FEDERAL AFFAIRS

The National Beer Wholesalers Association (NBWA) represents the 3,300 licensed beer distributors with operations in every state and congressional district throughout the United States. America’s beer distributors are local, independent businesses and leaders in their communities.

The United States today benefits from a state-based regulatory system for alcohol which was created more than 75 years ago as Prohibition ended. The 21st Amendment granted individual states the primary authority to regulate alcohol within their borders. While the federal government plays a role in alcohol regulation, it is the state-based system that maintains an orderly marketplace and effectively controls the production, distribution and sale of alcohol. This successful model established an independent three-tier system for alcohol distribution consisting of a supplier or producer, a distributor and a retailer.

Legislative issues of importance to NBWA include:

The CARE Act

NBWA supports state-based alcohol regulation and the Community Regulatory Effectiveness (CARE) Act, H.R. 1161. The CARE Act recognizes and reaffirms that alcohol is different from other consumer products and that it should continue to be regulated by the states. The 21st Amendment to the U.S. Constitution gave rise to a state-based sys tem of regulation that effectively balances community attitudes about alcohol with healthy marketplace competition and vast consumer choice. This is why today’s system allows businesses to grow. The majority of Americans believe state and local governments should decide how alcohol is sold in their communities. For more information about the CARE Act, visit www.thecareact.org.

Swipe Fee Reform

NBWA opposes any legislation that would amend, repeal or delay swipe fee reform. Credit and debit card swipe fees are an enormous cost for merchants and consumers. Initially charged by large banks, swipe fees are passed through to merchants and ultimately consumers. It has been estimated by one group that the average American household pays hundreds of dollars in swipe fees every year. Nearly $2 of every $100 consumers spend when they pay with credit or debit cards goes directly to large banks.

The Dodd-Frank Wall Street Reform and Consumer Protection Act that passed in 2010 required the Federal Reserve to implement rules requiring swipe fees to be reasonable and proportional to processing costs. NBWA helped to successfully defeat a bill that would have delayed implementation of a proposed rule to cap debit fees.

Last-In, First-Out (LIFO) Accounting

Many beer distributors use the last-in, first-out (LIFO) method of accounting to value their inventories. This well-established and widely-accepted accounting method, which was put into place by Congress more than 70 years ago, tracks costs and accurately measures income for tax and financial reporting purposes. The President’s Fiscal Year 2012 Budget and the National Commission of Fiscal Responsibility and Reform include a proposal to repeal the use of LIFO. Repealing LIFO would shift decades of accumulated LIFO reserves into taxable income. This significant impact to family businesses that have used LIFO for generations could result in job losses and decreased capital spending and investment. NBWA asks Congress to oppose any efforts to repeal the use of LIFO.

Jobs and Federal Excise Taxes

Beer distributors serve every congressional district across the country and provide quality jobs, solid wages and good benefits for nearly 100,000 hardworking men and women. Although the economic contribution by the beer distribution industry is significant, industry volume sales have been down for the past two consecutive years. Sales have slumped as a result of high unemployment and economic uncertainty. NBWA supports federal policies that work to create jobs and put American men and women back to work. In this fragile economic recovery period, raising federal excise taxes on such discretionary products as beer would have a significant impact on beer industry jobs in every community across the country.

TTB Oversight

The Alcohol Tobacco Tax and Trade Bureau (TTB), a federal agency under the U.S. Department of Treasury, is an important part of ensuring an effective regulated system for alcohol. It collects alcohol excise taxes, ensures an effectively regulated marketplace and enforces trade practices that maintain a level playing field for all market participants. NBWA believes TTB should be fully funded because it is an integral part of efficient revenue collection and ensures that our nation’s alcohol regulatory marketplace remains the safest and most effective in the world.

A Drink is Not a Drink

The U.S. Department of Agriculture’s 2011 Dietary Guidelines for Americans includes a definition of an alcoholic drink that could be misleading and dangerous to American consumers. Most Americans think of a cocktail as “one drink.” A cocktail often contains a combination of more than one type of alcohol. For example, a margarita contains 1.5 ounces of tequila and 0.5 ounces of triple sec. A cosmopolitan contains 1.5 ounces of vodka and 1 ounce of Cointreau. These popular “drinks” contain more than 0.6 fluid ounces of alcohol which is defined as “one drink” by USDA’s Dietary Guidelines. It is dangerous to suggest that if a person has one beer, one glass of wine or one cocktail per day, he or she is consuming a moderate amount of alcohol.

