National Beer Wholesalers Association (NBWA) members gathered in Washington, D.C., this week to meet with members of Congress in person for the first time in more than two years as part of the trade group’s annual legislative conference.
Outreach to lawmakers and regulators earned the beer industry the essential designation that allowed it to continue operating during the most locked-down period of the COVID-19 pandemic, NBWA president and CEO Craig Purser reminded attendees before briefing them on the group’s legislative priorities ahead of their visits to Capitol Hill.
“Even though things were tough for our industry, everyone in this room pulled together,” he said. “You were able to keep your businesses going, keep your teams employed, and keep a wide variety of choices of beverages available to all Americans.
“But your advocacy made the difference,” he continued. “In other words, you understand that advocacy is essential.”
The U.S. Treasury Department’s report on the state of competition in the beverage-alcohol industry ranked near the top of the NBWA’s list of discussion points, which Purser called “widely panned.” He urged members to educate congresspeople on the three tier system’s capacity for competition.
“The system provides choice for consumers and regulatory accountability and consumer protection,” he said. “We’ll also be talking about how this facilitates incredible inter-brand competition.”
Purser also urged wholesalers to speak to their representatives about workplace challenges facing the beer industry, particularly the shortage of truck drivers, which could be alleviated by the passage of the Drive Safe Act (S.659/H.R.1745) that would lower the minimum age for commercial driver’s licenses from 21 to 18.
The spirits industry’s campaign to secure tax and market access equivalency for ready-to-drink, spirits-based canned cocktails was mentioned frequently from the stage and has been top of mind for the beer industry’s trade groups.
“The liquor industry does not need another tax cut,” Purser said. “And it has been great to work with the Beer Institute and the Brewers Association to oppose their self-serving ambitions.”
In a panel discussion with Beer Institute president and CEO Jim McGreevy, American Beverage Licensees executive director John Bodnovich, and Worldwide Brewing Alliance CEO Justin Kissinger, Purser described the spirits industry’s heightened advocacy work as “swinging for the fences.”
The push for spirits companies to pay equal excise taxes to beer for RTDs, which often have similar ABVs to beer, is “irresponsible,” McGreevy said.
“They have suddenly gotten a lot more selling locations over the last 10 or 15 or 20 years,” he said. “Taxes are where they’re going next.”
In addition to pushing for equivalence in taxes and market access, spirits makers are also pursuing expanded direct-to-consumer shipping privileges, which Bodnovich said has caused his organization to become “a bit more vocal,” because licensed retailers have long been “brand builders” for liquor companies.
“It limits access to the average consumer at the end of the day,” he said. “You think it’s hard to find a bottle of Blanton’s on the shelf right now, much less Pappy Van Winkle, wait until all those products are being sold online directly from distiller websites.”
NBWA chairman Peter Heimark traced the history of regulatory distinction for beer, wine and spirits during the general session’s opening remarks.
“This differentiation between beer and liquor goes back centuries,” he said. “Even as prohibition was being implemented, some of the policymakers who voted in favor assumed that only liquor was being banned, not beer and wine.”
Heimark noted that many NBWA members distribute beer, wine and spirits and have been instrumental in bringing RTDs to consumers. However, those products have more in common with cocktails made by bartenders than they do beer, he said.
“Many of us sell some of those other forms of alcohol, but we know the dangers of treating them all the same,” Heimark said. “Alcohol origin matters – a beer and a martini are fundamentally different and should be taxed accordingly, regardless of the kind of package they come in.”
TTB Deputy Administrator Details Bureau’s Priorities
David Wulf, deputy administrator of the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB), highlighted the organization’s priorities for 2022, which include preparing to onboard some tax responsibilities from U.S. Customs and Border Patrol (CBP).
Beginning January 1, 2023, the TTB will inherit the management of taxes and imports from CBP. Wulf estimated the new responsibility will require 40 new employees and about $14 million, which is included in a proposed budget from President Joe Biden.
“It will be great if Congress does its part and actually appropriates the appropriate funds,” Wulf said. “They won’t be here nearly in time for the flipping of the switch. But the sooner they get here, the sooner that money is appropriated, the better.”
Following the February 9 publication of the Treasury report – which Wulf quipped was a “good beach read” and a “total page turner” – the TTB has 120 days to “consider rulemaking and policy actions to further promote competition in the alcohol marketplace,” and the bureau is “in the process of doing that considering right now.”
“One thing you can count on is that the process is going to be an open and inclusive one,” Wulf said. “We want and are going to need all of you guys to be part of it.”
Other conference speakers included political analyst Charlie Cook, founder of the Cook Report, and Reps. Josh Gottheimer (D-NJ) and Brian Fitzpatrick (R-PA).