The 21st Amendment Meets the 21st Century

Indefinite Hiatus

2011-04-21T14:48:00.001-07:00

Well, given that it's been a year since this was last updated clearly I don't have the time I used to devote to it. So the blog is going on indefinite hiatus.

I still update my personal blog, though not as often either.

LCB Approves Spokane AIA

2010-04-08T08:19:00.000-07:00

Acronym Acronym? Acronym. What this translates to is yesterday, the WA Liquor Control Board approved a Mandatory Alcohol Impact Area for downtown Spokane. This makes it the third area in the state where certain kinds of low-cost, high-octane beer and wine are prohibited from sale for off-premises consumption.

This makes Spokane the third city to ask for a mandatory AIA; Tacoma has one and Seattle has two: the Downtown Core and the U-District. As you can clearly see, AIAs have proven effective in decreasing public drunkenness there. Just not at stopping fires in the middle of the U-District's streets, which is a time honored tradition.

AIAs start out as a "voluntary' process, in which the City outlines an area, identifies the sellers authorized for off-premises consumption, and works with them to voluntarily restrict sales of targeted products. If this is unsuccessful, the City can ask the LCB to declare a 'mandatory' AIA, forcing those licensees to stop sales of requested brands.

What I do find interesting is that the restricted wines and beers are listed by actual brand name, rather than by common characteristics. So for example, this allows Elysian Brewing's Elysian Fields Brewery (on the Southern edge of the Downtown Core AIA) to sell their (excellent) AK-47 Malt Liquor in growlers, while a liquor store in Pioneer Square can't sell Colt-45 or Old English. This targeted crackdown on specific brands is no doubt valid under the old Young's Market 'power to ban outright = power to do anything less' reasoning, the staple of Liquor Control Board authority across the country. But I do wonder how the targeting of individual brands would stand up under more recent jurisprudence.

Washington LCB Changes Advertising Rules

2010-03-04T15:40:00.000-08:00

Yesterday the LCB issued a ruling changing some of Washington's rules regarding advertising of alcohol and industry companies. Most of the changes define and update the current rules, but a few are worth noting.

Probably most important are new restrictions on outdoor advertising, under WAC 314-52.-070. The section was amended:

to restrict the number of signs advertising alcohol, brand names, and/or manufacturers that are visible from the public right of way on the outside of a retail premises to a total of four. The size of the signs is limited to 1600 square inches. Amended language to restrict outdoor advertising within 500 feet of places of worship, schools, public playgrounds, or athletic fields used primarily by children.

So no more than 4 signs visible from a roadway, no bigger than 40"x40", and restricted away from youth areas. Presumably this would also impact neon signs, so for example bars with more than four neon signs in their windows might have to remove some.

Also of note was a lot of rulemaking regarding 'money or money's worth' given by industry members to fundraisers and events, and several rules were updated. The LCB also created a new rule:

New Section – WAC 314-52-120 – Sponsorship of public and civic events.
Created a rule to address sponsorship of public and civic events by industry members. Industry members may provide the following:
Signage with the industry members name or brand name of their products; and
Programs or flyers to be disseminated at the event.
Acknowledgement of the industry member is allowed in any media advertisement where the function recognizes the sponsors of the event. The size of the alcohol industry member sponsor acknowledgement may not exceed the size of the event name.
Inflatables are not allowed inside the event area.
There may be no giveaways of alcohol promotional items of any kind to persons under 21 years of age.

Many of the comments to the rulemaking were from non-profits and foundations expressing concern over the new rules. The fear is that the more complicated money's worth rules will make sponsorship impossible, or at least unattractive.

The LCB Explanatory Statement can be found here (.pdf).

The new rules will go into effect on April 4th.

The Chemist's War

2010-02-24T13:53:00.000-08:00

Great article up on Slate, The Chemist's War: The little-told story of how the U.S. government poisoned alcohol during Prohibition with deadly consequences.

During Prohibition people were using industrial grade alcohol to make mixed drinks. Problem was, in order to be 'tax free' industrial alcohol by law had to be (and continues to be) "denatured". Which, as we know, is a polite euphemism for 'Poisoned."

But those plucky mobsters in their big hats paid chemists a fortune to 're-nature' tens of thousands of gallons of stolen industrial hooch. So the government steadily increased the toxicity of the chemicals used to denature the spirits. Which meant the mob chemist-treated bootleg alcohol was of increasingly varying quality and safety.

Estimates are that nearly 10,000 people died during Prohibition from drinking government poisoned alcohol.

What's most interesting is the sort of "they brought it on themselves" mentality that Congress took, even while people were dying in the hundreds every holiday season.

WA on the way to approving tastings at grocery stores.

2010-02-16T13:31:00.000-08:00

WA House Bill 2688 passed a couple days ago, and it now goes to the Senate for approval. The bill writes last year's tasting pilot program into law, and in brief:

Allows grocery stores (defined as at least 9,000 square feet, with groceries constituting at least 50% of their business) to purchase a $200 endorsement allowing them to conduct tastings of beer and wine in-store so long as they have had no more than one public safety violation in the last two years.
There must be a suitable area that minors and already intoxicated persons can be screened from.
Service is limited to two, 2-ounce tastes per person. Food must also be made available. Customers must remain in the service area while drinking.
Servers of the licensee must have the mandatory MAST training and permits.
There are several tied-house provisions. For example, advertising is restricted and must be conducted and paid for by the store itself. The store must pay for the samples itself, they may not be donated by the brewer or winery.
However, exceptions to the tied house provisions allow wineries and breweries to conduct the actual tastings themselves, including bottle signing, talks, etc.. However, participation of the brewers/vintners may not be required by the store.
The bill provides for a variety of punishments for violations, including suspension and/or revocation of the endorsement, and up to a $500 fine.
It also allows the LCB the right to refuse endorsements or place restrictions in Alcohol Impact Areas (AIAs), where chronic inebriation is a recognized problem.

The Senate Bill is SB 6329.

Iowa Judge: Jello Shots are a Beverage

2010-02-03T08:28:00.000-08:00

News from Iowa City where an ALJ has ruled:

"There is no evidence in the record to support the licensee's argument that -- simply because vodka was mixed with Jell-O mix -- it lost its character as an alcoholic beverage," Lockard wrote. "While there might be some debate in another context as to whether Jell-O is a food item or beverage, in this context ... the Jell-O shots served by the licensee were alcoholic beverages."

Apparently the bar was fined $500 for Service to Minors involving a Jello Shot, in response to which it argued that Jello Shots are not technically an alcoholic beverage, as the gelatin is, well, a gel, not a liquid. Nice try anyway.

South Butt vs. North Face

2010-02-01T10:59:00.000-08:00

This doesn't really have anything to do with alcohol per se, though I suspect some may have been involved in the drafting of this answer. The clothing company North Face is suing South Butt, LLC, for trademark infringement. South Butt has responded by arguing a 1st Amendment parody defense. Their Answer to the North Face Complaint is hilarious, and well worth reading even if you're not a lawyer.

The South Butt Answer to the North Face

My favorite parts:

Describing the defendant as a "cherubic teenager" who "may have turned 19 years of age, while he looks 14, and to some, acts 12".
"the consuming public is well aware of the difference between a face and a butt"
"Despite [the company's adventurous image] Plaintiff's products are perceived as being consumed by those who have little to no interest in living an adventurous lifestyle, but, rather, are interested in acquiring Plaintiff's products for the status and/or notoriety they receive from being seen in Plaintiff's expensive apparel and accessories." ... "Defendants recognized this bizarre phenomenon."

Alcopop Taste Test

2010-01-25T16:01:00.000-08:00

Humorous rundown of a few hideous alcopop brands from Zug.com

My favorite quote: "It smells like Sesame Street the morning after the cast discover binge drinking and projectile vomit."

Also this great image:

Union Strike Hits InBev in Belgium

2010-01-21T09:00:00.000-08:00

The strike that has been in progress for over a week now is rapidly depleting supplies of Leffe, Hoegarden and Stella Artois in Belgium.

At the heart is AB-InBev's plan to lay off hundreds of workers, about 10% of their Belgian workforce, despite posting global profits of $1.5 billion in the last quarter. It's a conflict of a small group of workers representing some very iconic Belgian beers, who are nonetheless part of a global conglomerate now representing over 200 brands. What may be good for the parent corporation and the stockholders may not be good for the little guys.

Meanwhile the global consolidation of breweries continues.

History of Bellingham Brewing

2010-01-19T08:35:00.000-08:00

Fun article in the Bellingham Business Journal concerning the history of brewing in the city. Like many frontier cities Bellingham historically had several breweries, all of which were killed off by Prohibition. Now it has two: Boundary Bay and Chuckanut. But what two to have! Boundary Bay has won a slew of awards and makes a great IPA. It is also quite large and is a venue for local music.

Chuckanut is only a bit over two years old but took two golds and two silvers at the GABF last year, making it Small Brewpub of the Year. No surprise here, the brewmaster is Will Kemper, erstwhile of Thomas Kemper Brewing and Sodas (bought by Pyramid Brewing in 90's, sold in 2007 to Adventure Funds in Portland) as well as a dozen more breweries that he helped get up and running.

Global Consolidation of Breweries Continues

2010-01-11T09:53:00.000-08:00

Heineken is buying Mexico's Femsa for $5.5 billion in stock. I believe Femsa is the second largest brewing conglomerate in Mexico, after Groupo Modelo. This means that Heineken now also controls Dos Equis, Sol and Tecate in the U.S. as well as Xingu in the U.S. and Brazil. This comes on the heels of Heineken's purchase of Newcastle last year, and is further representative of continued consolidation and struggle between the three largest conglomerates, Anheuser-Busch InBev SA, Heineken and SAB-Miller for market share in the developing markets of Central and South America.

"In the context of the reconfiguration of the global brewing landscape, scale and geographic diversification are more important than ever," said Femsa CEO Jose Antonio Fernandez Carbajal.

Widmer loses 62,000 pints of beer

2010-01-08T09:46:00.000-08:00

Ouch. Due to a power outage in Portland, OR, yesterday, Widmer Brothers lost an entire batch of their new, most expensive, and as yet unreleased Deadlift Imperial IPA. That's 7,750 gallons or around 62,000 pints down the drain.

Fortunately it will be donated to local farmers who will use it as animal feed and fertilizer. The article doesn't mention exactly why the beer couldn't be saved. My guess, since it is going out to animals, is that it was somewhere in the mash or sparge process when the power went out. While it would be hilarious to see a farm full of pigs hopped up on a 9.5% ABV double IPA, I'm guessing they're sending out the unfermented wort and/or mashed grain. Had it been in the fermenting tanks, that volume of beer, in a Portland winter, probably would have held temperature more or less had the glycol chillers cut out, and the beer would be just fine.

I'm sure the batch was probably insured as well.

Happy Repeal Day!

2009-12-05T11:28:00.000-08:00

Happy Repeal Day!

Prohibition ended seventy-six years ago today with the ratification of the 21st Amendment. Well, national prohibition anyway. It merely returned control to the states and of course local prohibition remains in places even today.

It's not officially a holiday, but it should be. I, for one, will be celebrating by raising a pint of something dark and oakey at Brouwer's Big Wood festival tonight.

Snow White and the Seven Angry Lawyers

2009-10-21T15:38:00.000-07:00

Now for an IP case that does have merit. Posted on Slashfood, here's an article about a promotional campaign for an Australian brewer that was... poorly thought out.

Jamieson's Brewery is launching a new raspberry ale under the slogan "Anything but sweet", aimed at convincing Aussie beer drinkers that fruit beers don't all taste like candy. Unfortunately they used a depiction of a certain "Ho White" and the seven renamed dwarves ("Smarmy", "Randy", etc.).

The Mouse was not amused.

And rightly so. This is clearly a derivative work, damaging to the wholesome reputation of the original movie. And since Disney will push to extend copyright terms any time any of its characters nears the public domain (Mickey first appeared in 1928!), it will also defend those copyrights. And here they'd be justified. Since it's an advertisement selling beer, any Fair Use parody defense will almost certainly fail.

Of course the use of a 'Snow White' character isn't itself a copyright violation. The stories have long been in the public domain, most notably the Brothers Grimm version. Using the basic storyline (Beautiful girl has problems with stepmother, flee to woods to live with creepy short guys, oops poison apple, Prince Charming saves day) wouldn't be a violation at all. But the picture is obviously derived from the Disney characters and this is just what copyright is designed for.

Even though this ad is a lot closer to the original story than Disney's movie ever was.

Monster vs. Vermonster

2009-10-21T15:02:00.000-07:00

The brewing community has been buzzing over a trademark dispute between Monster Energy Drink maker Hansen's Beverages and Rock Art Brewery in Vermont. Rock Art makes a barleywine called 'Vermonster' and when it announced plans to market outside the state Hansen's sent them a cease and desist for using their trademark on "Monster". Apparently, Hansen's has plans to enter to alcoholic beverage market. (Almost undoubtedly with an alcoholic energy drink, the difficulties of which I've commented on before.) Of course, Rock Art was already in the alcoholic beverage market...

It would seem that Rock Art is in the right. There is little risk of confusion or dilution of Hansen's mark. Monster's argument that 'Vermonster' might create the impression that Monster endorsed the use of the mark holds little water. Ben and Jerry's makes a Vermonster Ice Cream (Maple ice cream, roasted pecans and caramel swirl. Mmmm....) and Hansen's is not suing them. (And interestingly, B&J aren't suing Rock Art, in a very Vermont kindof way.) But defending a trademark dispute against a large corporation can bankrupt a small company. Yet owner/brewer Matt Nardeau decided to fight, and angry beer drinkers joined in. Calls for boycotts and angry letters to Hansen's appeared all over. Then Nardeau released this video which has 64,000 views as of 3:00, Oct 21st.

Apparently the parties have reached an amicable agreement, as of today Rock Art is claiming victory on their website.

Russell H. Everett, Esq.

2009-10-20T16:50:00.000-07:00

So I took quite a break after the WA Bar Exam and I suppose it's fitting that I return with this post:

I passed!

I'm filled with an enormous sense of relief and, indeed optimism for the future. And I am so relieved that I won't ever have to take that test again.

I figure it is time to get posting again and I have a few things in mind that should go up tomorrow.

South Carolina Judge Rules State Ban On Underage Possession Unconstitutional

2009-07-19T08:26:00.000-07:00

After today I'm dropping off the face of the Earth until the Bar is over. But saw this and decided on a quick post.

