January 25, 2024
And that’s a wrap on 2023! As we close out the first month of the new year, here is a look at the California Alcoholic Beverage Control’s (“ABC”) significant legislative changes affecting the industry in 2024:
For more information on new ABC legislation, contact an attorney at Strike Kerr & Johns.
December 04, 2023
The partners at Strike Kerr & Johns are pleased to announce the elevation of Roger Clayton from Senior Associate to Partner!
Roger joined the firm as an associate in 2019. Prior to developing an expertise in alcohol regulatory law, Roger was a trial attorney in San Diego and a litigator with an international law firm. Roger regularly assists clients with trade practice issues, marketing promotions, tied-house compliance, third-party alcohol delivery, distribution agreements and administrative actions.
If you have any questions regarding the above, or relating to Chicago sports, Roger likely has the answers. Learn more about Roger here.
November 03, 2023
In 2022, Alaska Governor Mike Dunleavy signed Senate Bill 9 (“SB 9”), an omnibus beverage alcohol bill that includes new requirements for direct to consumer (“DtC”) shipping. Starting January 1, 2024, in- and out-of-state manufacturers must apply for a Manufacturer Direct Shipment license to ship product directly to Alaska residents. Manufacturer Direct Shipment licensees may only ship holder’s product through approved common carriers, and may not ship to any address in a zip code that has adopted a local option rule prohibiting the sale of alcohol. The Alcohol and Marijuana Control Office (“AMCO”) will compile a list of zip codes that are located within local option areas and notify Manufacturer Direct Shipment licensees of changes to the list. The bill’s language suggests that a permit holder may only ship wines of its own production, but the wording is ambiguous on this issue.
Previously, Alaska was one of only a few states where DtC shipping was permitted without a license. In-state and out-of-state manufacturers were able to ship direct to consumers under a blanket letter from AMCO stating that Alaska does not regulate alcoholic beverages imported in to the state for personal use. With the passing of SB 9, licensees will need to apply for the Manufacturer Direct Shipment license to continue shipping DtC.
The Manufacturer Direct Shipment license authorizes Alaska brewery retail, winery retail, and distillery retail licensees, as well as holders of manufacturer licenses issued in other states, to sell and ship their product directly to Alaska consumers, subject to quantity limits:
Manufacturer Direct Shipment licenses will not be issued to licensees that annually produce more than 300,000 barrels of brewed beverages or more than 50,000 proof gallons of distilled spirts. There are no production limits for winery licensees.
The new legislation also includes age verification requirements for Manufacturer Direct Shipment licensees. Prior to shipping, licensees must verify that the person submitting the order is at least 21 years of age using an age verification service or other method and require a signature by a person who is at least 21 years old upon delivery. Licensees must also label the shipping container as containing alcohol and include written or electronic information to the purchaser regarding fetal alcohol syndrome. Licensees should retain records relating to DtC sales for at least two years.
Manufacturer Direct Shipment licensees will also be subject to state excise tax starting in 2024. Licensees are required to file monthly statements and remit taxes to the Alaska Department of Revenue. Reports must include the total number of gallons sold, the name and Alaska address of each buyer, and the gallonage of each kind of beverage sold to the respective buyers.
The Manufacturer Direct Shipment license application will be available through AMCO and cost $200 biennially. We expect that AMCO will publish additional guidance soon. If you’re interested in applying for a license or have questions about the new legislation, contact an attorney at Strike Kerr & Johns.
August 19, 2023
This week, California ABC announced new priority and intercounty license authorizations for eligible counties. This year’s announcement includes five (5) new Type 87 licenses for specified census tracts in San Francisco, as well as new on-sale liquor licenses in Napa, Mariposa, Alpine, Shasta, and El Dorado counties. A full list of the new license authorizations can be found here.
Introduced in 2016, Type 87 licenses are known as Neighborhood Restricted Special On-Sale General Licenses, issued to applicants in specific neighborhoods in the city and county of San Francisco. Type 87 licenses are typically designated for bona fide eating places and authorize the sale of beer, wine, and distilled spirits for consumption on the licensed premises, and generally subject to the same privileges and restrictions as a Type 47 license. These licenses require unique public notification and community interaction and approval during the formal application process and are generally non-transferrable. If there are more applicants than the five (5) licenses available in the specified
neighborhoods, a drawing will take place.
Another notable announcement includes a number of new on-sale authorizations in counties where priority licenses are generally unavailable. ABC announced new on-sales licenses in Napa County (10), Mariposa County (2), Alpine County (1), Shasta County (4), and El Dorado County (4). Priority license application form for all counties should be available August 23rd.
Between September 11th and 22nd, 2023, ABC district offices will accept applications for priority and intercounty licenses in eligible counties. This year, priority license fees are $17,335 and intercounty license fees are $6,570, to be paid at the time of filing. If there are more applicants than licenses available, priority drawing will be held the week of October 23rd. More information on specific dates and time for each drawing should be available October 16th.
There are residency requirements to be eligible for these licenses and the priority application process has become more cumbersome in recent years, resulting in some priority drawing winners later being deemed ineligible. As such, we recommend having experienced alcohol counsel review your applications prior to submission. If you’re interested in applying for a new or intercounty priority license, or have additional questions about the drawing process, contact an attorney at Strike Kerr & Johns.
