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IS Alcohol Different?

IS Alcohol Different?. Marc Sorini NABCA 16 th Annual Symposium on Alcohol Beverage Law & Regulation March 11, 2009. Arguments on both sides. Beer, wine and spirits are different Different social contexts and consumer attitudes

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IS Alcohol Different?

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  1. IS Alcohol Different? Marc Sorini NABCA 16th Annual Symposium on Alcohol Beverage Law & Regulation March 11, 2009

  2. Arguments on both sides • Beer, wine and spirits are different • Different social contexts and consumer attitudes • “Burkean” conservative logic: Beware the unintended consequences of departures from the status quo • Only alcohol matters • Alcohol is the reason for excise taxation and regulation, and therefore should be the touchstone of policy • New categories and technologies have eroded traditional segments to the point of no return www.mwe.com

  3. New products like FMBs, wine-based cocktails, and wine and spirits ready-to-drinks, challenge the status quo Many new federal rules (e.g., allergens, alcohol content rules) favor all-alcohol approach Stronger beer authorized in a number of states In fighting FMBs, advocacy groups seem to abandon their historic focus on all-alcohol Direct shipping laws usually widen the gap between privileges extended to wine versus other alcohol beverages No clear trends emerging www.mwe.com

  4. FAA Act permits for wineries and distilleries versus IRC-only brewer’s notice for breweries Different state license privileges at every tier Need to reconcile labeling and advertising (class/type, etc.) Uneven distribution requirements for different beverages Differences in trade practice restrictions between beverage categories Varying levels of wholesaler “franchise” protections between beverage categories It is not just an excise tax issue www.mwe.com

  5. Reconciliation depends on you view of what matters • Alcohol content only? • E.g., tax and regulate solely based on products alcohol by volume number • Alcohol concentration? • E.g., tax and regulate in “bands” based on alcohol content, but also disproportionately favoring lower alcohol by volume products? • Status quo? • E.g., method of production predominates, tempered by alcohol content (like current fed. spirits tax), concentration (like different wine rates) and wealth (like sparkling wine) considerations www.mwe.com

  6. Reconciliation (pt. 2) • Method of production only (grain fermentation v. fruit fermentation v. distillation) • E.g., extreme fealty to the historic categories • Taste? • E.g., critics of newer categories often motivated by fear that beverages “taste too good” and therefore attract underage drinkers • How to capture in a rational system? • Something else? • E.g., Consumption patterns (think Seattle alcohol “zones”) or cost (think higher taxes on sparkling wine) www.mwe.com

  7. I look forward to questions Marc Sorini

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