A magistrate in South Carolina has ruled that a state statute prohibiting underage alcohol sale, consumption, and possession is unconstitutional. At the heart of the matter is Article 17, Section 14 of the SC Constitution (emphasis added):

SECTION 14. Citizens deemed sui juris; restrictions as to sale of alcoholic beverages.
Every citizen who is eighteen years of age or older, not laboring under disabilities prescribed in this Constitution or otherwise established by law, shall be deemed sui juris and endowed with full legal rights and responsibilities, provided, that the General Assembly may restrict the sale of alcoholic beverages to persons until age twenty-one. (1973 (58) 864; 1975 (59) 13.)

So technically it does seem that the restriction is limited to sale under the state constitution. But let us not forget Section 2 of the 21st Amendment:

Section 2. The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.

The 'delivery and use therein' language has been a headache for the courts since the amendment's adoption. Is a sale a "delivery"? A "use"? Generally though, underage restrictions on sale, use, and possession have been found valid exercises of state 21st Amendment power.

In WA underage possession and consumption is prohibited:

§ 66.44.270. Furnishing liquor to minors -- Possession, use -- Penalties -- Exhibition of effects -- Exceptions
...
(2)(a) It is unlawful for any person under the age of twenty-one years to possess, consume, or otherwise acquire any liquor. A violation of this subsection is a gross misdemeanor punishable as provided for in chapter 9A.20 RCW.

However, there are always exceptions. And WA is big on protecting in-home privacy.

(3) Subsections (1) and (2)(a) of this section do not apply to liquor given or permitted to be given to a person under the age of twenty-one years by a parent or guardian and consumed in the presence of the parent or guardian. This subsection shall not authorize consumption or possession of liquor by a person under the age of twenty-one years on any premises licensed under chapter 66.24 RCW.

Underage children may be given alcohol by their parents if consumed in their presence. And that 66.24 reference refers to bars and restaurants, so it has to be in a non-licensed premises like their home, or presumably some other private place. Section 2(b) prohibits underage public intoxication, and the only exceptions are for medical and religious use. So presumably parents can't serve their kids at, say, a park BBQ.

And I'm sure that if you started giving little Jimmy his morning bowl of Whisky n' Cheerios, Child Services would be on your case.

The South Carolina case is being appealed. I'm sure they'll find a reason to reverse.

Update: Pride of Pyongyang - The Video!

2009-07-07T09:43:00.000-07:00

So it seems that North Korea's Taedong River Beer factory has released a commercial! (Alternate video link) Apparently it's quite rare for the government run television station to run advertising of any kind. The music is quite fetching really.

But it has nothing on Mr. Sparkle.

Ushers Pride of Pyongyang

2009-07-04T10:08:00.000-07:00

Here's a fun BBC article about how the old Ushers Trowbridge brewery was sold to the North Koreans, dismantled piece by piece, and moved to to Pyongyang.

See, no matter how bad life is in North Korea at least they have beer.

My favorite part: the seller's first thought was "Am I going to get paid?"

Two Articles

2009-06-26T09:31:00.000-07:00

Two interesting articles I came across recently.

1) From Reuters: StatoilHydro Fights Lithuanian Alcohol Ban. Norwegian gasoline company fighting Lithuanian ban on night sales of alcohol at gas stations. Lithuania (like most of the former Soviet bloc countries) has serious problems with alcoholism. We're talking 14 liters pure ethanol per capita annually (the U.S. is closer to 9 liters). Banning night sales at gas stations has apparently dropped alcohol related accidents by 45%. But the company, majority owned by the Norwegian government, is pressing to have the ban revoked, alleging that not all of its competitors are complying (probably true). But still kind of funny, because Norway has some of the most restrictive alcohol laws in the world. You can't even buy alcohol at gas stations in Norway.

2) From the BBC: Alcohol Link to one in 25 Deaths. That's worldwide. It's 1 in 10 in Europe, and 1 in 7 in Russia...

Pennsylvania - The Sheetz Case

2009-06-22T12:52:00.000-07:00

Last week the Pennsylvania Supreme Court handed down its opinion in Malt Beverage Distributor's Organization v. Pennsylvania Liquor Control Board. At issue was a law which required stores to allow on-premises consumption of alcohol in order to sell six-packs of beer for off-premises use. The court stolidly refused to legislate from the bench and upheld the law.

It's interesting to read some of the editorials about it, because they are perfect examples of modern perception of "archaic" liquor laws. True Pennsylvania has some of the more draconian liquor laws in the country, but the court was perfectly correct to uphold them.

"While a policy determination in this regard may well be accomplished by our legislature, it is not our role to sanction such a momentous transformation," Justice Max Baer wrote.

So the lesson is: angry Pennsylvanians contact your state legislature.

Pyramid Workers Arrested For After-Hours Fest

2009-06-12T09:53:00.000-07:00

From the Seattle Times. Some (presumably now former) employees of the Pyramid Brewery in SoDo broke into the brewery for a few pints after hours. And were promptly arrested. Ooops.

Pyramid has been going through some tough times recently. Remember they were bought out by Magic Hat last year. Recently they've rebranded all their beers. Which now seem weird and scary to me. Their iconic Pyramid Hefeweizen (the archtypical American Wheat Ale) is now 'Haywire Hefeweizen'. Because apparently that's MORE EXTREME!!!!!!!!

Apparently it's also now five times larger. EXTREME!!!!!!

New TTB Organic Wine Labeling Policies

2009-06-11T13:16:00.000-07:00

Quick post. The TTB has released a short information sheet covering their new policy on labeling organic wines. Basically, you can't just say "Made with Organic Ingredients" anymore, unless all the ingredients are in fact organic. So you'll have to say, for example, made with "Organic Merlot and Non-Organic Cabernet grapes" or "55% organic grapes and 45% non-organic grapes". Which is all fine and dandy and prevents consumer confusion in the often poorly regulated organic market.

But the sheet doesn't say how they are treating the wine adjuncts and additives. Is Isinglass organic? Bentonite? (Is it organic dirt?) What would an organic yeast look like? Oak barrels?

But it's back to the Bar Prep for me. Civ Pro, Crim Pro, and Trusts and Estates practice exam tonight. Good times.

Update

2009-05-24T18:17:00.001-07:00

Right, I'm on the ground in Seattle. But Bar prep starts shortly and the move is still in progress...

Let's just say updates will be spotty for a bit longer.

It's Legal to Move Homebrew in Washington!

2009-05-08T11:49:00.000-07:00

Word on the vine is that Gov. Gregoire signed Senate Bill 5060 into law on Wednesday, making it legal to remove up to 20 gallons of homemade beer or wine from your house for tastings, competitions, and most importantly enjoyment outside the confines of your house. Hopefully this will pave the way for a robust new calendar of competitions and national events like the AHA conference.

No update yet (3PM EST) on the Washington Homebrewers Association website, but I'm sure hundreds of homebrewer thanks go out to Mark Emiley and the rest of the WAHA crew for all their work in pushing this bill through.

Washington Homebrew Bill Update

2009-05-04T12:24:00.000-07:00

Washington Senate Bill 5060 has passed the Senate and is headed to the Governor's desk for signing. If you've got an inside link to Gregoire, drop her a line!

Not that the bill is particularly controversial.

Lake Chelan AVA Established / Paso Robles Westside AVA Expansion Revoked

2009-05-04T10:24:00.000-07:00

Quick break from finals to post this.

Beginning May 29, 2009, the TTB will recognize another American Viticultural Area in Washington State. The new Lake Chelan AVA will cover 24,000 acres around Lake Chelan, and be nested within the current Columbia River AVA. Don't know much about its wine potential personally...the only time I've ever been to Lake Chelan was when we needed an abandoned desert area in which to film a Mad Max style car chase for a school movie project. No word on whether Thunderdome Chardonnay will be available anytime soon...

Secondly, the TTB has withdrawn its notice of proposed rulemaking for the creation of the Paso Robles Westside AVA in California. Without getting into it too much there appears to have been significant disagreements among Paso Robles' vineyards about both the name and geographic significance of the proposed AVA. The notice does give an excellent view into the sorts of commenting and considerations that go into establishing a new AVA.

Walla Walla Wineries Wimpering Woefully Wounded

2009-04-29T05:22:00.000-07:00

Ok enough tongue twisters. AP article on the recession's effect on Washington's wine country.

Now off to my Professional Responsibility final...

Beer Wars Live Review

2009-04-17T06:24:00.000-07:00

So we got about seven of the homebrew crew out for Beer Wars Live out at AMC Sunset Place in South Miami last night. All in all a pretty good time, stopped off at the Titanic before the show for dinner and, appropriately enough, mugs of Arrogant Bastard and Dogfish 90 Minute.

The entire Beer Blogosphere, such as it is, will no doubt be buzzing about this so I'll keep my thoughts short.

The Good.

It was reasonably well produced and, come on, for a movie about beer and corporate competition it was pretty darn entertaining. There were some good moments of humor interspersed throughout, usually by creative use of old advertising and industry videos. It was also fun to see various beer personalities get riled up. Greg Koch and Sam Caglione are further cemented in my Hall of Beer Heroes. The 25 or so people in the theatre seemed to be having a good time. (Yeah it sold out in Boston, but hey, 25 people who care about beer in South Miami is an incredible showing!) Also the live simulcast was great, purely because it was a bit spotty and unpolished. It made the whole thing seem more personal somehow, even though there were 400 theatres involved.

The Bad.

Ok. Anat grated on me a little bit, nothing serious but at times she's a bit like a shrill Michael Moore. That didn't bother me too much, though I'm sure many reviews will be less kind. And sometimes I felt the history behind all this was treated a bit too lightly, I'd like to have seen a bit more about the forming of the Three-Tier system after Prohibition.

But my biggest problem BY A MILE is with her premise: that we need to ditch, or at least seriously rethink, the Three-Tier system. No one doubts that there are some serious problems with the current wholesaler tier. Yes, the large breweries (and distilleries/wineries as well! This isn't just a beer problem!) have gained more control over distribution than they were ever intended to. Yes, the small number of powerful distributors often limit choice and create barriers to entry. Yes, they sometimes break the law by offering all kinds of illegal perks, such as bulk discounts, free merchandise, advertising freebies, and sometimes outright bribes. But the distributors are creatures of statute. The monopolies distributors enjoy are granted by the states under the 21st Amendment. And there are perfectly good reasons that the system was structured this way. Distributors are the choke point between retail and production, which makes monitoring all three easier for the state. Because there are relatively few distributors, and they are often geographically limited, there is little incentive to compete, meaning that there is little incentive to make alcohol dangerously cheap and plentiful. Because their licenses are expensive, and profitable, distributors are incentivized to stick to the rules. Usually they get a single warning, then their license is revoked. In practice, even a warning would make investors nervous enough to pull out, spelling danger (possibly doom) to the company.

State legislatures and LCBs could change/actually enforce the restrictions placed on the middle tier, if there was enough political will to overcome the mountain of money in the way. Hopefully this movie will help educate and inspire craft beer fans to start pressuring their legislatures to do just that.

I guess my biggest problem is that while she suggests some alternatives, she doesn't really address the reasons why we have a Three-Tier system and the problems and consequences of tinkering with it. For example, she suggests allowing self-distribution for small brewers. Ok fine, but it's not so simple. Just take a look at the current mess regarding wine shipping and self-distribution. Appart from the cost to the breweries of licensing and bonding, compliance with the complicated regulations concering distribution would take some serious effort. And it would create that much more work for TTB agents and state liquor control officers to monitor that many more distributorships.

Finally, in ignoring the problems that created the Three-Tier system she ignores the inevitability that removing the system will only cause those problems to resurface. If the tied house and antitrust problems that arose before prohibition were bad then, when there were a thousand regional breweries, none with clear market dominance, imagine what it would be like if AB In-Bev and SABMiller could start buying into retail and distribution chains now. That little sliver of grocery store shelf space devoted to craft beer would be gone forever.

I gather that some of the Fresh Beer crew (our local distributors of Shipyard, Avery, Stone, Dogfish, Rogue, etc. i.e. The Font of All that is Good and Holy) were out at South Beach Cinemas for this. I'd like to get their opinion on it, I'll see if I can.

Want to buy Rolling Rock?

2009-04-13T07:34:00.000-07:00

...because Anheuser-Busch InBev is thinking of selling. Which is funny because three years ago AB bought Rolling Rock from InBev for $82 million dollars. One possible suitor is North American Breweries Inc. (a brewery holding corp crated by KPS Capital Partners), which recently purchased Labatt USA from AB following the DOJ's stipulations for the AB/InBev merger. Oddly enough, Labatt also used to own Rolling Rock.

Is there no love for the Pennsylvania Heineken?

News Updates

2009-04-12T08:49:00.000-07:00

So yes I'm still alive, but with graduation approaching, final papers due, Bar applications, moving arrangements, etc. I've been pretty busy. Updates will probably be spotty for a couple months at least, certainly until after the Bar.

Ok so here's some legal and personal updates:

First up: I have registered to take the Washington State Bar Exam! We'll most likely be moving somewhere between Seattle and Tacoma after graduation. I cannot understate how excited we both are to be moving back to the Pacific Northwest.

Wine News

EU suspends sales of US wine using controverted terms.

This is somewhat old news but if you haven't heard the EU has finally gotten fed up with the continued American use of semi-generic terms such as 'Clos', 'Chablis' and 'Vintage'. Last September the EU sent a letter notifying the US that it would not extend the grace period granted for such terms in the 2005 Agreement between the US and the EU regarding the trade in wine. EC Regulation 113/2009 came into effect March 10th, restricting future sales of all US wines using the controverted names to the existing stock on hand. Almost certainly US trade reps are meeting with the EU to work this out as we speak. Er, I speak. Or type.

No wine in NY grocery stores.

A bill proposed to allow sale of wine in New York grocery stores is dead in the water. Originally it was part of a budget fund-raising move, the new license fees would have brought in millions of dollars. However, the bill was shot down by the liquor company lobby and a coalition of police, concerned parents, etc. It's another interesting example of the conflict between the ideals of the prohibition-era laws that set up the NY alcohol trade, and the entrenched power thus vested in the liquor stores. Does restricting wine (which in 1933 America was generally high-strength rotgut, compared to the "refined" table wines of today) sales to liquor stores still serve a temperance goal? Or does it just line the pockets of a protected business? Or both? A good question for any state to ponder, as I believe only 35 states or so allow wine sales in grocery stores.

Beer News

Redhook/Widmer take a hit

Portland's Widmer Brewing turns 25 this year, but also took a serious hit from the recession. The Portland Business Journal reports that the company created by the Redhook/Widmer merger, Craft Brewer's Aliance, lost $30 million last year. The spike in raw materials costs that hit all brewers and the economic downturn seem to be the culprits. On the bright side, they still maintain their distribution agreement with AB/In-Bev (which also owns 1/3 of the CBA) and we've begun to see their Kona brand here in Miami. Anecdotal evidence indicates that it's refreshing and delicious.

It's now legal to homebrew in Utah, Washington getting there.

Utah Senate Bill 187 and House Bill 51 passed, making it legal to homebrew in Utah and revamping the state's alcohol laws.

Washington State Senate Bill 5060 passed the House (90-3) and now goes back to the Senate for concurrence. The bill faced minor amendments involving wording in the House Labor and Commerce Committee. It would still allow removal of up to 20 gallons of homebrewed wine or beer, not for sale, and for private use including at events and competitions.

Beer Wars

Also a 400+ simultaneous theatre showing of the documentary Beer Wars is happening this Thursday, April 16th. I've got my tickets. Expect a review (and about a thousand others on the beer-bloggernets)

Update: 3.2 here to stay in Utah

2009-03-13T07:44:00.000-07:00

The Utah Senate decided against passing Utah House Bill 349, meaning 3.2% ABW taps are here to stay in the Beehive State.

Sweet Lion of Zion! Utah Reforms its Liquor Laws

2009-03-10T06:57:00.001-07:00

Over the last few weeks there's been a hubbub in Utah involving a serious reformat of the state's liquor laws. Utah has historically had the most stringent alcohol laws of any state. (Arguably at least, several other states are quite restrictive as well.) It's important to remember that roughly 2/3 of the residents of Utah are Mormons, with around 80% of the legislature being a member of the LDS. So alcohol is treated far more as a vice than as a tax source or domestic industry.

Here's some highlights:

Utah is one of 18 monopoly states, and all wine and liquor for consumption off-premises must be purchased from state-run stores.
"Beer" is limited to 3.2% Alcohol by Weight (so 4% ABV), and may be purchased for consumption on-premises at most restaurants, taverns, airport lounges, etc.
Any beer over that is labeled "Heavy Beer" and regulated like liquor.
Restaurants may be licensed to serve all liquors, but they must be served to patrons by waitstaff, for on-premises consumption, with food.
Utah allows 'Private Clubs' where hard liquor and mixed drinks may be consumed on-premises, and maintains a byzantine system of temporary "memberships" allowing access for visiting patrons.
Hours of Sale are restricted, usually Noon-Midnight, never past 1:00 AM.
Utah's ratification made it the 36th and final state required to ratify the 21st Amendment.
Utah's liquor licenses are distributed according to a ration based on the census, strictly limiting the number of licenses in many areas.

When the Winter Olympics came to Salt Lake in 2002, the tourist outcry over the scarcity of alcohol led to some liberalization, and now in 2009 the state seems to be going through a major overhaul. There are several bills going up, including:

Senate Bill 187 - which would replace the private club system with an electronic ID registry, remove the "Zion Curtain" (a glass partition that servers must prepare drinks behind and then bring the drink around to bar patrons by hand) allowing service across bars, and includes a requirement for new restaurants to have a screened area where drinks are prepared out of sight of families and children. Existing restaurants will be grandfathered, and given up to $30,000 to remodel their premises should they wish.
House Bill 349 - which would allow draught sales of Heavy Beer, and is controversial amongst Utah's growing craft brewing industry, who have made a name on the strength of their 3.2% beers and the monopoly granted by that restriction. Check out this article on Utah's craft beer scene. A few years ago we drove through and visited several of these breweries and they were quite good. Mmmm Polygamy Porter ("Bring Some Home To The Wives!")
House Bill 51 - a homebrewing bill that will bring Utah in line with most of the states in the country, allowing production of 100 gallons of homebrewed beer and wine without a license.

Here's some more posts and articles:

Update - Washington Homebrewing Bill

2009-03-10T06:30:00.000-07:00

And we're back. Had to send the ol' laptop in for some much needed TLC. By which I mean an new motherboard and screen.

Washington State Senate Bill 5060 passed through the Senate unanimously on February 27th. Now it's on to the House Labor and Commerce Committee on March 13th. More info at the Washington Homebrewers Association.

BBC: Young Finns Debate Finland's Alcohol Laws

2009-03-04T05:57:00.000-08:00

Saw this clip on the BBC News this morning. What is most interesting is how these students appear to intuitively grasp the reasons for many aspects of alcohol regulation that were incorporated in the post-prohibition three-tier system in the U.S., (particularly in monopoly states). So for example they talk about how it's good that discount pricing is prohibited, and how they see taxes impacting consumption. Finally, related to the Blue Laws post of a few days back, that perhaps there are reasons people shouldn't be able to buy one Euro 9% ABV Baltic Porters at 6AM on a Sunday...

2009 Brewers Association Style Guidelines Released

2009-03-02T06:36:00.001-08:00

The Brewer's Association has released their 2009 style guidelines, which can be downloaded in .pdf here. Charlie Papazian's Beer Examiner article is here.

These guidelines are designed to assist brewers and brewing competitions (including the Oscars and the Emmys of the Beer World: the Great American Beer Festival and the World Beer Cup) in classifying and judging commercial beers, while also providing a sort of "State of the Union" concerning what styles are currently produced, which historical styles are being resurrected by craft brewers, and which are fading from production.

This year they added two new styles, bringing the total to 141. The two new styles are:

American-Belgo Style Dark Ales - These dark beers portray the unique characters imparted by yeasts typically used in fruity and big Belgian-style ales.
Session Beer - Ease of drinkability is a character in the overall balance of these beers. Beers in this category must not exceed 4.1% alcohol by weight (5.1% alcohol by volume).

I am actually quite happy with these two new styles. The American-Belgo styles the BA has added over the last couple years reflect the growing acceptance (and commercial success) of innovative American brewers who take the Belgian baselines and run with them. Russian River's Salvation Dark Ale, and other breweries like Lost Abbey, Jolly Pumpkin, New Belgium, Ommegang, Unibroue, and even relative newcomers to the Belgian game like Brooklyn Brewing come to mind. Nonetheless, the Belgian breweries (at least the non-Trappist ones) have never shied from creativity, and recent bottles have shown an similar effect happening in Belgium. For example, Houblon Chouffe was first brewed in 2006, and is a Belgian IPA-Tripel...

Similarly, session beers are becoming a marketable style of their own. For example, Full Sail Brewing makes a beer called Session Lager, which is supposed to be an all-pilsner-malt pre-prohibition lager like your grandaddy used to drink. Interestingly, at 5.1% ABA it is on the far maximum of the style... "Lawnmower Beer" (so called because either you want one after mowing the lawn, or because they're low enough alcohol that you can drink them safely while mowing the law. Jury's out on that one.) has been a term in beer circles for a long time, and breweries are cashing in on the term. The best example I can think of is Saint Arnold Brewing's Fancy Lawnmower Beer. However, the original spirit of the term 'session' simply meant a beer you could drink a lot of for hours at a time and not pass-out and wake up half-dead. So this should include a wide variety of Cream Ales, Blondes, American and Mexican light lagers, and pretty much all the British Milds and Bitters. Does this category really define a 'separate' style?

There is also an interesting crossover to TTB labeling regulations here. As written about earlier, the TTB requires a Type/Class designation for all malt beverages. Generally these are: "Malt Beverage containing greater than 0.5% Alcohol by Volume". So most beer styles receive a type designation that has absolutely nothing to do with the actual style itself. I suggested that perhaps the TTB could look to things like the BA Beer Style Guidelines to refine these a bit and prevent larger breweries from watering down styles honed by smaller craft breweries, but that the costs of enforcement and potential stifling of new styles, creating a sort of onerous similarity to French wine appellation tasting panels, would outweigh any benefits. Still, it is interesting to compare the differences in how the industry defines the styles and the government.

Introducing RussellEverett.blogspot.com

2009-03-02T06:11:00.000-08:00

It seems that when writing a blog on the internet either one of two things will happen. Either you set out with no particular topic and one developes organically over time, or you set out on a particular topic and it developes into something more. Over the months it seems that this blog was beginning to develope a split-personality, and had strayed slightly from the original core focus on alcohol law issues. So for increased clarity I've placed the past posts on homebrewing, our local/organic CSA, and things like Florida's habit of raining iguanas on a new blog: http://russelleverett.blogspot.com. Updates will continue on both, and they will of course be crosslinked with a blogroll in the left column.

Ok, administrative issues over, time for a new post.

Economic Downturn = End of Blue Laws?

2009-02-27T06:15:00.000-08:00

Interesting Time article about efforts in several states to alter or eliminate bans on Sunday sales of Alcohol. What I find most interesting is that the arguments raised on both sides represent a very current debate about alcohol regulation and consumption.

On the one hand the repeal argument centers around increased tax revenue for states with ailing budgets, coupled with a modern consumer mindset of "I want what I want and I want it NOW". These forces are heavily at work in modern alcohol control policy. So for example many of the states contemplating repealing Sunday Blue Laws are in New England, and they are doing so because people are hopping the border to states that allow sales on Sunday. States are therefore losing tax revenue to neighboring states. On top of that, to many people these laws just seem silly. In an age of 24/7 supermarkets it seems ridiculous that one can't buy booze whenever one feels like it.

Which is where the counter-argument comes in. The article frames it as a sortof dogmatic Christian Right stance, and perhaps there is an element of that, but it is more than just the old warhorse of "Alcohol Bad! Family Good!" Many cities and/or states restrict the hours that alcohol is for sale, even if they allow sales on Sunday. And there are good social policy reasons for this. It's generally better if people who drink a little too much have to go sleep it off, rather than popping down to the corner store at 4:00 AM for another fifth of tequila.

At the heart of Sunday Blue Laws is an appeal to what the Supreme Court has called in its more recent cases the "Core Purposes" of the 21st Amendment. These are supposed to be the original goals of the Amendment, including things like taxation, orderly markets, and temperance. (And these 'goals' are not without criticism, Justice Stevens called it "a totally novel approach to the 21st Amendment" in his dissent in Bacchus v. Dias. Even today it's not entirely clear what these purposes are or are not).

Here it looks like we have a conflict between taxation and orderly markets on the one hand, and temperance on the other. If people are jumping borders on Sunday, states lose both tax revenue and control over the time, place and manner of the sale. And there is the problem of "Blood Borders", where consumers cross the border, drink alcohol, then drive back home while intoxicated. So the state's core purposes can be aided by a repeal of the Blue Laws and subsequent regulation of Sunday sales within the state's three-tier system.

On the other hand, the arguments for Temperance ignore the economic realities on the ground and speak to more idealistic social engineering. Some people won't bother driving across the border for a six-pack, and if they run out of alcohol they just won't drink. And a day where people drink less, maybe spend some time with their families, get some work done around the house, go out for a movie, etc. can't be all bad for society. Not only that, by forbidding sales on a specific day the state subconsciously reinforces the idea that a) it controls alcohol and that alcohol is not just another consumer good, and b) alcohol is in some sense still a vice, which is why it is regulated the way it is.

But ultimately such arguments seem a bit antiquated, and the problem for modern temperance control is crafting laws that keep the evils of excessive consumption down, but that don't make you look like some hatchet-wielding, saloon-smashing, "Demon Rum" shouting nutcase. And perhaps the repeal of Blue Laws, with a subsequent absorption of the market demand into the state three-tier, accomplishes this better than the unstated "Don't drink, go to Church." of existing Sunday Blue Laws.

Snipes Mountain AVA

2009-02-26T09:48:00.000-08:00

Been meaning to get to this since last week. The TTB has established a new American Viticultural Area (AVA) in the Snipes Mountain region of the Yakima Valley, Washington State, effective February 20th, 2009. The new AVA exists within the current Yakima Valley AVA, which in turn is within the greater Columbia Valley AVA. As you might expect, this nested AVA is quite small, at 4,145 acres it's the second smallest in the state according to Wine Press NW. But it is huge compared to the Cole Ranch AVA in Mendocino County, California, which is only 62 acres. Also, note that the new AVA incorporates Bridgman Cellars, makers of a particularly favorite Viognier of mine. (Image from WinesNW)

AVAs exist so that winemakers from exceptional regions can denote that their wines are produced with a minimum of 85% grapes from that region. The requirements for establishing an AVA include local or national recognition of the name and boundaries, historical evidence of viticulural use within the area, and data on the special climate, elevation, soil , etc. of the region. For an interesting look at the process and requirements check out the Final Ruling on the Snipes Mountain AVA.

It's interesting to note that the Notice and Comment phase of the application brought in six comments, one of which brought up a potential problem involving a nearby wine region going by the name of "Snipes Canyon". The TTB responded to this:

"TTB believes ‘‘Snipes Mountain’’ is readily distinguishable from ‘‘Snipes Canyon.’’ Further, TTB is not aware of any conflict with existing brand labels that would occur if the viticultural area is established as proposed."

Though it seems the TTB isn't worried about this, perhaps the wineries should be.

The AVAs in the Napa Valley region led to a host of litigation regarding the protection and use of the AVA in trademarks and COLAs. (See Bronco v. Jolly, 95 P.3d 422 (Cal. 2004); Bronco v. Jolly, 29 Cal.Rptr.3d 462 (Cal. Ct. App. 2005))

In Bronco, the Napa Valley Vintner's Association challenged Bronco's use of several Napa AVAs in its brand names "Napa Ridge", "Rutherford Vintners", and "Napa Creek Winery". These brands had been grandfathered in under 27 CFR §4.39(i)(2), but ran afoul of a California law prohibiting the use of an AVA name when the grapes originated elsewhere, in this case Lodi. 27 CFR §4.39(i) governs the prohibited uses of AVAs, and reads (emphasis provided):

(i) Geographic brand names.
(1) Except as provided in subparagraph 2, a brand name of viticultural significance may not be used unless the wine meets the appellation of origin requirements for the geographic area named.
(2) For brand names used in existing certificates of label approval issued prior to July 7, 1986:
(i) The wine shall meet the appellation of origin requirements for the geographic area named; or
(ii) The wine shall be labeled with an appellation of origin in accordance with § 4.34(b) as to location and size of type of either:
(A) A county or a viticultural area, if the brand name bears the name of a geographic area smaller than a state, or;
(B) A state, county or a viticultural area, if the brand name bears a state name; or
(iii) The wine shall be labeled with some other statement which the appropriate ATF officer finds to be sufficient to dispel the impression that the geographic area suggested by the brand name is indicative of the origin of the wine.
(3) A name has viticultural significance when it is the name of a state or county (or the foreign equivalents), when approved as a viticultural area in part 9 of this chapter, or by a foreign government, or when found to have viticultural significance by the appropriate ATF officer.