June 02, 2023
Over the last week, leading industry trade groups have announced updates to their respective codes of advertising and marketing standards. These revisions are based on the latest 2020 census data released by the United States Census Bureau and aimed at ensuring alcohol advertising reaches an appropriate adult audience and complies with the industry’s commitment to responsible promotion.
Under the new guidelines, alcohol advertising should not appear in any media where more than 26.3% of the audience is under 21 years old, the legal purchasing age. The previous threshold, based on the 2010 census data, was 28.4%. The decision to revise the standard was prompted by the 2020 census data, which revealed that 73.8% of the U.S. population is 21 years of age and older, an increase from the previous figure of 71.6%. This adjustment ensures that alcoholic beverage advertisements are effectively targeted towards the intended adult audience. By aligning advertising strategies with the revised codes, industry members can demonstrate their commitment to responsible marketing and product promotion.
The adoption of the census-based standard was originally recommended by the Federal Trade Commission (FTC) in its 2008 report on “Self-Regulation in the Alcohol Industry.” Periodic updates to these voluntary standards ensure the industry practices reflect changes to modern society and technology.
Trade organizations including The Wine Institute, The Distilled Spirits Council of the United States (DISCUS), American Craft Spirits Association (ACSA), American Distilled Spirits Alliance (ADSA), Beer Institute, and Brewer’s Association are among the groups that have released updated guidelines.
January 18, 2023
Welcome to 2023! As industry members prepare for the year ahead, a recap of new and notable California Alcoholic Beverage Control (“ABC”) legislation to look out for:
For more information on new ABC legislation, contact an attorney at Strike Kerr & Johns.
December 15, 2022
The Alcohol and Tobacco Tax & Trade Bureau (“TTB”) recently published TTB Industry Circular 2022-2, which provides updated guidance on the use of social media in alcoholic beverage advertising. All advertisements for alcoholic beverages in any form of media – print, television, outdoor, social media, etc. – must adhere to the TTB’s advertising regulations, which are codified in the Federal Alcohol Administration Act (“FAA Act”). These regulations are intended to protect consumers by prohibiting false or misleading claims in relation to alcoholic beverage products.
As new forms of social media emerge, the TTB periodically releases updated advertising guidance. The last Industry Circular on social media advertising was released in 2013. TTB Industry Circular 2022-2 includes some notable changes, including specific provisions that address mobile websites, crowdsourcing sites, augmented reality, and social
media influencers. Some of the key takeaways are as follows:
Mobile websites: Most industry members use internet websites to advertise their products. Industry members might have a special version of their website for mobile devices that differs from their traditional desktop website. Both the mobile and desktop versions of the website must comply with the TTB advertising regulations.
Crowdsourcing/Crowdfunding sites (Kickstarter, GoFundMe, etc.): Industry members that use crowdfunding websites to raise capital or to solicit donations are required to follow the TTB advertising regulations if the crowdfunding page discusses the company or any of its alcoholic beverage products.
Augmented Reality: Industry members may enable consumers to access augmented reality technology, wherein a computer-generated image is superimposed on the user’s view of the world. Augmented reality content is subject to the TTB advertising regulations.
Social Media Influencers: Personas on social media (Instagram, YouTube, TikTok, etc.) with an audience or followers are often paid for their endorsement of certain products, including alcoholic beverages. Content produced and posted by social media influencers involving alcoholic beverages may be considered an advertisement, which would make it subject to the TTB regulations, even when the content is posted on the influencer’s own social media account.
The new guidance also clarifies that the same rules apply to all forms of social media advertising, including social media “likes” and third-party content that is reposted or “liked” by an industry member. Any content that an industry member posts, “likes,” or reposts that would cause the content to show up in their followers’ feeds is considered
advertising, and thus, subject to the TTB regulations.
For more information regarding social media advertising for alcoholic beverages, contact an attorney at Strike Kerr & Johns.
October 31, 2022
Starting January 1, 2023, changes to the Craft Beverage Modernization Act (“CBMA”) will require foreign producers of beer,wine, and distilled spirits to register with the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) before their US importers can take advantage of reduced tax rates or credits on the imported products. CBMA tax benefits are limited in quantity, and foreign producers may only assign a certain number of benefits to their US importers for each category of product imported.
Prior to 2023, US Customs and Border Protection (“CBP”) administered CBMA tax provisions for products imported into the US. Pursuant to the new changes to the CBMA, TTB will soon be responsible for administering CBMA tax benefits instead of CBP.
To take advantage of the tax credits, foreign producers must register with TTB using the online myTTB system; the current procedure of providing an authorization letter on the producer’s letterhead will no longer suffice. The registration process is fairly simple – the foreign producer is asked for basic information about the its business and ownership, its US Food & Drug Administration Food Facility Registration number, and to identify the foreign producer’s point of contact.
Once registered, the foreign producer will receive a TTB Foreign Producer ID, and an owner, officer, employee, or authorized agent of the foreign producer may assign the foreign producer’s tax benefits to its US importer. The US importer will need to provide the foreign producer’s TTB Foreign Producer ID to CBP during the Customs entry process, as well as when the importer submits CBMA import refund claim information to TTB. TTB will provide additional guidance on refund claims for US importers in early 2023.
TTB has already launched the foreign producer registration system. Additional guidance, including a user guide, can be found here.
Browse all tags: