In response to the President’s Executive Order Promoting Competition in the American Economy and the subsequent Treasury Department report Competition in the Markets for Beer, Wine, and Spirits, the Alcohol and Tobacco Tax and Trade Bureau (TTB) on November 9 published Advance Notice of Proposed Rulemaking (ANPRM) Notice No. 216, Consideration of Updates to Trade Practice Regulations in the Federal Register.
TTB recognizes that current trade practice regulations may not accurately reflect today’s marketplace realties, and so is seeking public comment on the need to update a number of regulations intended to ensure a level playing field among competitive businesses.
The Brewers Association plans to submit comments in response to the ANPRM and encourages individual members to read the proposal and to submit comments. Make no mistake, input from individual brewers and others in the beer and brewing community engaged in that competitive marketplace on a daily basis has a powerful force and relevance for regulators.
Some of the issues TTB has specifically requested input on and which would most directly impact small producers include:
- The influence of so-called “category captains,” typically large brewers or wholesalers who use their position to influence retailer buying decisions.
- Whether the current ability to provide shelf plans or schematics (addressing the placement of products) to retailers by category captains should be considered providing a thing of value and so restricted.
The E-Commerce Marketplace
- The ability to make online purchases of alcohol with delivery to a customer’s home via a third-party provider is a new marketplace reality not anticipated by the current regulations. Areas of concern are similar to category management/captaincy issues and involve buying decisions and how products appear on the digital “shelf,” along with the ability of large players to enhance their presence on e-commerce sites through advertising and search capabilities.
- Small producers have long faced significant challenges in getting their products into event venues like sports stadiums and concert arenas, as many times large producers have entered into “sponsorship” agreements that have the effect of giving their products preferred status and sometimes what appears to be exclusive or near-exclusive availability. Providing TTB with small producer real-world experiences with gaining access to such venues will be particularly valuable.
Complete information, including the ability to submit comments (due March 9, 2023), can be found in Rulemaking Docket No. TTB-2022-0011.