After a million dollars of litigation going up and down the California court system Bronco lost the use of its brands.

Of course Bronco was a case where there was a specific California law prohibiting that sort of labeling and Bronco was making an enormous volume of wine with brands purchased specifically for their misleading names referencing a world famous AVA.

A quick search didn't turn up anyone using the actual brand "Snipes Canyon", though Brian Carter Cellars has a named Snipes Canyon vineyard. And of course any Snipes Canyon wines would still be entitled to use both the Yakima and Columbia Valley AVAs. So while it doesn't look like there will be a problem immediately, this is exactly the sort of situation that makes winery trademark lawyers nervous, so it's unlikely anyone will risk using the trademark.

Final note: there is a Snipes Mountain Brewery. Which raises the question of geographic labeling of beer all over again.

Update - Washington Homebrewing Bill

2009-02-26T07:03:00.000-08:00

Senate Bill 5060 could go up for a vote any day now. Contact your senator if you live in Washington, I sent mine an email today! More at the Washington Homebrewers Association.

Obama labels

2009-02-16T11:52:00.001-08:00

Interesting post over at Bevlog, covered in better and greater detail than I have time for. But the gist is that the TTB is really putting the hammer down on Obama-themed beverages.

The TTB generally frowns on putting anything on a label that might make it look like the Government endorses it, or uses someone's name without permission. These prohibited practices are listed for all alcoholic beverages, for example 27 CFR 4.64 for wine, and 27 CFR 5.42 for distilled spirits.

So for example Section 6 of 27 CFR 5.42 reads in part (emphasis added):

(6) A trade or brand name that is the name of any living individual of public prominence, or existing private or public organization, or is a name that is in simulation or is an abbreviation thereof, or any graphic, pictorial, or emblematic representation of any such individual or organization, if the use of such name or representation is likely to falsely lead the consumer to believe that the product has been endorsed, made, or used by, or produced for, or under the supervision of, or in accordance with the specifications of, such individual or organization: Provided, That this paragraph shall not apply to the use of the name of any person engaged in business as a distiller, rectifier, blender, or other producer, or as an importer, wholesaler, retailer, bottler, or warehouseman, of distilled spirits, nor to the use by any person of a trade or brand name that is the name of any living individual of public prominence or existing private or public organization, provided such trade or brand name was used by him or his predecessors in interest prior to August 29, 1935.

(b) Miscellaneous. (1) Labels shall not be of such design as to resemble or simulate a stamp of the U.S. Government or any State or foreign government. Labels, other than stamps authorized or required by this or any other government, shall not state or indicate that the distilled spirits are distilled, blended, made, bottled, or sold under, or in accordance with, any municipal, State, Federal, or foreign authorization, law, or regulations, unless such statement is required or specifically authorized by Federal, State, municipal, or foreign law or regulations. []

So for example, Revenue Ruling 54-340 (yes that was in 1954) concerned the use of the American Flag on a distilled spirit bottle, featuring the slogan "Fight Communism!" The label was approved so long as the flag was removed, as its use was found to constitute a "stamp of the U.S. Government."

"Fight Communism!" was ok though.

Of course, there's an American Flag and then there's an American Flag. Stoudt's Brewing Co's (amazing!) American Pale Ale COLA was approved in 1998. (That's 'Certificate of Label Approval', not Pale Ale Cola which just sounds unpleasant.)

So while he was just a candidate, the use of Obama's name was iffy but so long as he didn't mind too much they let it slide. Now that he's the President they are really cracking down.

Of course, like the Stoudt's label there are dubiously legal (but apparently TTB approved) ways around this.

For example, Pittsburgh's East End Brewing made this Belgian Tripel/IPA called "Ugly American".

Remind you of anyone?

Saint Somewhere Brewing on Good Morning America

2009-02-01T16:04:00.000-08:00

Tarpon Springs' own Saint Somewhere brewing was featured on Good Morning America. Which is interesting, as it's a new and very small (150 barrel annually?) place. They had Austin Wilson, the publisher of DRAFT magazine, on discussing pairing beer with buffalo wings, clip is here, and near the end he mentioned this up and coming brewery.

First off, I am happy that they were getting national attention. Kudos to anyone trying to make a Belgian craft brewery anywhere in the US, let alone braving the brew-wastelands of Florida! Secondly, this is really interesting because St. Somewhere's beers are in their, shall we say, infancy? We were all excited when the first bottles made it down to Miami, and eagerly purchased the whole lineup to give them a try. And they met with near-universal disappointment. We tried the saison and an amber about a year ago. The saison was completely flat, which is *blasphemy!*, and the amber, though carbonated, was sweet and had a certain homebrew edge about it. Both corks had to be removed with a wrench. That said, the saison made it into a tasting last Friday night featuring a dozen Farmhouse competitors and I must admit it had improved. It was still waaaay over-spiced, but a significant improvement. Still had to wrench it though...and to be fair, I have to wrench some of my corked Belgians too :)

This just goes to show that recipes and techniques change, and that a beer that was terrible in the past may be great tomorrow. Cheers to the brewer for taking the leap, especially in Florida. Hopefully he'll be able to upgrade some facilities with some increased Superbowl cashflow and really wow us in the future.

Update: Washington Homebrewing Bill

2009-02-01T15:59:00.000-08:00

Senate Bill 5060 has passed through the Washington State Senate Labor, Commerce, and Consumer Protection Committee by unanimous vote. Now it's on to the Senate Rules Committee to try and get scheduled for a vote on the Senate floor. If you're a homebrewer in Washington, contact your state senator!

More info at the Washington Homebrewers Association.

Washington Homebrewing Legislation

2009-01-20T14:30:00.000-08:00

Homebrewing is regulated differently in every state. In some, the regulations are as open as the Federal Statutes. In Utah and Alabama, it remains illegal. (Though legislative efforts are underway in both states.) In Washington, RCW 66.12.010 allows untaxed home production of wine and beer in the home, so long as it is not sold. However, and this is a big however, RCW 66.28.140 has been interpreted to severely limit the transportation of any homebrew produced in the state. The statute reads:

RCW 66.28.140 - Removing family beer or wine from home for exhibition or use at wine tastings or competitions — Conditions.
(1) An adult member of a household may remove family beer or wine from the home for exhibition or use at organized beer or wine tastings or competitions, subject to the following conditions:

(a) The quantity removed by a producer for these purposes is limited to a quantity not exceeding one gallon;

(b) Family beer or wine is not removed for sale or for the use of any person other than the producer. This subparagraph does not preclude any necessary tasting of the beer or wine when the exhibition or beer or wine tasting includes judging the merits of the wine by judges who have been selected by the organization sponsoring the affair; and

(c) When the display contest or judging purpose has been served, any remaining portion of the sample is returned to the family premises from which removed.

(2) As used in this section, "family beer or wine" means beer or wine manufactured in the home for consumption therein, and not for sale.

As I understand it, the state Liquor Control Board has interpreted this statute not just as listing the conditions under which homebrew competitions may take place, but, in conjunction with the "manufactured in any home for consumption therein" language of RCW 66.12.010, as listing the exclusive conditions underwhich homebrew may be legally removed from your house.

Senate Bill 5060 is to go before the Washington State Senate Commerce, Labor and Consumer Protection Committee today, where it will hopefully receive favorable treatment. The bill amends Washington's alcohol regulations to clarify the wording of RCW 66.28.140. It would allow removal of up to 20 gallons of beer and wine produced at home, and amends section 2 to include not only family production, but also homebrew produced for exhibition or use at organized beer or wine tastings, competitions, meetings, or conferences, or use by internal revenue code section 501(c)(3) nonprofit organizations, and not for sale. Leftover beer from competitions would no longer have to be returned to the brewer (which would be frustrating and near impossible!) This would allow larger homebrew events, such as the AHA Conference or AHA rallies, and smaller club competitions. It would also allow use by non-profits, for example you would be able to donate a keg to a church social, or other non-profit organization event.

However, to me it is still unclear whether you could donate one for a non-profit fundraising event like an auction or raffle. That is, if it's legal to consume your keg at a charity auction, would it be legal to auction the keg itself? Or the brewing of a batch for the winner? This is often a serious grey area in most states.

Presumably the bill will pass the committee and hopefully we'll see it voted on in this session. More info at the Washington Homebrewers Association.

The End of Alcohol Energy Drinks(?) And The Quiet Death of Zima

2009-01-16T07:27:00.001-08:00

A week before Christmas MillerCoors issued this press release, and voluntarily pulled their alcoholic energy drink Sparks from the market. This follows a similar move by AB last year, in which that company reformulated their Tilt brand. With the two biggies voluntarily bowing out, this could be the end of alcoholic energy drinks. At least, for a few years...

What's interesting about this is that the breweries voluntarily agreed to reformulate the product due to pressure applied by state AGs, though they were not currently breaking any laws. Certainly any state could easily amend their regulations to prohibit pre-mixed caffeinated alcohol drinks, but that wasn't the case here. The big debate currently in alcohol law is whether and to what extent the "old" values of temperance and control still apply, and to what extent the free market should be allowed to take over. These drinks are products of the new millenium, and the question arises, "We have caffeinated soft drinks. We have malt-beverages. Why exactly can't we combine them?" The answer seems to be less in the black-letter law and in the original spirit of post-prohibition regulation: caution, and restraint. The jury is still out on the combined health and safety effects of alcohol and caffeine, but consumption of these beverages does seem to indicate a tendency toward excess. Particularly in the younger demographic. Which makes the states wary...

One gets the feeling from the press release, and a Sparks FAQ still up on the web (note to companies: "removing current content" from the website does not make it go away altogether...) that their big concern is that they will be prosecuted for marketing the product to underage consumers, hence the repeated denials of any such conduct. The fact that these energy drinks are quite popular among the highschool and college set certainly is a liability for them in that respect. It's interesting that Miller agreed to pay over $500,000 to the AGs to settle the matter, and is illustrative of the gun-shy tendencies of producers faced with the sortof legislative netherworld that alcohol advertising exists in.

On a similar malt-beverage note: in the last few months Zima went quietly into that good night. Not exactly breaking news, but I've been meaning to mention it. Zima will go down in history as a perfect example of what can go both right and wrong when introducing a new alcoholic beverage, and how companies should adapt to the demos that embrace their product, not try to force the product on an uninterested group. If men think Zima is a laughable girly drink, don't try to convince them to drink it. Here's a much better article on the subject from Slate. Here's another fun one, in which it's argued that the discontinuation will allow MillerCoors to "focus on more preferred brands like Sparks".

D'oh!

No More Free Beer At Busch Gardens

2009-01-14T05:28:00.000-08:00

Article in the St. Pete Times. For those who were wondering whether InBev's stated goal of reigning in the corporate excess of Anheuser-Busch would impact consumers, it begins. Busch Gardens will stop offering free beer samples at their hospitality areas starting the 25th. (You've got 10 more days Florida! And, Virginia too I guess.) Apparently they are also revamping the parks' various restaurants, and there is some question whether (and which) InBev brands will be in, though they will probably put Stella Artois in at the very least. InBev has also mentioned that it is considering selling the parks, so perhaps this is step on in making them more family-friendly for a future non-brewery owner?

Northwest Absinthe / Washington Alcohol Law

2009-01-12T12:28:00.001-08:00

Since we are in all probability moving back to Washington in a few months I've been paying more attention to Washington's own alcohol laws and general goings on.

First: there's a new microdistillery in Woodinville, (conveniently located near my in-laws!), called Pacific Distillery LLC. They are in the process of producing their first commercial batches, gaining label approval and approaching the WA Liquor Control Board for distribution. The man behind the works is Marc Bernhard, an herb farmer turned distiller. He's starting off with a flagship gin ("Voyager Dry Gin") and...get ready Washington, an Absinthe! Called 'Absinthe Pacifique', Pacific Distillery uses medical grade ethanol which they infuse with high quality herbs to make their absinthe. This is big news because until recently Washington has made it very difficult to open a distillery, I believe Pacific is the second opened since Prohibition ended! (The first being Spokane's Dry Fly Distilling, who have only been around about two years themselves and who have a cool distiller's class they teach out of their distillery)

Their blog is here and there's an article on them in the Seattle Weekly here. Marc mentioned that he uses actual Artemisia Absinthium (Grand Wormwood) as well as Artemisia Pontica (Roman Wormwood) so I'm wondering whether he had trouble with the TTB or FDA on that one. I know many of the recent commercially available absinthes have had altered recipes to cut down on the Artemisia Absinthium (and therefore the thujone content).

Second: I bet that part of the reason that Pacific was able to open was Washington's new Craft Distiller's License. The licenses began June of last year, after SHB 2959 was passed, which amended RCW 66.24.140, and adds a new section RCW 66.24. The new license applies to distilleries producing less than 20,000 gallons a year, and at least 50% of whose ingredients come from within Washington state. The license costs only $100, while the normal distiller's license is $2000. This should raise eyebrows to those familiar with dormant commerce clause issues in alcohol law, as the state seems to be doing a similar sort of thing the Supreme Court shot down in Bacchus Imports, LTD. v. Dias, 468 U. S. 263 (1984), while at the same time giving the sorts of breaks to in-state producers that led to Granholm v. Heald, 544 U.S. 460 (2005). I haven't the time to write too deeply about it now, but I will in the near future.

And we're back...

2009-01-09T14:08:00.000-08:00

So finals and a snowbound Christmas vacation ate my life for the last few weeks...but now I'm back and tomorrow will be a major writing and posting day! Topics include:

Brew Day: Smoked Porter
Charcuterie: Brats, Weisswurst, Andouilles, Tasso, Turducken, Trotter Gear and Headcheese!
CSA roundup weeks 4. 5. 6.
The End of Zima, and the end of alcopops?
Woodinville's new craft distillery: NW Absinthe!
Washington's new craft distiller license: have they just recreated Bacchus?
Maybe more...

New Alcohol Labels Under Obama Administration?