Alcohol by volume (ABV) is a world-wide standard measure used to determine how much alcohol is contained in an alcoholic beverage. It is expressed as a percentage of total volume of the drink. Beer, wine and liquor differ greatly in ABV content. Despite the variation in alcohol by volume content among alcohol types, based on the USDA Dietary Guidelines definition, American consumers are lead to believe that all “drinks” are equal. Consumers should know that the type of alcohol, the individual filling the glass and the size of glass determines the actual amount of alcohol a person is consuming. NBWA encourages Congress to ask the U.S. Department of Agriculture to review its misleading definition of a “drink.”

Hours of Service

Beer distributors are responsible for safely and effectively delivering their products to licensed retailers throughout their communities. Delivery drivers typically operate within a 100 mile radius making multiple delivery stops and returning to the warehouse at the end of the day to end their shift. They also receive two consecutive days of off-duty time per week. When it comes to Hours-of-Service Regulations, NBWA commends the Federal Motor Carrier Safety Administration (FMCSA) for recognizing the difference between the drivers that beer distributors employ and those who drive across state lines for multiple consecutive hours over several days. NBWA encourages Congress to continue supporting FMCSA in its efforts to recognize the different types of drivers with respect to the Hours-of-Service Regulations.

Tax Credits for Natural Gas Vehicles

NBWA supports the New Alternative Transportation to Give Americans Solutions Act of 2011, or the NAT GAS Act. This legislation promotes the purchase of natural gas vehicles with a focus on heavy-duty and fleet vehicles. It extends tax credits for five years for the use of natural gas as a fuel, the purchase of natural gas fueled vehicles and the installation of natural gas vehicle refueling stations. Extending the alternative fueled vehicle and refueling property tax credits would provide an incentive for beer distributors to replace their current fleets of delivery trucks. Cleaner and more environmentally friendly trucks would benefit the communities in which beer distributors operate.

Transportation

NBWA supports the Research of Alcohol Detection Systems for Stopping Alcohol-related Fatalities Everywhere Act of 2011, S. 510 and H.R. 2324. This legislation would provide funding for research regarding the feasibility, efficacy, potential benefits of and public policy challenges associated with the use of in-vehicle technology to detect intoxicated drivers. While understanding the continued need to ensure strong state regulation of the alcohol industry, NBWA applauds Congress’ efforts to recognize that extensive research is needed to develop technology designed to help stop drunk driving while ensuring policies related to those technologies are sound and effective.

Preventing False Identification

Efforts to avoid proper age identification through the use of technologically-advanced, fraudulent IDs are putting increased strain on those charged with enforcing alcohol laws. These IDs are often mass produced overseas and wind up in the hands of underage people in communities across our country. An investigation by state alcohol regulatory authorities in New Hampshire and Massachusetts led to the conviction of a criminal who was making up to $12,000 per month supplying fake IDs to hundreds of college students by utilizing a website based in China. NBWA commends congressional efforts to crack down on the growing availability of high-tech fake drivers’ licenses from sources abroad.

Multi-Employer Pension Plans (MEPPs)

Some beer distributors participate in multi-employer, defined benefits or pension plans (MEPPs) and have diligently upheld their contribution commitments to such pension funds. A number of these MEPPs are currently under-funded. The withdrawal liability for employers in such under-funded plans could exceed a company’s net worth. Many now face the prospect of enormous withdrawal liability payments if they are ever to sell the business or do anything else that would trigger the liability. It is increasingly difficult for small business owners to keep absorbing these tremendous liabilities. NBWA encourages Congress to pass legislation that would reform MEPPs and provide withdrawal liability relief for small businesses.

Reauthorization of the STOP Underage Drinking Law

Reauthorization of the Sober Truth on Preventing (STOP) Underage Drinking Act is necessary to increase and better coordinate federal support for state efforts in the fight against underage drinking and to reaffirm the effective state-based regulation of alcohol. The STOP Act, which became law in 2006 with NBWA’s support, identifies the unique attributes of alcohol and is consistent with the 21^st Amendment by recognizing that individual states have the ability to regulate alcohol within their borders. Specifically, it highlights health and safety concerns related to underage drinking and provides funding for state initiatives to address such problems. It also authorized a national media campaign, new grant programs and research to combat underage drinking. The STOP Act also formally established and funded the federal Interagency Coordinating Committee on the Prevention of Underage Drinking (ICCPUD) to help coordinate the various federal agencies involved in alcohol issues. NBWA asks Congress to reauthorize and fully fund the STOP Act so that the fight against underage drinking may continue.