Monthly Archives: March 2015
We encourage industry members to learn the ins and outs of the new Tennessee ABC rules for marketing spirits and wine. Read more here: Market Memo
Reminds us of the ubiquitous 1974 song by one hit wonder The Hues Corporation:
to rock the boat, don’t rock the boat baby
rock the boat, don’t tip the boat over
rock the boat, don’t rock the boat baby
rock the boat
Monthly Tennessee Alcoholic Beverage Commission meetings are typically unexceptional. Not a place to expect much drama or hullabaloo.
For industry insiders, the March ABC meeting featured a real cliffhanger. The City of Memphis asked the ABC to revoke the license of Gagliano’s Liquor, Inc., d/b/a The Bottle Shoppe. The ABC agenda framed the issue as follows:
On February 11, 2015, Mayor Wharton issued a letter revoking his approval of the City of Memphis’ Certificate of Compliance (dated July 31, 2014) for this location based on allegations of the site being too close to two churches and a residential community. The Commission is tasked with determining what recommendation to make to TABC staff regarding the action of the City of Memphis, including, but not limited to, having the issue set for TABC revocation before a state administrative law judge.
Two of our favorite Memphians, City Attorney Roane Waring and Memphis Alcohol Commission Executive Secretary Aubrey Howard, journeyed to Nashville to advocate for revocation of the liquor license of The Bottle Shoppe on behalf of Memphis Mayor A.C. Wharton.
Commissioner John A. Jones quickly extinguished hopes for help from the ABC. Since the formation of the Tennessee ABC in the 1960s, there has always been a Jones on the Commission. We love the perspective that Commissioner Jones often brings to the discussion.
Commissioner Jones observed that in his 20 plus years as a Commissioner, the agency had never revoked a liquor license because a city changed its position on approval of a certificate of compliance. Jones noted that Memphis could deny renewal of the certificate of compliance when it came up for renewal.
Reminds us of Got My Mind Made Up by Bob Dylan and Tom Petty
Don’t ever try to change me,
I been in this thing too long.
There’s nothin’ you can say or do
To make me think I’m wrong.
We appreciate the Commission taking a firm position on this issue. City approval of a certificate of compliance should be final for purposes of city laws like distance requirements. The Commission should not be a forum for enforcement of local laws that a city has already signed off on.
Tennessee’s relatively newly-minted Attorney General found a way to seize the spotlight during the middle of Tennessee’s legislative session. In what we suspect was one of the top daily downloads on the Hill, General Herbert Slaterty found a potentially fatal constitutional defect in Tennessee’s state law that defines Tennessee Whiskey.
When we originally analyzed the whiskey bill, we thought that the exception carved out for Pritchard’s made the entire bill unconstitutional.
If a state-mandated recipe for Tennessee Whiskey was critical to survival of the product in the marketplace, why exempt what was then the state’s third largest distiller?
It is too early to tell, but General Slatery’s humble opinion may lead to a windfall of historic perspective for lobbyists. With the Legislature starting to focus on winding down for the session, time is critical. We expect a considerable amount of whiskey will be consumed in the ensuing evenings as distillers, legislators and lobbyists map out next steps, or reach a consensus to defer action until January 2016, when the Legislature reconvenes.
Conjures up a song that demonstrates the longevity of anti-government sentiment among some distillers:
“My daddy he made whiskey, and my granddaddy too
We ain’t paid a whiskey-tax since seventeen-ninety-two.”
Albert F. Beddoe immortalized the words in the 1953 tune Copper Kettle (The Pale Moonlight).
We are pleased to report that the TABC promptly responded to industry comment about suspending manufacturing privileges for sales to minors. We broke the news here.
The new guidance says that sales to minors may lead to a suspension of rights to sample and sell spirits at the retail store, but sales to minors will not lead to a suspension of the right to manufacture. We applaud the ABC for revisiting its policy based on industry feedback.
Brings to mind a classic by George and Ira Gershwin, “Changing My Tune:”
Wanted a permit to make me a hermit
To grumble and glare at the moon
But I’m arranging from now
To be changing my tune
Although some have grumbled that the TABC changes rules too often, we think that revising a rule based on industry comment is a good thing. There is nothing wrong with the TABC proposing a rule and later revising the rule to better serve the alcoholic beverage industry.
The Tennessee ABC’s widespread compliance checks for sales to minors are testing wineries and distilleries. We hear that at least one winery has failed and has been charged with a first count of sale to minor.
Why worry? Under the ABC’s new policy for sales to minors, a second sale results in a 10 – 14 day suspension.
Based on what we have heard from the ABC, the suspension shuts down manufacturing. Meaning that a second sale to minor could halt distilling or wine making for up to 2 weeks.
Hee Haw’s hard to forget tune by Buck Owens & Roy Clark comes to mind:
Gloom, despair, and agony on me
Deep, dark depression, excessive misery
If it weren’t for bad luck, I’d have no luck at all
Gloom, despair, and agony on me
Imagine Jack Daniel’s shut down for two weeks. The economic impact would be enormous.
For distilleries, there is a way to prevent sanctions of retail sales from impacting distilling. The new distillery law grants rights to taste and sell at retail with no additional license. But the downside is that a sale to minor at the tasting room can shut down distilling.
The prior method for selling at retail required two permits – one for distilling and one for retail sales. The prior method is still valid and we encourage distilleries to consider going “Back to the Future.”
With separate licenses, sales to minors should not impact the right to distill.
We hope that a Legislative solution comes forth. The prior retail license is not as business friendly and the consequences of sales to minors at wineries and distilleries is devastating.