2008-12-16T10:47:00.000-08:00

Quick post, as I have an Antitrust final tomorrow. The TTB is getting increased pressure to add the alcoholic beverage equivalent of Nutrition Labels to all beer, wine and alcohol sold in the US. The Notice of Proposed Rulemaking can be found here, you can comment if you want to. Here's the proposal:

TTB proposes to amend its regulations to require a statement of alcohol content, expressed as a percentage of alcohol by volume, on all alcohol beverage products. This statement may appear on any label affixed to the container. TTB also proposes to require a Serving Facts panel on alcohol beverage labels, which would include a statement of calories, carbohydrates, fat, and protein. Industry members may also choose to disclose on the Serving Facts panel the number of U.S. fluid ounces of pure alcohol (ethyl alcohol) per serving as part of a statement that includes alcohol content expressed as a percentage of alcohol by volume. The proposed regulations would also specify new reference serving sizes for wine, distilled spirits, and malt beverages base on the amount of beverage customarily consumed as a single serving. However, TTB is not defining a standard drink in this document. We proposed to make these new requirements mandatory three years after the date of publication of a final rule on these matters. TTB proposes these amendments to ensure that alcohol beverage labels provide consumers with adequate information about the product.

The labels might look something like this:

(Image from this article at WSU.)

As you can see the alcohol %, serving size, and calories are displayed. This could cause trouble for some 'lite' beers, which typically still have around 100 calories and some carbs. Very interesting...

Also, though a cocktail might have more calories, it won't have a label when it's served to you. Could this hurt bottle sales? "OMiGod, did you know Miller Lite has 96 calories!?! I'm going to have a Cosmo..." (140 or so calories)

Finally, since the TTB is not defining a standard 'drink', could someone like Dogfish put a "Servings Per Container: 4" on one of their big beers, like World Wide Stout or 120 Minute IPA? After all, 120 Minute weighs in at 450 calories a bottle! (Not that we care...) Or could Miller Lite put that on and claim "Only 24 calories a (4oz) serving!"

More at Bevlog.

Alcopop stings throughout Florida

2008-12-11T15:57:00.000-08:00

On December 5th the Division of Alcoholic Beverages and Tobacco conducted a statewide sting operation on the sale of so-called "Alcopops" to minors. Investigative Aides under 21 were sent in to attempt to purchase malt-beverages (think Smirnoff Ice, Sparkz, Mike's Hard Lemonade, etc.) Naturally Miami rang in at the lowest compliance rate, 58%, with 14 'arrests' (actually a Notice to Appear, coupled with a stern talking to) out of 33 businesses inspected. The statewide rate was 76% compliance.

Alcopops are complicated, because they walk the fine line between targeting underage drinkers and meeting the demands of an emerging niche market. Also their dubious status as 'malt beverages' can have certain tax and advertising benefits, which is why there isn't actually Smirnoff in your Smirnoff Ice. Often, they are nearly indistinguishable from other energy drinks or soft drinks, hence the emphasis on education for the retailers in these raids.

The Lehrman Bevlog has an interesting post about some recent labels for one of these products, where the label of Tilt has switched from listing caffeine and guarana as ingredients, to simply 'natural flavors'. It's obvious that is to avoid the scrutiny being given to these drinks by state AGs. See this earlier post. The question remains, does this still have caffeine in it? And what about people who are allergic to it?

Happy Repeal of Prohibition Day!

2008-12-05T12:56:00.000-08:00

Seventy-five years ago today, December 5th, 1933, the 21st Amendment was ratified and the national experiment in Prohibition officially came to an end. Interestingly Utah was the final state needed to ratify the amendment, though Mississippi would be the last to do so, in 1966.

This didn't end prohibition for everyone of course. National prohibition was over, but around 2/3 of the states elected to exercise their "local option" to allow voters to choose to remain dry, and for a time around of 1/3 of the population of the U.S. chose to do so, either on a state, county or local level. Even today dozens of dry counties remain, including, famously, Moore County, Tennessee, home of the Jack Daniel's Distillery.

Here in Florida there are five dry counties, Lafayette, Liberty, Madison, Suwannee and Washington County. What's most interesting about the dry county phenomenon is the interaction between state and local governments. In many states it's actually illegal for a city or county to go dry, meaning control of alcohol policy is firmly within the state's hands. For example, Oregon's Liquor Control Act, is "designed to operate uniformly throughout the state," and replaces and supersedes "any and all municipal charter enactments or local ordinances inconsistent with it." Others are simply given the option, for example New York allows local municipalities to exercise the option via a public referendum. In others control is handled almost entirely on a local basis. North Carolina may have the most complicated system, setting up dozens of independent local boards to create and administer alcohol policy within their small jurisdictions.

Well, here's to the diamond aniversary of the 21st Amendment! Now back to studying for my Intellectual Property final...

Alcohol News

2008-11-29T10:17:00.000-08:00

So it's Finals and Christmas time and I will likely be short on posts for the next few weeks. I'll be up in Seattle over Christmas for a sorely needed break from all this sunshine!

In the mean time, here are some interesting news articles:

1) Direct Shipping in Michigan: think again.

Article in the Detroit Free Press. Two months ago a federal judge ruled that the state had to allow direct shipping to consumers in what sounds like a Granholm decision (I haven't had a chance to read the opinion yet). In response, state lawmakers have introduced a bill to ban all direct shipping, instate and out. Michigan is a monopoly state, with the Michigan Liquor Control Commission acting as the wholesaler in their three-tier system. It's interesting to see what monopoly states do in situations like this, because the state itself has an economic interest in preserving the status quo. For example. comparing it to Washington could be interesting, as Washington's beer and wine industries are thriving while Michigan's are near non-existent. Is Michigan protecting fledgling domestic wineries? Or just making sure they get the markup and taxes paid on all alcohol entering the state? I'll try to look more into this when I get some time after finals.

2) Superjuice

Apparently things are getting bad in Manitoba, where members of the local reservation are abusing a new type of alcohol called "Superjuice". It sounds like they're just drinking some kind of mash swill made with distiller's or "Turbo" yeast. The best part is the idea that the yeast keeps acting in people's stomachs, which sounds ridiculous to me. A consult with my resident science adviser (my wife) has let to the same conclusion. Tough as that yeast is, and I've tried some horrific rocket-fuel barleywines made with it, it's not going to keep going in your gut.

3) Radio Bordeaux Dating

No it's not a new Studio Canal show. Article on the BBC about using gamma rays and ion beams to authenticate very old bottles of wine. Should result in some interesting fraud suits in the future. Now if they can only find a way to tell if the bottle's become corked...

4) Prices are falling. So is the sky.

In the current economic climate it appears that people are less interested in paying $1,000 for a bottle of Chateau Lafite Rothschild. Champagne is down as well. Apparently now's the time to buy... (cough cough). The same is happening with Vodka in Russia. Sales are down 70% and people are turning to poisonous moonshine. Yikes. Times are bad when you can't afford $1 a liter vodka...

5) AB Merger News

Two weeks ago the Justice Department approved the Anheuser-Busch / InBev merger on the condition that they divest themselves of the Labatt brand and facilities. No word on a buyer. (Heineken?) Tuesday the companies completed their stock sale. The new share price of Anheuser-Busch InBev immediately went up 16%, the highest increase in company history.

6) Sam Caglione, of Dogfish Head, in the New Yorker

Great article on Sam Caglione, owner/brewer at Delaware's Dogfish Head Brewery in the New Yorker. I've now got a half-crazed plan to try and brew a steinbier/sahti based on his in the article. There will be extensive posting about it, if I can get ahold of some river rocks...

Geographical Indication of Beer?

2008-11-10T13:16:00.000-08:00

Here's a post I've been meaning to write for a while. In mid-October Stan Heironymus' Appellation Beer reported that the Hallertau hop growing region was denied an Appellation of Control (AOC) by the EU. Notably, the EU has already granted AOC status to a different hop growing region, the Saaz area in the Czech Republic. I'll look for more details on the Hallertau situation, but a quick search hasn't brought up anything particularly useful. If it is true, however, it brings up a question I often think about:

Should beer be granted geographic designation like wine?

For wines geographic indication seems to be obvious enough, but in many ways beer appellation and, dare I say terroir, is much more complicated. What follows is a piece I wrote on the subject a couple months back.

There are certain regions that are well known for their beer. Some examples include Bavaria for German lagers and weisbiers, Belgium for abbey and wit biers, the Czech Republic for pilseners, and Burton-on-Trent for British bitters. These regions are famous due to a combination of location and history. Traditionally, the grains and hops would have to be produced locally, and water for the brewery came directly from the area. Styles developed around what sorts of recipes worked best with the particular combination of climate, ingredients and water. In this sense, these areas are very similar to famous wine growing regions. The locale impacts everything about the wine, and the most famous wines come from regions where the ingredients and climate come together perfectly. For this reason, many famous wine growing regions have been granted protected geographic indications to ensure that wines claiming that superior name actually come from that region. In the United States, a system of American Viticultural Areas (AVA) was established to protect the name of America’s best wine regions. So the question becomes, should beer be protected the same way?

Part of what makes a successful geographic indication is a good story about the history of the industry in the region. If a beer has been produced in the location for hundreds of years, it is more likely to be given a protected indication. However, America’s brewing history is very different from European brewing history. Many European styles were developed to suit their locale over several centuries. When European brewers immigrated to the United States, they did their best to adapt to local conditions, and regional American styles did develop.

However, with an influx of German immigrants in the later half of the 1800s, Pilsener became king. America’s most famous brewing regions were originally located in areas that had clean water and access to caves in order to lager the beer. Consequently, many of the mega breweries began in regions conducive to brewing this popular style: Coors in Golden, Colorado, Miller in Milwaukee, Wisconsin, and Anheuser-Busch in St. Louis, Missouri. Other regional brewers such as Pabst and Yuengling & Sons have much the same origin. In the late 1800’s the advent of refrigerated railcars and industrial scale brewing equipment made these beers available all across the country. No longer were beer consumers dependent on local ingredients and climate for their beer. Beer became an industrial product, available anywhere for the same price and with the same taste. However, there are signs that certain regions are once again becoming known for their craft brews. Does it make sense to grant these regions, some only a few decades old, a protected status? And is American beer an agricultural product, heavily dependant on location for its quality, or is it an industrial product, easily reproducible anywhere?

There are no equivalent protected geographic indications (PGI) or designations of origin (PDO) for beer in America. However, there are several in Europe, and a review of three important indications may shine some light on the potential pros and cons of a PGI for beer.¹

First, many beer styles are named after the place they originated from. No beer exemplifies this better than Pilsener. The yellow lager that is now the most popular style in the world originated in the mid-1800s in the region of Plzeň and České Budějovice in the Czech Republic, thanks to new malting techniques and particularly soft water. The beers quickly gained popularity in Germany, under the German name Pilsener, and from there made their way to the United States. Budějovice is ‘Budweis’ in German, and from that came Anheuser-Busch’s iconic Budweiser, a name they have held a trademark in since at least 1876. In the 1890’s, Budějovický Budvar began selling Budweiser Budvar in Bohemia and the companies have been in litigation practically ever since. In 2005, Budweiser Budvar was granted a PGI by the European Union, further solidifying its position as “the” Budweiser.

This illustrates the potential trouble of PGIs in relationship to trademarks. The Czech Republic claims that the terms Budweiser and Bud are geographical indications and has successfully canceled Anheuser-Busch’s trademark registrations in several E.U. member states. Since most of the styles brewed in the U.S. either have a generic name, or source their semi-generic name to a European city, it is unlikely that conflict will arise within the U.S. The main problem breweries will face regards semi-generic trade names used for beers being exported to the E.U. and under TRIPS. However, in the future there could be domestic trouble as the styles develop. A brewer in New England might face litigation for brewing a “Northwest Pale Ale” or a brewer outside Alaska might brew an “Alaskan Amber”. Only time will tell if and where geographic indications crop up within the U.S.

Second, sometimes the specific requirements of a geographical indication backfire on a brewery. Newcastle Brown Ale was one of a small number of beers in Europe to hold a Protected Designation of Origin (PDO), which was dependant on the product being brewed in “the city of Newcastle upon Tyne”. The 1996 award was also granted on the basis that the brewing process used water “taken exclusively from the area” and included a yeast and salt/water blend “unique to the Tyne Brewery”. However, in August, 2005, Scottish and Newcastle, PLC, the ale’s owner, closed the Tyne Brewery and relocated two miles away to a larger facility on the other side of the river. However, the new location was technically outside the city of Newcastle and Newcastle Brown Ale became the first product in European Union history to apply for the revocation of its PDO status.²

Newcastle is important in two respects. First, it illustrates the problem of associating the brewery with a single geographic location. Breweries are buildings, not fields, and they are much easier to move. But even a move of only two miles could take the brewery outside of its PDO.

Second, Newcastle illustrates some of the considerations that might be taken into account in establishing a geographic indication. Note that the specific brewery yeast is mentioned. Many breweries use proprietary yeast, for example the British ale Boddingtons claims that it has used the same yeast for 200 years.³ The Danish brewery Carlsberg was the first to isolate lager yeast in 1883, naming it saccharomyces carlsbergensis, a strain from which most modern lager yeasts may well derive. More recently Rogue Brewing of Newport, Oregon, has bred and uses proprietary “Pacman yeast” and Samuel Adams has bred a “Ninja yeast” for their high-gravity beers. Similarly, the archetypical “American Ale” strain of the ale yeast saccharomyces cerevisiae is alternately called the “Chico Ale” strain, after the location of the Sierra Nevada brewery, which is credited with breeding it.

Similarly, the PDO for Newcastle mentioned the particular water/salt blend. Importantly, Newcastle was not being held to the water of the river Tyne, they were allowed to blend in salts to adjust the water to their needs. This effectively eliminates water as a geographically specific ingredient. Historically, brewers were dependant on their water supply. Hop acids react with particular salts in the brewing water, and harder water is more effective at extracting hop bitterness and flavor. This made the incredibly hard water of Burton-on-Trent famous for its British Bitters. Now however, a brewery may claim a PDO and yet “Burtonize” its water by adding gypsum, chalk and Epsom salts.

