FOR YOUR INFORMATION
We share below a number of recent developments. As always, we rely on FIVS Members to apprise us of noteworthy matters. Please contact the FIVS Secretariat with items that may be of interest.
FIVS IN THE NEWS
- Focus on Quality and Safety – Tim Ryan of E. & J. Gallo Winery mentions in this article that FIVS, Wine Institute, and the World Wine Trade Group collaborate on efforts to standardise international regulations for product safety and trade, seeking to eliminate technical barriers to trade.
ECONOMIC SUSTAINABILITY
Regulatory Changes
- United States – The Georgia State House has reportedly approved legislation that will allow home delivery of beer, wine, and spirits by grocery and liquor stores, as well as some restaurants. The measure, now awaiting the governor’s approval, requires delivery personnel to check the identification of buyers and allows local municipalities to opt out of allowing alcohol beverage delivery.
- The Governor of Texas has reportedly expressed support for permanently legalizing “to-go sales” of alcohol beverages, while a state legislator indicated his intention to introduce legislation during the next legislative session toward that end.
- The Ohio State House of Representatives reportedly passed legislation making “alcohol to-go” permanent by a margin of 84-8.
- A New York state senator also reportedly intends to introduce legislation to allow “alcohol to-go” for an additional two years.
- Iowa has reportedly become the first state to make “cocktails to-go” permanent after introducing this approach as a temporary economic relief measure to respond to COVID-19.
Taxes
- European Union – Subject to confirmation by the European Council, the ambassadors of EU member states have endorsed updated excise duty rules on alcohol within the EU which would apply as of 01 January 2022, and would:
- increase the ABV for beer subject to reduced excise rates from 2.8% to 3.5%, encouraging brewers to create new products of lower alcohol strength;
- extend the benefit from reduced excise duty rates to include producers of other fermented beverages, such as cider;
- establish a common pan-EU certification system for confirming the status of independent small producers;
- clarify the conditions for excise duty exemptions for denatured alcohol, used for example in cleaning products; and
- retain the existing excise rates on wine.
- European Union – spiritsEUROPE reportedly argues that the changes proposed for excise regulations for EU alcohol producers – extended to small brewers and cider makers but not to small distillers – discriminates against spirits. The trade association believes that reduced tax rates facilitating product innovation should be applied to all alcohol beverages.
- South Africa – South Africa is reportedly preparing itself to make difficult decisions regarding the priority of its programs and how best to manage public spending after government revenue has plunged during the coronavirus pandemic. A former Deputy Director of the South African Revenue Service in Cape Town noted that the government lost approximately ZAR3 billion per month from income that would have been derived from taxes on alcohol, whose sale was banned during different stages of the country’s lockdown.
Trade
- United States – The Distilled Spirits Council of the United States (DISCUS) reports that U.S. whiskey distillers lost nearly $340 million in sales to the European Union because of trade wars. DISCUS reportedly found that exports of bourbon, Tennessee whiskey, and rye whiskey to the European Union have declined by one-third since the European Union imposed a 25% tariff in June 2018 on U.S. goods in response to U.S. tariffs on EU steel and aluminum.
- The Scotch Whisky Association has claimed that the U.S. tariffs have resulted in a 25% decline in the export of single malt Scotch and Scottish liqueurs to the United States since October 2019.
- More EU-U.S. tariffs to come? – According to a notice published by the U.S. Trade Representative on 23 June 2020, the United States may impose new tariffs on $3.1 billion in exports from Europe as part of a dispute over EU subsidies to Airbus. New tariffs could be as high as 100%, pending a public comment period ending on 26 July 2020. Meanwhile, the World Trade Organisation reportedly may deliver a retaliation award to the European Union after reviewing a separate case concerning U.S. subsidies to Boeing.
- Targeting EU spirits – U.S. tariffs on EU spirits might include gin and vodka from France, Germany, Spain, and the United Kingdom. The U.S. Trade Representative might also be considering additional tariffs on EU spirits, including Scotch whisky, Irish whiskey, other whiskeys, and grape brandies from all EU members.
- The Trump administration may impose these tariffs on imports from France, Germany, Spain, and the United Kingdom as a “carousel retaliation,” which involves a regular rotation of goods targeted for tariffs.
