsylvania Liqour Control Board (PLCB) is at it again (it being the effort to make the state's alcohol laws some of the most confounding in the nation) with a ruling that makes many “mug club” rewards illegal. Mug clubs are customer loyalty programs that often offer prizes like t-shirts and mugs, and sometimes offer discounts on drinks or additional ounces for the price of a regular drink. But the PLCB’s recent ruling such discounts on drinks or giving additional ounces to some customers is “discriminatory” price setting. That is despite the fact that the clubs in question are free to join. Bars and restaurants across the state are now wondering if their loyalty programs might run afoul of the might PLCB’s whim. I say even if their pricing was outright discrimination -- as in, you need to pay an initiation fee or visit the bar so many times before being allowed to join the club -- there’s no reason a private bar or restaurant shouldn’t be allowed to offer its loyal customers special prices. As other have pointed out, this is something that virtually every grocery store already does.

Texas: Texas Alcoholic Beverage Commission (TABC) official changed the definition of a beer in Texas. This is good news because the state’s quirky former rules resulted in a lot of headaches for brewers who had to change their labels or stay off of Texas shelves altogether. The definition change follows a ruling last December after the TABC was sued by the owners of Jester King Brewery who insisted the labeling laws violated their first amendment right to free speech. The law in question was the TABC’s requirement that drinks with more than 4 percent alcohol by weight be labeled as either ale or malt liquor and are prohibited from being labeled as a “beer.” Now brewers may call their product whatever they feel is appropriate -- so long as they list the alcohol percentage on the bottle.

Also in Texas: The Lone Star State could be $5.6 billion richer -- all they would need to do is change some of their alcohol laws, according to a study commissioned by the Texas Craft Brewers Guild. According to the study, 92 percent of the state is experiencing a craft beer shortage due to restrictions and market barriers upheld by the Texas Alcoholic Beverage Code (TABC). Removing these barriers would result in the additional billions of dollars based on current sales projected growth of the craft beer industry.

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