A final example of a known PGI for beer is Kölsch. These beers were originally brewed in and around the German city of Cologne, “Köln” in German, and currently carry a PGI in the E.U. However, the style is very popular among U.S. craft brewers as it is a lager-like beer brewed with an ale yeast, which allows smaller breweries to produce a light tasting beer without the extra expense and hassle of lagering. None of the beers could be called Kölsch in Germany, however, and the German brewers have been anxious for the U.S. to enforce their PGI. Geographical names are covered in the TTB class and type designations under 27 CFR § 7.24, provided in relevant part:

(f) Geographical names for distinctive types of malt beverages (other than names found under paragraph (g) of this section to have become generic) shall not be applied to malt beverages produced in any place other than the particular region indicated by the name unless (1) in direct conjunction with the name there appears the word "type" or the word "American", or some other statement indicating the true place of production in lettering substantially as conspicuous as such name, and (2) the malt beverages to which the name is applied conform to the type so designated. The following are examples of distinctive types of beer with geographical names that have not become generic; Dortmund, Dortmunder, Vienna, Wein, Weiner, Bavarian, Munich, Munchner, Salvator, Kulmbacher, Wurtzburger, Pilsen (Pilsener and Pilsner): Provided, That notwithstanding the foregoing provisions of this section, beer which is produced in the United States may be designated as "Pilsen," "Pilsener," or "Pilsner" without further modification, if it conforms to such type.

(g) Only such geographical names for distinctive types of malt beverages as the appropriate TTB officer finds have by usage and common knowledge lost their geographical significance to such an extent that they have become generic shall be deemed to have become generic, e.g., India Pale Ale.

(h) Except as provided in § 7.23(b), geographical names that are not names for distinctive types of malt beverages shall not be applied to malt beverages produced in any place other than the particular place or region indicated in the name.

Under these regulations it appears that the TTB is either considering Kölsch to be a generic, like India Pale Ale under 27 CFR § 7.24(g), or more likely it is allowing the use so long as the brewery specifies that it is an American product under 27 CFR § 7.24(f)(1).

Interestingly the U.S. does appear to have some protection of geographic origin in 27 CFR § 7.25, which reads:

(a) Domestic malt beverages.

(1) On labels of containers of domestic malt beverages there shall be stated the name of the bottler or packer and the place where bottled or packed. The bottler's or packer's principal place of business may be shown in lieu of the actual place where bottled or packed if the address shown is a location where bottling or packing operation takes place. The appropriate TTB officer may disapprove the listing of a principal place of business if its use would create a false or misleading impression as to the geographic origin of the beer. (emphasis added)

One has to wonder how Sam Adams Boston Lager, brewed all over the country, is not giving a false impression of its geographic origin. Nevertheless, there appears to be the rudiments of a geographic indication system already embedded in the TTB regulations. The question becomes, could the AVA system accommodate beer?

Beer is not wine, and the current AVA system may simply not work for beer. Interestingly, existing AVAs do overlap with some of the areas best known for their craft beer, including the Sonoma and Mendocino counties of California, various parts of Oregon, and the Puget Sound region of Washington State. However, these regions are more of a reflection of an intellectual terroir, a symbiosis of passionate brewers and dedicated consumers who make the atmosphere possible.

Drawing geographic boundaries around such an area would be pointless. Famous beer regions in the U.S. are famous because their beer is currently superior, not because it was made there since the Middle Ages. Also, a specific beer is not a product of the climate in the sense that grapes are. Certainly, these brewing areas may be close to hop growing regions, but it is the hops that are dependent on the sun and the soil, not the brewery.⁴ Perhaps hops should have an AVA?

In Europe, hops already have a protected designation of origin. Based on Regulation No. 503/2007 of the 8th May, 2007, the designation Žatecký Chmel (PDO) was registered in the List of Protected Designations of Origin and Protected Geographical Designations.⁵ The designation specifies certain areas known for hop production within the Czech Republic, and specifically applies to the famous Saaz variety of hop. Žatecký Chmel is the Czech name for the hop, which has been known since the early part of the last century by its German name “Saazer hopfen.” Saaz hops are considered to be some of the finest aroma hops in the world and are indispensable in many lagers, especially Bohemian Pilsners. Similar hop growing regions could likely apply for designation in the future, such as the areas around Hallertau and Tettenang in Germany, known for Hallertauer and Tettenanger hops respectively, and Kent in the U.K., known for the iconic East Kent Golding variety. All of these varieties are grown in other parts of Europe and the United States, but it is likely that use of a geographic designation will increase the price for producers of the real thing. Would this system work in the U.S.?

The Yakima Valley of Washington State grows 75 percent of America's hops and about 30 percent of the world supply.⁶ The Valley is also known for its wines, and was recognized in 1983 as the first AVA in Washington State. The appellation covers 600,000 acres of land that is bordered by the Rattlesnake Hills AVA to the north, the Horse Heaven Hills AVA to the south and the Red Mountain AVA, which forms part of its eastern boundary.⁷ Within the AVA two sub-appellations have been recognized, the Red Mountain AVA in 2001, and the Rattlesnake Hills AVA in 2006. The Yakima AVA is also entirely within the 11 million acre Columbia AVA.

The Yakima Valley seems to be perfect for a hop AVA. Hop growers recognize three distinct growing regions within the valley, the Moxee Valley, the Yakama Indian Reservation, and the Lower Yakima Valley.⁸ Each microclimate is conducive to particular kinds of hops, and could even be considered a sub-appellation. It is trade practice in the industry to specify certain hop varietals as “Yakima Magnum” or “Yakima Goldings”.

Everything is in place to specify the valley as a geographical indication except for one thing. If 75% of the hop crop is produced there, how special can Yakima hops be? And if the product is not special, why bother protecting it? Some craft brews specify the type of hops used, and some specify the area. Some consumers will place special value on certain varieties grown in certain regions, such as Saaz hops from the Czech Republic, but will consumers pay more for hops grown in the Moxee Valley sub-appellation than in the overall Yakima appellation? Hops are not grapes, and the bragging rights gained from an AVA will only carry the crop so far…

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¹ A list of current beer PGIs in the E.U. may be found at http://ec.europa.eu/agriculture/qual/en/pgi_08en.htm (accessed 5/2/08)

² Publication, pursuant to Article 12 (2) of Council Regulation (EC) No 510/2006 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs, concerning a cancellation application. 2006 O.J. (C 280)

³ Family owned until 1989, Boddingtons was acquired by the British brewer Whitbread, which in turn was acquired by InBev in 2000.

⁴ Of course, grains are also dependant on the sun but due to the centralized and industrial nature of the malting business it is often impossible to tell where the barley came from. Similarly, patent and trademark law already protects proprietary malting methods. A question does however remain about possible indication of traditional floor kilned malts such as Maris Otter malt, the basis for traditional British ales.

⁵ 2006 O.J. C 204 (26.8.30)

⁶ Hop Growers of America, 2007 Preliminary Statistical Report, (2008), available at http://www.usahops.org/graphics/File/2007_Stat_Pack-wrking_file.pdf

⁷ 27 CFR § 9.69

⁸ Hop Growers of America, Yakima Growing Region. http://www.usahops.org/index.cfm?fuseaction=page&pageID=3, accessed (May 1, 2008).

Stone in FL / Bottle TM controversy

2008-11-08T10:02:00.000-08:00

Right, so it's been a while since I've had an update. Chalk it up to school and preparations for our biannual Election Day party. So first a couple small things.

1. Stone is coming to South Florida in mid-November! Rumor has it down the vine that a local distributor will be carrying the brewery's normal lineup of beers, Arrogant Bastard, Ruination IPA, etc. No word yet on whether we'll see their seasonals or the Vertical Epic series. This was a big topic of discussion at the 2006 AHA Conference in Orlando, where Stone CEO Greg Koch dashed all of our hopes by telling us that it would be years (2009 as I remember) before we'd see Stone in Florida. Well, it's almost 2009 and apparently patience pays. With any luck we'll get it on tap at the Titanic first!

2. The New York Times City Room blog has an interesting blog article about a trademark dispute between Garret Oliver's Brooklyn Brewery and New Belgium/Westmalle Abbey. Apparently the bottle design for Brooklyn's "Local 1" ale is too close for comfort to New Belgium and Westmalle's bottles. At the heart of the dispute is the raised ring around the neck of the bottle. Westmalle has traditionally used a single raised ring with the brewery's name on it, as has Colorado's New Belgium Brewing, and the double raised rings on Brooklyn's bottles raised some eyebrows. See below:

Brooklyn agreed to back down and redesign their bottles, at a cost of $60,000.

I actually wonder if they should have given up so easily. Certainly this is a perfect example of what the mere spectre of an Intellectual Property suit can do to a company, but they might have had some defenses. For example, one could argue that Westmalle and New Belgium's trade dress in their bottle shape hasn't acquired secondary meaning, at least within the US market. (How many average beer drinkers know Westmalle exists, let alone what its "distinctive" bottle looks like?) Yes the bottle shape is part of the the overall presentation package, but I doubt the popularity of these brands (delicious as they are!) is such that they have a credible secondary meaning in the mere raised ring.

And there's no chance of confusion to the consumer, as 1) the consumer is probably looking at the label anyway, and 2) though Westmalle does come in a 75cl corked bottle, that bottle doesn't have the raised ring! Nor do New Belgium's large corked bottles (La Folie, for example) come with the raised ring.

However, it is possible that the monks might have some sort of protection under treaty or international convention, TRIPS for example.

Just goes to show how murky IP issues can be, and, in Brooklyn's case, how sometimes they're just not worth fighting over.

Is it illegal to drink and vote?

2008-10-21T08:18:00.000-07:00

Came across this article. Apparently an Albuquerque woman was so intoxicated that she passed out at a polling station, causing confusion to the police over whether that was illegal or not. Normal citations aside (Drunk and Disorderly, Creating a Nuisance, etc.), is it illegal to vote while drunk? I poked around quickly, didn't come across much. Apparently in Illinois, intoxication doesn't qualify you for voting assistance at the polling booth, so you're on your drunken own when it comes to checking those ballot boxes. I would assume there's general requirements of mental capacity to vote in most states, but usually those are tacked on to some kind of court ordered guardianship.

So it's probably not illegal to vote drunk, just stupid. And traditional. Looking to history, back in the day elections were a time for everyone to come out of the countryside to the towns. There they'd have a big party, usually put on by one local party or politician, and everyone would eat and discuss and drink, and then go vote for their swell host. It's in this tradition that we host our own Election Day party every two years, I just hope most of my guests drink after they vote... :)

No word yet whether New Mexico counted the Albuquerque woman's vote for: "Thhhe one wiffth tha thiiings. 'You knowwwww, the thinngsss onnnn. I likes himmm. *hiccup* *THUD*"

Does it Matter? (2)

2008-10-08T15:35:00.000-07:00

Looks like the results of Papazian's online poll are up.
Summary of the results (as of Oct 3):

5, 264 votes were cast.
51% of voters replied that it did not matter who made the beer they bought.
49% of voters replied that it did matter to a significant extent who made the beer they bought.
150+ comments were submitted to Fark.com.

Oh Fark... it's like the Argument Clinic sketch from Monty Python. Twentyfour-seven.

But Charlie puts the problem well:

Americans enjoy the best choice of beers available anywhere in the world. It’s my opinion that in this day and age of company consolidation, big box retailers, large grocers and ever growing large brewing companies, the diversity and choice beer drinkers enjoy today – is a becoming a very very fragile situation.

It’s hard to explain this to the average beer drinker. Here’s one point that’s worth making: Access to market remains a difficult proposition for small and independent brewers. Large brewers through their distributors dominate the decisions determining which beer brands get shelf space and how much shelf space they get. Distributors also significantly influence restaurateurs and the choices they make about what beer is served on the limited number of draft beer tap handles.

To the beer drinker it may seem logical that availability of a particular beer brand is based on consumer demand or profitability. But this is often not the case. Many beers receive shelf space or are delegated a tap handle because of the financial muscle a company can apply to force a decision upon the seller. Small and independent American brewers are often denied access to market due to these dynamics; regardless of consumer demand.

Could he be laying the groundwork for a push for increased specificity in labeling? If so, with Pete's Brewing v. Whitehead to contend with he is definitely moving in the right direction.

Monday Morning Roundup

2008-10-06T09:13:00.000-07:00

1) Playboy Wine

First up, Playboy has entered the wine game. Looks like they're paired with the wine.com guys and offering a wine a month. Soon everyone will have their own label wine... The first four are Cab Sav, from reputable vineyards as well. They range from $90 to $380, and apparently you will be able to buy all 12 for $1500 in September.

What's interesting about this is how hard they must have worked to get their labels approved. You can just see the label approval agent, "Playboy wine? Where'd I put my 'DENIED' stamp?" Pretty much every liquor board and the TTB have restrictions on lewd labeling, either by statute or practice. Obviously none of these labels are particularly scandalous, looks like they used 1960's centerfolds.

Just like Friday the 13th Part 1: pretty tame by today's standards...

2) News from England

Interesting articles on the BBC. First is about the relative plight of teetotalling college students at British universities. Interesting considering the U.K.'s growing problem with underage drinking and youth alcoholism. Second is that the UK has rejected calls to lower the drink-drive limit from 80 mg/100 ml to 50mg. That limit would have been about half a pint of beer.

3) Wine Spectator: Mobile

Wine Spectator has announced a new service specifically designed for use in PDAs, allowing you to look up wines and check ratings on the go. You know, so you can be that guy.

4) French fear worst wine sales since 9/11

Wine seems to be taking a hit, at least imports, but what about beer? I've been wondering: is beer recession-proof? Maybe I'll write more about it later, but for now here' s an article from the Washington Post.

5) How can it be the original source Pilsner if it's from Russia?

Article from the Prague Monitor about Pilsner Urquell being brewed in Poland and Russia. The author, Evan Rail, takes issue with a beer that literally translates as Pilsner Original Source being brewed in Russia and Poland. It gets to the heart of a problem faced by traditional beers: are they a style, or are they a place? Guinness, for example, is associated with Dublin. It's brewed there as well. But it's also brewed in regional breweries all over the world. So it's more of a brand. But take Newcastle Brown Ale. It had to relinquish it's PDO (Protected Designation of Origin) status in the E.U. after moving its brewery across the river Tyne, just outside the boundaries of the city of Newcastle. So you've got place.

Where does Pilsner Urquell stand? I lean toward brand, because it's associated the world over with being the "original" pilsner. It's the original source alright. But then, I'm not Czech, and the Czechs are very attached to their national pivo. After all, they staked out the first PDO for hops, Zatecky Chmel (Saaz hops) and several of their beers (Budweis) carry PDO status. So maybe pride has something to do with it too.

Of course, to be have the type/class designation of Pilsner in the U.S. it has to be be brewed in either the U.S. or the Czech Republic. Everything else 'must include the word “type” or “French” or other adjective or statement, e.g., “Brewed in France,” indicating the true place of production'. I don't think the Russian and Polish Pilsner Urquells are destined for the United States, but it would be interesting if they had to be labelled Pilsner Urquell - Brewed in Russia.

