Press Release: Ensuring the Independence of America’s Beer Distribution System Focus of 2016 NBWA Legislative Conference

by Steve on April 11, 2016

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WASHINGTON, D.C. Independent beer distributors representing all 50 states arrived in Washington, D.C., this week for the 2016 National Beer Wholesalers Association (NBWA) Legislative Conference to educate members of Congress about how competition in the U.S. beer market thrives because of open and independent distribution.

NBWA Chairman of the Board Travis Markstein noted that there are more than 4,000 breweries operating in the U.S. today because of the independent beer distribution system, which gets brewers of all sizes to markets across the country.

“Distributors take pride in building brands – from the best-known brands to the smallest, newest labels,” Markstein said.

NBWA President & CEO Craig Purser shared data from a survey of NBWA distributor members that revealed:

  • 97% of distributors have added at least one new brewer partner in the past year
  • 94% of distributors carry products from local, in-state craft breweries
  • 94% of distributors carry the brands of multiple local brewers

“These numbers are proof that the independent beer distribution system is truly open,” Purser said.

America’s beer distributors are encouraging members of Congress to ensure the independence of America’s beer distribution system, which a report from the Boston Consulting Group calls “freely competitive and driven by consumer choice.” It goes on to explain how this system – and state alcohol laws – creates an open market for brewers of all sizes, large and small. Distributors are asking Congress, other policymakers and regulators to ensure that the American marketplace for beer remains competitive.

Senator Amy Klobuchar (MN), the ranking member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, was the congressional keynote speaker and discussed the hearing the committee held last December on the AB InBev/SABMiller merger and the state of competition in the beer industry.

Beer distributors also are asking members of Congress to fund the Alcohol and Tobacco Tax and Trade Bureau (TTB) to ensure it can regulate the alcohol industry and collect federal excise taxes in an effective manner, especially in light of an increasing number of industry participants and products.

A discussion with Alcohol and Tobacco Tax and Trade (TTB) Administrator John Manfreda highlighted the TTB’s role in enforcing trade regulations and maintaining the regulatory structure that supports the three-tier system. Manfreda described the TTB’s focus on collecting taxes and maintaining a level playing field. Purser noted that “alcohol regulations – which are the very foundation of this great system – can only be enforced when regulators have the resources to carry out their responsibilities.”

As Congress considers tax proposals, America’s beer distributors are encouraging Congress to pursue tax reform that ensures individual and corporate tax rates are reduced in similar manners; treats S corporations fairly; avoids the repeal of LIFO inventory accounting; leaves in place appropriate capital cost recovery rules to support and stimulate business investment; provides estate tax relief and preserves estate planning tools.

Should Congress advance excise tax legislation, beer distributors are communicating to Congress that the Craft Beverage Modernization and Tax Reform Act is a step in the right direction because it reflects current industry structure; applies to all alcohol manufacturers and importers; and recognizes distinctions among beer, wine and liquor.

America’s beer distributors also are asking members of Congress to co-sponsor the Sober Truth on Preventing (STOP) Underage Drinking Reauthorization Act, which is necessary to coordinate federal and state efforts in the fight against underage drinking. The legislation also reaffirms the effective state-based regulation of alcohol.

Additional issues discussed by beer distributors include legislative and regulatory options to ensure working men and women are not adversely affected by the Department of Labor’s proposed overtime rule; the Marketplace Fairness Act and policies that would give states the tools they need to level the playing field between brick and mortar businesses and online retailers; tax credits for natural gas vehicles; multi-employer pension plan reform and withdrawal liability relief for small businesses.

Monday’s Legislative Conference program also provided a look at the state of the industry with a panel moderated by Purser, featuring American Beverage Licensees Executive Director John Bodnovich; National Association of Beverage Importers President Bill Earle; Beer Institute President and CEO Jim McGreevy; and Brewers Association CEO Bob Pease.

The panel focused on policy issues impacting the beer industry, including tax issues, trade practice enforcement and the importance of TTB funding. The discussion also highlighted the role of independent distribution in the entire beer industry’s success, and the resulting choice and selection for consumers.

In a conversation with Constellation Brands Beer Division Chairman Bill Hackett, Purser and Hackett discussed the intense competition among brewers in the U.S. beer market and the importance of building brands. Hackett emphasized the value of partnerships across all tiers of the industry and noted the importance of maintaining the integrity and independence of the three-tier system and distributors, which is “paramount to the consumer.”

The program also included an update on the NBWA Next Generation Group and a presentation on the 2016 elections from Amy Walter, national editor for The Cook Political Report.

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