Home > The Events > Beer Law & Legis: Update on Legal Issues in the Beer World

Beer Law & Legis: Update on Legal Issues in the Beer World

chopping the beer tax is just one of many topics for discussion around the nation.

This week I am going to steer away from my own dramatic portrayal of a particular legal issue and discuss many. Oh yeah, I also want to disclose my new legal informational mega-resource: BrewersAssociation.Org’s Legal Brief.

I stumbled upon the Legal Brief when trying to figure out how to have a successful law practice and a think about beer, beer distribution, beer brewing, beer labeling, beer marketing, beer licensing and beer liability ALL DAY. Over the past few months, I have slowly come to the realization that I am good at many things, but I am great at beer. Hence, a “beer law” practice shall be borne and there shall be a man who spends his entire day, night and dreams fighting for the common brewer on all fronts. Come faster, future.

For the time being, my website trapsing led me to a wonderful tool on BeerAssociation.Org’s webpage which was created with the intention of helping brewers better navigate the labeling laws. Wow, where was this last week when I wrote about Beer Labeling Laws. The tool is very effective in providing the bare necessities to small-time bottlers. You can find plain language PDF files easily laying out the laws for things such as mandatory government warnings. These are helpful, so check them out.

But, what I was most impressed by is the site’s Legal Briefs. The site issues Legal Briefs once per month in an effort to produce the most up to date and relevant changes in law, nationwide. The briefs also discuss current topics of interest, which are gaining steam in legislatures across the 50 states.

Lets take a peak at February 2010 (thanks BrewersAssociation.org writers):

The Federal Beat:

The “small brewer” excise tax is gaining steam in Washington DC. The proposed HR 4278, a copy of which can be viewed here, is a proposal to cut the tax rate in half, on each brewer’s first 60,000 barrel production. The proposal also reduces the upper tax downwards for production of 60,000 up to 2 Million barrels.

For those of you nanobrewers – I am sure you are thrilled. But, for brewers such as Lazy Magnolia (MS), Dogfish Head, and Left Hand Brewing – there is much to rejoice about the recent attention the bill has received.

Reports indicate that sponsor support in the House is on the rise and the discussion keeps intensifying. Keep up with news on the bill at Brewers Association.

In other news, the World Health Organization is continuing efforts to try and reduce alcohol’s alleged harmful effects. Ok, they have a point, but the proposals in their recent draft strategy are both impractical and exhaustive:

As part of the United Nations, WHO is tasked with developing global health policies and most recently released its Draft Global Strategy to Reduce the Harmful Use of Alcohol. Among the recommendations are restricting access to alcohol through regulation of the number and hours of on-premise and off- premise outlets, marketing restrictions and a host of pricing-related policies including taxation, inflation-indexing and minimum price levels.

So apparently the WHO wants each nation to regulate everything in the beer industry. Maybe they are simply throwing 1000 darts hoping to hit something. I do believe that their pricing models are not incredibly horrid – but what about education! There is not one reasonable approach to education. Teach – and the people will learn.

The Federal Court Beat:

The dreaded “three-tier” system reared its ugly head in a recent 5th Circuit Court decision, where the court ruled that prohibitions on direct shipment of beer by in-state retailers was constitutional.

Here is the writer’s take:

The basis of the Court’s decision can be traced to the structure of the three-tier system itself: within this structure, producers are often out-of-state entities while wholesalers and retailers are in-state concerns, over which states have the unquestioned right to regulate their operations and impose the conditions under which they conduct business.

The Court is not taking a side in the “three-tier” debate. They are simply providing that a state is free to regulate business inside its borders. I will assume that the Court took a look at interstate commerce and decided that this is not a reasonable exercise of that federal power.

Thank goodness most retailers/wholesalers are willing to ignore these laws and ship anyways!

The State Beat:

Indiana – Indiana is finally close to opening up its’ wholesaler stores to the sale of the holy trinity – beer, wine and spirits – all at the same time. Both the House and Senate have comparable bills to ensure that licensing can be obtained by wholesalers for all three boozy libations.

Oklahoma – OK Senate Bill 2027 is seeking to eradicate contracts between all mid-sized and large brewers and wholesalers. This is actually good for small outfits, who are exempt from the proposed law (under 300K barrel production).