Japan!

2008-10-02T08:12:00.001-07:00

I am thoroughly convinced that Japan produces 95% of the strangest things in the world.

It's weird, it's wonderful, and it's all so very... Japanese. I've never been there, sadly, but perhaps when a former housemate gets married. He's currently in an omiai (speaking of uniquely Japanese). His boss is basically forcing him into an arranged marriage.

When it comes to alcohol, Japan has many social norms that are wildly out of sync with the U.S. And it's perhaps illustrative to view a few examples, if only to think about just how unlawful/impractical/unimaginable such things might be in the U.S. Here's just a couple examples.

Example 1: Bottle Keep. From Lisa Katayama's blog Tokyo Mango. Apparently there is a tradition of regulars in Japanese bars purchasing bottles of sake and just store them at the bar, taking a glass whenever they come in. Each person gets a little tag that stays on the bottle and identifies it as theirs. Would this work in America? Mmmm, no I'm thinking... I've got a personal mug that hangs at the Titanic, but I don't think 1) they'd be willing to put up with the storage space requirements if I wanted to store bottles, 2) they make more money selling glasses of wine that bottles of it, and 3) I have no faith that the collective sense of social propriety in the US would in any way prevent moochers from drinking my bottle while I was gone. At least if anyone "borrows" my mug it'll get washed before it's put back on its hook...probably.

Example 2: Kids Beer. Via Fermentarium. Beer for kids! No it's not actually beer, per se, it's a brown, foamy tea-based drink aimed at kids. The commercials are great, and can be viewed here on the company's website. Alcohol advertising to kids? Candy cigarette anyone?

Example 3: Micros! It used to be that if you wanted a Japanese beer you had a choice between Asahi, Kirin, or Sapporo. (Ok, so there are a few other smaller ones as well.) Reason being, in order to get a license to brew in Japan you had to produce over 2 million barrels a year, meaning only big industrial conglomerates could brew.

In 1994, the rules were relaxed and micros began to appear. On a return from a recent trip home, my housemate brought a horizontal flight from Baird Brewing, an American style micro started in Numazu by American Bryan Baird and his wife Sayuri. The beers were good. There was a wheat, a pale, an IPA, a brown, a stout, and a porter, and if I had one observation it was that the hops tasted a little strange, perhaps they use New Zealand varieties? My wife is also fond of the Hitachino Nest beers, although the adorable owl on the label probably has something to do with it. But beers like this bode well for the micro movement in Japan.

Not that American Micros don't make it over. I managed to snag a bottle each of Rogue's White Swan and Red Fox beers, brewed for Newport's sister city in Japan. Not to mention Rogue's Morimoto beers: the Imperial Pilsner, Black Obi, and Soba Ale.

Image from http://hoosierbeergeek.blogspot.com. (I'm not at home to take a photo of my bottles!)

Example 4: Suntory. I can't think of Japanese whiskey without thinking of Bill Murray in Lost in Translation. They make a fine whiskey, and are one of the oldest alcoholic beverage companies in Japan.

"Santori Time"

Example 5: Bartenders. This article from last month's Bon Appetit says it all, though there's also a great segment in the Tokyo episode of Anthony Bourdain's No Reservations. Cocktail-do is taken very, very seriously. The thought of a bartender on South Beach putting even a fraction of that effort into a drink is hilarious.

Finally, for good Japanese food in Miami go to Matsuri or Maido. An unsolicited plug because both these restaurants are amazing.

Does Ownership Matter? Pete’s Brewing, Beer Labelling and Trade Names

2008-09-30T08:10:00.000-07:00

Does ownership matter?

Charlie Papazian, President of the Brewer's Association, asked that question in last Thursday's AHA TechTalk newsgroup. It gets to the heart of a problem I've been thinking about, one that gets to the heart about how people feel about beer, and the responses from the homebrewers have been varied and interesting.

The email is below:

----------------
From: Charlie Papazian
Sent: Thursday, September 25, 2008 12:03 PM
Subject: Does It Matter?

I think there is an ongoing debate about whether beer drinkers really care about where their beer comes from. Does it really matter that Blue Moon is made by MillerCoors? Does it matter that Pilsner Urquell is made by SABMiller? Does it matter that German brewed Becks and Diebels Altbier, Belgian brewed Hoegarden and Leffe, English brewed Bass and Boddington, Australian brewed Castlemaine XXXX, Irish Murphy's and Canadian Labatt, and likely soon Budweiser are all under the ownership of the Belgian/Brazilian world brewing corporation Inbev?

We are all beer drinkers. That said, we all have our reasons for choosing the beer we love to enjoy. Whether we realize it or not, we all think about it in one way or another. At the very least we owe it to ourselves to be knowledgeable about the beer we spend good money for. I’m wondering whether these things matter to American Homebrewers Association membership.

What's Next? The Great American Beer Festival - October 9-11, Denver, Colorado

See my page at www.Examiner.com

Charlie Papazian

President
------------

My response is that it obviously is going to matter to some, so the real question is how much does that count for? People buy a beer or wine for a variety of reasons: price, style, year, geography, location on the shelf, nostalgia, habit, image, or simply that they like the yellow kangaroo on the bottle. Some people harbor grudges against large breweries, either because of taste, or image, a preference for local over global, or simply because it's hip to fight The Man. Some people take issue with the advertising, practices, or politics of certain companies and will not purchase from them for ethical reasons. Point is, people will buy or not based on many factors and I believe they should be given enough information to make an informed decision should they wish to.

If they want to buy the one with the kitty on it then they are free to do that too.

I personally want as much information as possible about any beer I am considering buying. However, the brewing industry makes extensive use of trade names so it is often difficult or impossible to tell who owns a particlular beer simply from the label. Case in point, and I admit a personal peeve of mine, AB's Stone Mill Organic Pale Ale. The labels don't show Anheuser's name anywhere. The brewery is identified as Green Valley Brewing, Merrimack, NH. Of course, Merrimack, NH is home to one of AB's regional breweries and is indeed where Stone Mill is brewed.

Part of the problem here is that craft brews have built a reputation for quality and creativity, based on small production runs and more expensive ingredients and practices. To a first time purchaser however, the only indication of future quality comes from the bottle's label. If the label has a 'micro' look to it, it will be assumed that the all the expectations one has about what goes into making a craft brew will be in the final product. Not that it was made in a 100,000 barrel system, with non-organic hops, and is loaded with rice. The craft brew industry gets by on the quality of its product, and the image of small brewers, working in small batches, making what they like to make. If that image is appropriated through misleading labels and marketing, consumers are suckered and the small brewers lose their competitive advantages.

Note that the taste or quality of the faux-micro is irrelevant to this. It could be a great beer, but it's still using an image it didn't earn and doesn't deserve. Look at the Stone Mill label again, and think about what that label implies. There's a quaint stone mill, a running fresh stream, lots of foliage. The real Merrimack plant is an enormous industrial park. This is not to say it should be required to have the plant pictured on it, but only that when a company makes a claim about small batches or traditional preparation, it back it up. For example, on French wine labels you cannot use the picture of a chateau that isn't actually on the land where the vineyard is.

Speaking of wine, this problem exists in the wine industry as well. Every winery wants to sell its "story". Typically it runs something like this: a family winery that makes wine because they love it, and want to make the best small batches of wine they can, in the best traditions of the Old World. It could be argued that by purchasing a wine you are "buying into" this "wine story", so that when you drink the bottle you imagine that pastoral setting and appreciate the individual care given to that wine over its lifetime. This is all part of the experience, and probably makes drinking the wine that much more pleasurable. The fact is there are actually wineries like this, and they are understandably perturbed when a producer markets its 500,000 case wine as 'So-and-So Family Winery', with a label that typically has a quaint old farmhouse or chateau of some sort.

One possible solution would be to require that the name of the brewer who bottles and packages the beer be on the label and in advertising, and to provide that a trade name or fictitious name may not be used to replace the name of the brewer on labels and in advertising. So for example So-and-So Family Winery would be required to have its owner, Omni-Corp Int'l., on the back label.

This was tried a decade ago on the state and federal levels and was ultimately unsuccessful. However, the failure is itself instructive and lends some perspective on how labeling might work.

PETE'S BREWING

In early 1996 Anheuser-Busch lobbied the Missouri state legislature to pass a bill requiring labels to state the true owners of the facility where beer was produced. The Missouri Legislature subsequently passed Senate Bill 933 which was codified as Missouri Revised Statute § 311.360.2. (Supp.1998). Section 311.360.2 provided:

Any malt liquor which is offered for sale in this state and manufactured at other than a facility owned by the person whose name appears on the label of the container shall include on the label the name and location of the owner of the facility which produced and packaged the malt liquor. This subsection shall become effective January 1, 1997.

In order to further clarify the terms “owner” and “facility” the Supervisor of the Missouri Department of Liquor Control filed an emergency amendment and permanent amendment to 11 CSR 70-2.060, which stated:

[I]f the name of the brewer or manufacturer of malt liquor which appears on the label is not the owner of the facility where the malt liquor was brewed or manufactured, then the name, owner and address of the facility shall also be set forth on the label.

“Owner” was defined for purposes of the regulation as:

(7)(B) An “owner” of a facility which brews or manufactures malt liquor is defined as a person, corporation, limited liability corporation, partnership or other legal business entity, who holds the entire facility in fee simple, or has a leasehold interest for a term of years in that entire facility, and is the person or business entity licensed for that entire facility by either or both, the state within which the facility is located and/or the United States Federal Alcohol Administration.

These regulations specifically addressed contract brewing and trade name usage in the brewing industry. Any beer brewed for another brewing company under contract would be forced to disclose the facility where the beer was brewed, while breweries using trade names would be forced to disclose the parent company that owned the brand. For example, Pete's Wicked Ale which was made by Pete's Brewing Co., but was brewed at a facility owned by Stroh's, would have to place Stroh's name on its label. Regarding trade names, Miller (not yet Miller Coors) would have had to place the name Miller on its Plank Road products Red Dog and Icehouse.

At the same time, Anheuser-Busch and a consortium of regional microbrewers petitioned the Bureau of Alcohol, Tobacco and Firearms (BATF) to initiate a rulemaking proceeding seeking a similar change on a federal level.2 Signing onto the petition along with Anheuser were Widmer Brothers Brewing Company, of Portland, OR; Hart Brewing Inc., of Seattle; Full Sail Brewing Company of Hood River, OR; Redhook Ale Brewing Co., of Seattle, and the Oregon Brewers Guild, of Portland. Interestingly, each of these breweries was at the time a regional microbrewery, similar in scale to Pete’s Brewing and Sam Adams, though each of these breweries actually owned their own facilities. The Oregon Brewer’s Guild represented the interests of many smaller Oregon Breweries, which often did not distribute outside of the state.

The reasons cited for this rulemaking were, outwardly, well-intentioned. "This is a dollar and cents issue for American beer drinkers," said Paul S. Shipman, president of Redhook. "Consumers are being misled. They are literally buying into an image ... paying higher prices for some brands without really knowing who actually brews their beer. Beer drinkers should get all the information they need to make informed choices."4 The request cited claims by Sam Adams and Pete’s that their beers were "brewed in small batches with only honest ingredients" and Sam Adam’s invitation "to visit us at our small traditional brewery ..." Regardless of whether or not these claims amounted to mere puffery, at least a prima facie argument could be made that consumers were being misled.

Meanwhile, in Missouri the Department of Liquor Control began trying to enforce Section 311.360.2. Trouble began in November, 1996, when the state notified Pete’s and Miller that some of their labels might not be in compliance. This was the first notice these companies received, even though enforcement of this statute was scheduled to begin in twenty-one days. Rather than submit new labels they filed a federal lawsuit seeking an injunction from enforcement of Section 311.360.2.5

While the lawsuit in Missouri was progressing, the attempt at the federal level was failing as well. Though outwardly calling itself a consumer protection measure, the petition was beginning to look more like an attempt by Anheuser-Busch to stifle competition. Consequently, in May, 1997, the Oregon Brewers Guild (OBG) sent a letter to the BATF withdrawing their support for the petition. Mike Sherwood, Executive Director of the OBG stated that "The Guild's primary function is to promote craft brewing in Oregon. It appears that our goals of promoting truth in labeling may be in conflict with Anheuser-Busch's intent with this petition.” Gary Fish, founder of Deschutes Brewing Co. and President of the OBG said, "The petition has been used to create acrimony and disharmony in the craft brewing industry. This was never the intent of the Guild. The Oregon Brewers Guild will continue to promote the voluntary listing of the 'brewery of origin' on the label by all breweries."6

In its opinion issued September 10, 1998, the court in Pete’s Brewing agreed with the Plaintiff breweries’ contention that § 311.360.2 violated the Dormant Commerce Clause.7 Citing SDDS, Inc. v. South Dakota, the court noted that a state law may discriminate against interstate commerce on its face, in its purpose, or in its effect.8 Even if a state law does not overtly discriminate against interstate commerce, it may nonetheless be contrary to the Commerce Clause if it unduly burdens interstate commerce.9 Non-discriminatory state laws, however, are subject to a less rigorous balancing test. The court cited Pike v. Bruce Church, Inc., arguing that such a law “will be upheld unless the burden imposed on ... commerce is clearly excessive in relation to the putative local benefits.”10

With the analysis laid out, the court set out to prove discriminatory effect, purpose and/or intent. The court relied heavily on Hunt v. Washington Apple Adver. Comm., (a statute has a discriminatory effect if it raises the cost of doing business for out-of-state producers but does not raise the cost for in-state producers) and Exxon Corp. v. Governor of Maryland, (statutes which “raised the cost of doing business for out-of-state dealers, and, in various other ways, favor[ ] the in-state dealer in the local market” have a discriminatory effect.)11

The statute’s impact on out of state brewers was clear. There was no evidence to suggest that a single Missouri brewer would have to change its labels. The three biggest brewers in Missouri, which accounted for 99.8% of the Missouri-brewed beer sold in the state, would not have to change their labels.

The court analogized this to the situation in Hunt. In Hunt, Washington State apple growers were being forced to change the label on boxes of apples sent to North Carolina. The apple producers were left with three choices: “obliterate” the prohibited writing on their old labels, develop labels only for use in North Carolina, or change all of their labels to accommodate North Carolina's law. The court argued that beer producers and importers in this case were faced with almost identical considerations and burdens. Brewers could develop Missouri only labels, resulting in higher costs. They could change all of their labels to meet the Missouri statute, which, the court stated, might lead to market confusion and competitive disadvantages in other states. Finally, they could simply stop selling their products in Missouri.

