2024 Government Affairs Year In Review

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Alcohol and Tobacco Tax and Trade Bureau (TTB)

As the primary federal regulator of most beer products, the TTB has an enormous impact on small and independent brewers. In 2024 the TTB kept Brewers Association (BA) staff busy on several projects.

Early in the year the TTB announced plans for “listening sessions” (basically hearings) and the solicitation of written comments on potential new labeling rules. Possible regulations under consideration would mandate label disclosure of:

  1. Major food allergens
  2. Alcohol content (already mandated for distilled spirits and most wines)
  3. Certain nutritional information
  4. Ingredients

The BA staff testified at the listening sessions and submitted written comments to the TTB. Our messaging stressed the need to avoid imposing undue burdens on small producers and small-batch products. Of paramount importance is to preserve brewer flexibility, protect innovation, and not favor large producers whose large-batch products enjoy economies of scale.

blank cans awaiting label

2024 also saw the TTB re-open a rulemaking on possible changes to “standards of fill,” which restrict container sizes used for distilled spirits and wines regulated under the TTB’s Federal Alcohol Administration Act authority. The primary reason behind re-opening comments on this issue was the increasing popularity of certain can sizes (especially 16- and 19.2-ounce) for packing hard cider and spirits-based cocktails, often by craft brewers. After studying the issue and seeking member feedback, the BA opted to stay neutral on this rulemaking.

December brought a holiday gift from the TTB in the form of an Industry Circular exempting 24 more ingredients from the TTB’s mandatory formula submission and approval requirements. Prompted by petitions submitted by the BA in 2021 and 2023, the TTB’s Industry Circular extends our track record of reducing paperwork burdens on brewers.

During the year we also met regularly with TTB staff and welcomed their participation at the Craft Brewers Conference® and BrewExpo America®.

Dietary Guidelines for Americans

The process for reviewing the Dietary Guidelines for Americans continued throughout 2024. In December the National Academies of Sciences, Engineering, and Medicine (NASEM) released a comprehensive Review of Evidence on Alcohol and Health, which concluded that moderate alcohol consumption is associated with lower risks of all-cause mortality and cardiovascular disease, compared to never consuming alcohol. The review also found that, compared with never consuming alcohol, moderate alcohol consumption is associated with an increased risk of breast cancer, but it did not find such associations for other types of cancer. This review will play a part in determining the 2025 dietary guidelines.

Antitrust

shopping cart in grocery store

At the start of 2024 the BA could applaud the adoption of new Merger Guidelines by the Department of Justice and Federal Trade Commission (FTC). The revised guidelines reflect the more restrictive views of the Biden Administration, and the BA submitted supportive comments in 2023. The newly revised guidelines were recently cited approvingly by a federal court issuing an injunction against the proposed Kroger-Albertsons merger (see below), but many expect the incoming administration to review and revise the guidelines to roll back some of its more restrictive positions.

In December, small brewers could breathe a sigh of relief after two different courts blocked the proposed merger of supermarket giants Kroger and Albertsons, causing the deal to fall apart days later. The BA had concerns that the merger would make the already challenging on-premise chain grocery market even less hospitable to the products of small and independent producers. We brought those concerns to the FTC staff soon after the merger was announced, and were gratified when the FTC decided to file suit rather than let the tie-up proceed.

Other Federal Agencies

Spring 2024 brought welcome news that the federal Food & Drug Administration (FDA) would not likely require additional documentation for brewers and maltsters to demonstrate that a “kill step” would be applied for barley used in brewing. This position departed from a prior FDA proposal that would have required annual written documentation from the industry, ostensibly to promote safety in the barley malt supply chain.

The Corporate Transparency Act (CTA) caused us some whiplash in 2024. The CTA was enacted several years ago to give the Financial Crimes Enforcement Network (FinCEN) a tool to combat money laundering and other illegal movements of currency, requiring a mandatory beneficial ownership information filing by virtually all corporations, limited liability companies, and other entities operating in the U.S. Slated to become effective for existing entities at the end of 2024, in early December a federal court issued an injunction against the law. A court of appeals reversed that decision a few days before Christmas, then a different panel of that same court of appeals re-instated the injunction the day after Christmas. Expect further news in the new year.

Franchise

The BA has long believed that so-called beer franchise laws do not treat small brewers fairly. Enacted at a time of few, mostly giant brewers and many, mostly small, wholesalers, beer franchise laws aimed to counteract the (then) huge economic bargaining advantages between brewers and wholesalers. In today’s market of consolidated wholesalers, it does not make sense for these state laws to treat small brewers the same as a large, multinational brewer.

In 2024 the BA, working with the Wyoming Craft Brewers Guild, secured the passage of a law providing franchise law relief to all U.S. brewers producing less than 25,000 barrels per year. Under the new law, qualifying small brewers can terminate a wholesaler without cause by following a process for wholesalers to receive compensation for the lost brand.

missouri capital building

Later in the year, the U.S. Court of Appeals for the Tenth Circuit sided with the BA and other supplier trade associations in reversing a jury verdict against German liqueur importer Jägermeister USA under Missouri’s franchise law (which applies to beer, wine, and distilled spirits). The decision re-affirms the principle that under Missouri’s alcohol franchise law, a supplier and wholesaler must share a “community of interest” before the franchise law applies to a relationship. While each case will turn on specific facts, we expect that the relationship between most small brewers and their generally larger wholesalers will not meet the community of interest test.

Self-Distribution

The BA believes that small brewers should have the right to distribute to retailers, allowing them to establish a market for their products before needing to sign with today’s giant, consolidating wholesalers. In 2024 the BA filed comments in support of proposed regulations to authorize limited self-distribution by Delaware breweries. We were gratified when the Delaware Alcoholic Beverage Control adopted those regulations, giving Delaware brewers more options to access the market.

self-distribution

The BA also supported the Rhode Island guild in defending the longstanding right of Rhode Island brewers to obtain a wholesale license and self-distribute. This ability provides an important market access option in the state, and was threatened by a bill that would impose a mandatory three-tier requirement in the state where none had existed before. While the bill did not progress, we stand ready to assist any guild in defending these important market access rights.

Excise Taxes

With state budgets generally tightening as federal COVID-19 relief funds run out, the BA recognized that pressure would grow to increase excise taxes on beer. We weren’t wrong: In 2024 tax increase proposals appeared in Colorado, Hawaii, New Mexico, New York, and the city of Chicago. We supported the guilds in several of these states to help defeat the tax increase proposals. Expect more tax increase measures to be introduced in the new year.

empty cans

Solid Waste Recycling Legislation

The past several years has seen a wave of legislation aimed at tackling solid waste, with the most common being so-called Enhanced Producer Responsibility (EPR) laws. If your state does not have an EPR regime yet, expect one; in 2024 we saw Minnesota enact new legislation, and bills were introduced in sixteen other states. While we are not categorically opposed to solid waste recycling rules, the BA has assisted guilds to ensure that the needs of small brewers are accommodated when enacting such legislation.

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