Pennsylvania – Welcome back from your slumber away from practical sense. In one of the most unsupported and ill-founded moves, PA has prevented distributors from selling 6 packs of beer for as long as I can remember. Kudos legislature:

Legislation allowing beer distributors to sell six-packs of beer (H.B. 2203) has been introduced for consideration. Currently, restaurants and taverns are permitted to sell six-packs, but distributers must sell only by the full case.

Now pass it. I mean come on.

Indiana – A proposed tax hike on beer sales would actually fund more beer research and education. Well, at least there is something good to be found here:

House Bill 1281 seeks an increase in all alcohol excise taxes (beer would increase from 11.5 cents to 43.5 cents per gallon), with part of the increased revenue going toward to fund a proposed microbrewery development council for the development, promotion, and education of microbreweries.

California – CA’s Marin Institute of Beer Haters (not their real name) finally has a bill on the docket to outlaw caffeinated malt beverages. For those of you who, like me, love a good coffee porter – this is a bad step. Also, WA folks – a similar law was introduced recently in our neck of the woods (H.B. 2804).

But, I have come to the realization that there may be some need to cut back on the “supplement beers.” That does not mean that any beer having caffeine in it (which is a lot) should be subject to review for approval by the TTB prior to release. The following two situations require a review:

(1) A beverage containing at least 0.5 percent alcohol by volume that is produced by a brewer, as defined in Section 5092 of Title 26 of the United States Code, to which is added or infused caffeine or other stimulants, alone or in combination, including, but not limited to, guarana, ginseng, and taurine.
(2) A beverage containing at least 0.5 percent alcohol by volume that is treated by processing, filtration, or another method of manufacture that is not generally recognized as a traditional process in the production of beer, as described in Section 25.55 of Title 27 of the Code of Federal Regulations, to which is added a flavor or other ingredient containing alcohol, except for a hop extract, and caffeine or other stimulants, alone or in combination, including, but not limited to, guarana, ginseng, and taurine.

Hopefully this proposal will get the kinks worked out, but I would seriously doubt that this one dies dead in the water. Something will be passed.

Iowa – The Hawkeye state is finally making headway towards craft brewing, and enjoying their first IPA. The state still limits ABV content to 5% for beers brewed in the state. But a recent proposed Senate bill proposes increasing that limit to 17%. That ought to be good enough to give you a good buzz.

Mississippi – Poor Mississippi. To our friends over at Lazy Magnolia – we are sorry to hear about these failures:

House Bill 731, seeking to increase the amount of alcohol that beer may contain from 5% to 10% by weight, has died in committee.
S.B. 2243, seeking to increase the amount of alcohol that beer may contain from 5% to 8% by weight, has also died in committee.
Failing to receive consideration, H.B. 732 sought to allow a person the right to brew homemade beer for personal, family, domestic or household use.

Washington – We will round out the article with a look at how good ole Beer Blotter’s home is looking.

WA is finally considering a well-rounded bill (HB 2099) which properly addresses the shipment of wine (and hopefully beer soon) to its residents from out-of-state retailers. A simple permit will be all that is needed in order to ship from online sellers to WA residents.

A House bill (H.B. 2688) would allow grocery stores to offer beer and wine tastings.

This one is great, and certain to spawn some wonderful entreprenuers:

Senate Bill 5111 would allow businesses engaged in the sale or sale and delivery of gifts and flowers to obtain a beer and wine gift delivery license, allowing the business to solicit, take orders for, sell, and deliver beer and/or wine. Delivery of beer or wine must be made in conjunction with gifts or flowers and to individuals other than the person placing the order.

The big legal movement right now in WA is the push to privatize alcohol sales. Passing out of committee, S.B. 6204 looks to be on its way to do just that.

Finally, Senate Bill 6333 establishes a pilot project for beer and wine tasting at farmers markets.

Thats it for now folks. See you again next week!

Categories: The Events
  1. Dick D.
    February 26, 2010 at 12:08 am

    Thank god there is some movement in Washington to try and privatize liquor sales. About time!

  1. April 6, 2010 at 8:43 am
  2. April 27, 2010 at 9:25 pm

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