- In a statement, DISCUS noted that the EU might impose retaliatory tariffs on American brandy, rum, vodka, and whiskey during the spring of 2021.
- The U.S. distilled spirits industry has urged the United States and the European Union to de-escalate the trade dispute by simultaneously removing the U.S. tariffs on EU beverage alcohol products and the EU’s tariff on American whiskey.
- Targeting EU spirits – U.S. tariffs on EU spirits might include gin and vodka from France, Germany, Spain, and the United Kingdom. The U.S. Trade Representative might also be considering additional tariffs on EU spirits, including Scotch whisky, Irish whiskey, other whiskeys, and grape brandies from all EU members.
- Dispute over digital services taxes – This article suggests that the Trump Administration may raise tariffs on European wines again as negotiations with the European Union over Airbus have broken down and as the U.S. Trade Representative investigates a separate dispute regarding digital services taxes with Italy, Spain, and others. The author notes that many companies hurt by the tariffs have been further weakened by the coronavirus pandemic.
- New Zealand – United Kingdom talks – The New Zealand wine sector has reportedly welcomed news that New Zealand and the United Kingdom will enter talks to establish a free trade agreement. Removal of tariffs could boost trade worth £2.9 billion in 2019. The first round of negotiations will be held virtually, beginning on 13 July 2020. The United Kingdom has reportedly announced that it will enter into similar negotiations with Australia.
SOCIAL SUSTAINABILITY
Drink Drive
- United States – Mothers Against Drunk Driving (MADD) reportedly commended the U.S. House of Representatives Energy and Commerce Committee for advancing legislation that calls for the installation of advanced drink driving prevention systems in all passenger cars. The INVEST in America Act would require the beginning of a technology-neutral rulemaking process by the U.S. National Highway Traffic Safety Administration within 18 months of enactment. A final rule would be issued within five years and implementation in vehicles would occur two years later.
Pregnancy
- Argentina – A study of 600 pregnant or breastfeeding women by the Secretariat for the Prevention and Assistance of Addictions reportedly found that 77% of these women in the City of Cordoba do not drink alcohol beverages during pregnancy and lactation.
CORONAVIRUS
Opening up
- Australia – Western Australia reportedly eased its COVID-19 restrictions, moving to Stage 4 on 27 June 2020, no longer mandating that patrons at bars, clubs, and restaurants must sit while drinking alcohol beverages. Stage 4 also allows unseated performances in concert halls, live music venues, bars, and pubs.
- Ireland – Fáilte Ireland, the National Tourism Development Authority, reportedly published new guidelines for Phase 3, allowing pubs to begin serving alcohol beverages on 29 June 2020, but only with “substantial meals” and with patrons seated no longer than 105 minutes, after which areas must be vacated for 15 minutes for cleaning. Phase 4 will reportedly begin three weeks later on 20 July 2020 when pubs will be allowed to serve alcohol without food. Guidelines regarding seating time limits have reportedly not yet been finalised.
- Morocco – The Ministries of the Interior, Health, and Trade and Industry have reportedly allowed the reopening of cafes and restaurants at maximum capacity of 50 percent. However, the Ministry of the Interior has reportedly said that restaurants with music bands and bars and nightclubs selling alcohol beverages must remain closed for the time being.
- United Kingdom – Pubs, restaurants, hotels, music halls, cinemas, and theme parks in England may re-open on 04 July 2020. Venues that will remain closed include nightclubs, casinos, bowling alleys, water parks, and exhibition and conference centres. Social distancing rules will be eased to a “one metre plus” rule, rather two metres, although these steps might be reversed.
- United States – New York City reportedly allowed restaurants to operate socially-distant outdoor dining rooms on sidewalks, on rooftops, and in backyards on 22 June 2020 under Phase 2 of easing Covid-19 restrictions. Restaurant staff must wear masks and gloves.
And tightening restrictions
- Portugal – The Minister of Internal Administration reportedly said on 23 June 2020 that 19 parishes in the Metropolitan Area of Lisbon, where the number of COVID-19 cases is more worrying, should continue to limit gatherings to 10 people, while the rest of the country is permitted to have gatherings involving as many as 20 people. Restaurants may continue to accept customers until 11 pm, closing by midnight, but they may not supply alcohol beverages. The sale of alcohol beverages in service areas or at fuel stations also is prohibited.