Quite apart from the increased cost of doing business, the court noted that the statute would also deprive out-of-state producers and importers of marketing advantages. The court cited Hunt, noting that in that case, the statute was unconstitutional in part because it stripped the Washington apple growers of the economic advantages they had established through their own grading system.12 In Pete’s Brewing, the statute stripped Plaintiffs of the brand equity they had built up through advertising and trade names. The opinion argued:

The public may associate a brewery owner's name with completely different product qualities of brand identity than the brewer. This compromises the effectiveness of competitive strategies which the Plaintiffs feel best meet their business needs. These competitive strategies include the use of trade names to create distinctive brands and broaden the product's appeal, and the use of other companies' factories to avoid the expense of buying or building a brewery. Though legal in every state, Missouri brewers do not employ these competitive strategies and they would benefit if other out-of-state brewers were prevented from being able to use them.13

The court found that both the increased costs to out-of-state brewers and their potential loss of brand equity were sufficiently of the type of burden found unconstitutional in Hunt.14

The court next looked to whether the in-state brewers were benefited by the statute. Here the overbearing manner in which Anheuser-Busch had pushed for the law was used against it. Apart from the competitive advantages mentioned above, the court took Anheuser’s aggressive support for the bill as evidence that it derived a benefit from the statute. In a particularly damning piece of evidence, Anheuser’s goal of removing its rivals was made perfectly clear to the court.15 The court looked not just at the discriminatory effect of the statute but considered evidence of discriminatory purpose. Testimony by administrators and the legislative history of the bill clearly showed that the statute was a product of Anheuser-Busch’s lobbying. There was no evidence that consumers had been complaining, or that the statute advanced a legitimate state interest. The court subjected the statute to strict scrutiny and it was summarily found to be an unconstitutional violation of the dormant commerce clause.16 Alternatively, the Court found that § 311.360.2 failed even the more flexible balancing test set forth in Pike.17

The Defendants argued that the statute could be saved by § 2 of the Twenty-first Amendment.18 The Supreme Court has recognized that the Twenty-first Amendment provides an exception to the limitations of the dormant Commerce Clause in certain situations. The court relied heavily on the “balancing” aspects of Brown-Forman Distillers Corp. v. New York State Liquor Authority and Bacchus Imports, Ltd. v. Dias in its analysis of the aims of the statute versus its impact on interstate commerce.19 Ultimately it decided that the statute did not adequately support any of the core temperance goals of the 21st Amendment.20 The injunction was issued and statute was not enforced. After Pete’s Brewing, the petition for rulemaking to the BATF died as well.

At first glance, it would seem that Pete’s Brewing forecloses the entire idea of requiring labels to state the actual brewing facility. However, the context in which this law came to the court must be taken into account. Based on the patently obvious way that § 311.360.2 was a product of Anheuser-Busch lobbyists, and on its near exclusive benefit to the largest brewery in the country, the court was understandably suspicious. The success or failure of any such regulation is entirely dependent on the reasons proffered for its existence and the evidence used to support its effectiveness. In Pete’s Brewing there was simply no reason offered that could dispel the impression that the statute was passed solely to benefit Anheuser-Busch.

However, in the case of interested craft brew consumers, Pete’s Brewing is essentially inverted. Instead of the largest brewery fighting its next two rivals, it is a case of smaller brewers and consumers against the Big Three. Ten years ago, Anheuser didn’t have any faux-craft brews, and now it has several. Meanwhile the industry has continued to grow, and the base of educated consumers has grown. In many states, there are no remaining major breweries, but there is a thriving craft brew industry. A well lobbied campaign, run by consumers and small brewers could address many of the reasons Pete’s Brewing came out the way it did. Studies and rallies conducted by a consumer group could be used to support a claim of legitimate public interest.21 Intrastate regulation would be an easy way to begin, as a state would be well within its power to require in-state brewers to provide detailed labels.

If a state was legitimately interested in more extensive origin labeling, it would have to emphasize the public interest served by informing consumers. They would have to provide evidence that the cost of redesigning labels was minimal. The statute should be worded such that the name brewery or trade name is on the bottle as well as the production brewery, in order to lessen the impact on the brand equity of the trademark. For example, trade names could be allowed on the front label, but the back label must specify the actual brewing company as well. This would let interested consumers inquire while minimally impacting the presentation to uninterested consumers.

Finally, this suggested regulation is, of course, just that: a suggestion. The practical complexities of the brewing industry, the lobbying power of the major breweries, the fractious nature of the craft brewing industry, and the byzantine complexities of United States alcohol law all might well prevent such a regulation from ever happening. However, this analysis suggests that were there to be a will, there would be a way.

-----------------------------

¹It is interesting to note that, at the time of this litigation, Pete’s Brewing did not in fact have any facilities of its own, a fact used proudly in its investment prospectus. Similarly, Sam Adams retained its original Boston brewery, but due to volume limitations had ceased to brew all but its experimental and premium beers there. The brewery’s flagship Sam Adams Boston Lager, distributed throughout the US, was contract brewed in various locations around the country.

² Letter from Patrick T. Stokes, President, Anheuser-Busch, Inc., et all, to Brad Buckles, Deputy Director, BATF, Re: Truth in Beer Labeling/Petition for Rulemaking (Jan. 25, 1996) available at http://www.thefreelibrary.com/Brewers+seek+new+federal+rules.-a017863701

³ To give an idea of how complex these ownership problems can become, of these original regional breweries: Redhook purchased Widmer in 2007, though Anheuser-Busch retained its prior minority interest in both companies and its exclusive distribution agreement; Hart Brewing became Pyramid Brewing and was purchased by Vermont-based Magic Hat Brewing in 2008; Full Sail actually became employee-owned in 1999, but does contract brew for SABMiller under the 150 year old Henry Weinhard’s label, which Miller acquired from Stroh’s in 1999.

⁴ Brewers Seek New Federal Rules, BUSINESS WIRE, Jan. 25, 1996, available at http://www.thefreelibrary.com/Brewers+seek+new+federal+rules.-a017863701

⁵ Pete's Brewing Co. v. Whitehead, 19 F. Supp. 2d 1004 (W.D.Mo., 1998).

⁶ OBG WITHDRAWS BATF PETITION, BEE RWeek, May 12 - 19, 1997.

⁷ U.S. Const. Art. 1, § 8, cl. 3

⁸ SDDS, Inc. v. South Dakota, 47 F.3d 263, 267 (1995).

⁹ Id. 47 F.3d at 268.

¹⁰ Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).

¹¹ Hunt v. Washington Apple Adver. Comm., 432 U.S. 333, 352 (1977). Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 126 (1978).

¹² Hunt, 432 U.S. at 351-52

¹³ Pete’s Brewing at 1012.

¹⁴ Id. at 1014.

¹⁵ “On November 17, 1997, A-B sent a letter to all Missouri wholesalers. The letter highlighted the fact that the Missouri Supreme Court had just upheld § 311.360.2 and went on to state: In other words, retailers will also be in violation of this law if they sell any non-complying products. There is a possibility that this will create a shelf-space opportunity for us as some of these products are eliminated from the Missouri package mix. In particular, you should target the following brands if their labels are not changed: Samuel Adams, Pete's Wicked Ale, Red Dog, Icehouse, Blue Moon. Please cover this topic with your sales force during upcoming sales meetings and take advantage of any opportunities as a result of competitive brand fallout in the market place.(Ex. 315).” Id. at 1014, FN9.

¹⁶ Id. at 1017.

¹⁷ Pike at 142.

¹⁸ Section 2 states “The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.” U.S. Const., Amdt. 21, § 2.

¹⁹ Brown-Forman Distillers Corp. v. New York State Liquor Authority, 476 U.S. 573 (1986). Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 (1984).

²⁰ The Court must inquire “whether the interests implicated by a state regulation are so closely related to the powers reserved by the Twenty-first Amendment that the regulation may prevail, notwithstanding that its requirements directly conflict with express [federal] policies.” Bacchus at 275-76.

²¹ Perhaps along the lines of the United Kingdom’s Campaign for Real Ale (CAMRA) http://www.camra.org.uk/

The Deal Goes Through: Hello Anheuser-Busch InBev

2008-09-29T07:20:00.000-07:00

InBev shareholders approved the $52 billion takeover of Anheuser-Busch this morning. Looks like the new company name will be Anheuser-Busch InBev, and it will be the largest brewer in the world.

By far. Fifty percent of the US market, ten percent of Russia and China.

What has been most interesting to me about all this is not that one large brewery would combine with another (Miller-Coors, or Heineken's growing empire of brands) but the reaction by some that AB is somehow a "national" brand. You hear talk of 'monopoly!" and "they're going to Belgianize Budweiser!" (If only!) It's interesting that only now are people screaming monopoly.

You cannot understand the meaning of the 21st Amendment and the resulting caselaw without an understanding of the history behind it. The big brewers, AB, Coors, Miller, Pabst, etc., were all in operation before prohibition and their growing power and influence was one of the justifications for prohibition. People feared the concentrated influence and capital of the big brewers (just as they feared the power of other industrial Trusts at the time). In 1933 the three-tier distribution system was theorized by Fosdick and Scott to disrupt the power of these monopolies, as was anti-tied-house legislation. (Btw: Fosdick and Scott is an amazing read, too bad the only print copies for sale on Amazon start at $250...some day!)

The post-prohibition story of American beer has been one of consolidation and homogenization. From thousands of local breweries prior to Prohibition, the national brewing landscape by the end of the 1970s consisted of 44 breweries. So now we come full circle and are facing a scale of monopoly in the large breweries that the prohibition-era lawmakers could never have dreamed of. What will be interesting to see in the coming years is whether the laws that resulted from the 21st Amendment can still achieve their original goals (whatever the courts may currently state those to be...) in the face of what is now the third largest consumer product company in the world.

And do we still want them to?

Democratic Participation for the day

2008-09-29T07:12:00.000-07:00

Right, so it's time for some posts.

Up first: I spent some time this morning to contact my House Representative to thank him for sponsoring the Webcaster Settlement Act of 2008, and my senators to urge them to support the Senate vote on it. The bill is HR 7084 (in this instance the Senate is voting on the House number). My democratic good deed for the day.

Technological progress on the internet requires a reasonable approach to copyright and royalties. Under the current system it is cost-prohibitive to run an internet radio station, and unless the current practices are settled in an equitable manner between the copyright-holders and the stations, this branch of the internet will wither. Personally, I have Pandora running most of the time I'm by a computer (such as right now!), and my wife prefers to listen to Seattle's local NPR music station on the web, as Miami's is kindof terrible.

"One of these things is not like the other..."

2008-09-17T18:18:00.000-07:00

From Stan Heironymus' Appellation Beer

I really like this photo, it says A LOT about the current beer world.

Corona: Miles Away From Ordinary.

And Mexico.

States try to pull the plug on Sparks

2008-09-17T17:42:00.000-07:00

Apparently 25 states have asked MillerCoors to give up plans for an upcoming caffeinated alcohol drink called "Sparks Red". It seems that the AGs of those states consider an 8% ABV malt beverage loaded with caffeine, guarana, ginseng and taurine to be a "recipe for disaster".

Well, yeah. Obviously. Because the only thing worse than a drunk underage driver is a jittery, paranoid drunk underage driver.

But what is interesting about this is that it's not really a novel idea. Irish coffee anyone? Or take Vodka and Redbull, a popular combination out in clubland for years. By volume, (and I'm just guestimating here) it seems like you'd have much them same levels of alcohol, caffeine, guarana, etc. in a double vodka redbull as in one of these cans. Not to mention all the sweet sweet high fructose cornsyrup...

However, Redbull and Grey Goose don't actively market their potential combination, whereas it seems obvious that Sparks is aimed at a, erm, "younger demographic". Traditional ground for liquor control, and one that still has some cache. Alcopops, or "Malt Beverages", typically occupy a weird legal netherworld where they're not quite beer, not quite hard liquor, and typically taxed and regulated more loosely. Which is why Smirnoff Ice in the United States is a "Malt Beverage", taking much science and work to become beer that doesn't taste at all like beer while in Europe they just add cheap vodka to fruit juice. The demographics are typically youth oriented, and aimed at those who wouldn't normally drink beer but are in situations where something cold and fizzy and refreshing would be perfect. The wine cooler set. Sparks it seems would be particularly aimed at clubs and party situations. And teenagers like parties, right?

Another shot across the bow in the Alcopop wars, and one MillerCoors may lose. Anheuser-Busch was slapped for their underage marketing practices back in June for much the same thing.

The First Post

2008-09-15T07:56:00.000-07:00

So there have been several people who have bugged me to start a blog, and to them I say: "Well ok then."

My goal with this is first and foremost to be a place for me to write about my research project this semester, both to help me organize my ideas and to keep a record of the process. I am researching conflict between the 21st Amendment and the Supremacy Clause of the Constitution. In short, what happens when the 21st amendment appears to grant control of alcohol to the states, but a federal law is in conflict with those state laws? The focal point of the article is a case currently before the Federal District Court in Santa Fe, NM, US Airways, Inc., v. Lopez (6:2007cv01235). Essentially, US Airways is seeking an injunction against the State of New Mexico regarding the state's insistence that the carrier hold a liquor license to serve alcohol over New Mexican airspace. The implications for an airline victory here could be huge. A full writeup of the facts of the case and my initial impressions will be posted soon.

Hopefully, some of it will be of interest to others as well. There is a lot of caselaw to re-read, and I hope to publish short casenotes on some of the more important Alcohol Law cases as I look into their applicability. I will also post interesting updates about the alcohol industry, such as the InBev stockholder vote on the AB merger that should take place on the 29th.

Secondly, I want this to be more than just a legal blog and of interest to friends and family as well. So I'll be adding posts about other things that are going on in my life. It could be records of brewing sessions, reviews of commercial beers and homebrews, stories from law school life, photo records of weekend trips around South Florida, records of my ongoing charcuterie experiments, and who knows what else.

I have been thinking of starting this blog since last year, but between school and work I haven't had the time. This year is much more open, so I hope to post fairly regularly. Whenever I get some time at home. For example, today I am home with Ase because he snagged and ate an entire RitterSport (one of the corn flake ones! Wrapper and all!) and I am dealing with a sad-looking-and-occasionally-violently-ill mutt. Ah the joys of dog ownership...