The Monthly Mash: December 2019 Part I

The Monthly Mash

Volume 4.12

Following approvals in the U.S. House and Senate, on Dec. 20 the President passed the Craft Modernization and Tax Reform Act (CMBTRA) as part of a larger tax package, which will give the country’s 2,000 craft spirits producers much-needed tax relief and parity with their counterparts in beer and wine, who have enjoyed a lower tax rate for many years. FET reform has been ACSA’s top legislative priority, and its extension passage marks a major victory for the distilled spirits industry, which faced a 400 percent tax hike come January 1, 2020 without legislation.

Prior to the passage, the American Craft Spirits Association, together with other major beverage industry groups, worked tirelessly to rally support for FET relief, which was set to revert back to $13.50 from $2.70 for the first 100,000 proof gallons removed from bond per year. CMBTRA had also garnered tremendous bipartisan support with endorsement by more than three-fourths of the House and Senate. Though industry groups had advocated for permanent passage, this one-year extension still provides significant continued relief. Come early 2020, ACSA, along with its industry allies in beer, wine and cider will once again begin a broader push for permanence.

Margie A.S. Lehrman, CEO, ACSA: “In a political climate that is arguably more divided than ever, we applaud Congress for working together on both sides of the aisle to support our community of 2,000 small businesses and do what is vitally important to keep our industry growing. Though FET permanence is critical to the long-term success of our industry and the peripheral industries we support, including U.S. agriculture and hospitality, today we celebrate a small but critical victory. But tomorrow, we will again shift gears to focus on permanent tax relief and long-term parity with our friends in craft beer and wine.”

Chris Montana, President, ACSA and Co-Owner, Du Nord Craft Spirits: “As President of ACSA and a craft spirits producer myself, I know firsthand the struggles we all face in forecasting our financial futures. This one year extension is a certain step in the right direction, but the need for permanent reform is evident as ever. Without the certainty of a longer-term reduction, it remains difficult to plan for growth and expand.”

Mark Shilling, Immediate Past President and Board of Directors, ACSA:“Although FET relief through 2020 is a great step forward, there is much work yet to do. A one year extension temporarily saves jobs and keeps businesses afloat, but also continues the cycle of uncertainty and this uncertainty means owners cannot plan and manage into the future, and potential investors will be anxious about additional investments into the industry.”

The week before the House and Senate voted on the FET relief extension and it was signed into law, ACSA’s Board of Directors made an 11th-hour push to make sure Congress acted on the Craft Beverage Modernization & Tax Reform Act before it expired on December 31. The Capitol Hill visit was a core action item on the agenda for the Board’s annual retreat in nearby Baltimore. We’d like to extend a special thanks to Baltimore Spirits Company and Sagamore Spirit for hosting Board members during the retreat.

ACSA recently released the December issue of our digital publication, Craft Spirits magazine. Click here to read the full issue now, or browse through our feature stories below.

2020 Vision: Gazing Into the Future of Craft Spirits

Kyushu By Way of Maryland: American Shochu Co. brings shochu production stateside

Bullish About Beer Barrels: Why craft distillers are aging spirits in barrels that previously held beer

A Lux Experience: Shedding light on the Luxembourg distilling scene

We’d like to extend a warm welcome to Kate Farrington, who will serve as ACSA’s Sales and Development Director. Kate, who officially joins the ACSA team on January 2, will be responsible for cultivating partnerships and sponsorships for the Association and driving all advertising and associated revenue for all publications, including Craft Spirits magazine, CraftSpiritsMag.com, The Monthly Mash and Craft Spirits Weekly.

All advertising inquiries can be directed to Kate at kate@americancraftspirits.org beginning in January.

Kate possesses extensive experience in nonprofit management including business development, communications, operations, relationship building, and strategic planning.

For many years, Kate served as the Director of Meetings at the Association for Healthcare Philanthropy in Washington, DC. She worked closely with industry leaders to develop educational conferences and programming. In addition to program design, she directed event logistics, marketing efforts and supported internal operations. Kate has an entrepreneurial attitude and has run a boutique floral design company helping to make unique weddings and celebrations.

As a native of the Finger Lakes Region of New York, she has long been interested in agriculture, the farm to table movement and innovation in food, wine and spirits. She resides in Rochester NY with her husband, daughter, dog and cat. She holds a BA in Psychology from Penn State University and a certificate in Nonprofit Management from Georgetown University.

Please join us in welcoming Kate to the ACSA team!

ACSA partnered with TIPS (Training for Intervention Procedures) which offers a dynamic, skills-based training program designed to prevent intoxication, drunk driving and underage drinking. It provides you with the opportunity to build a responsible drinking culture by offering the best server training in the industry.

Each business receives a complimentary passport to the online eTIPS certification course. Members also receive discounts ($10 off the $40 course) for additional eTips registrations so your entire team can learn and In person training discounts are also available.

To receive your eTIPS registration, please contact Carason Lehmann at carason@americancraftspirits.org.

Presenters: Brian DeFoe and Brandon Archuleta, Lane Powell (Seattle)

As a spirits company, what are your obligations with respect to data privacy and security, how do you comply with those obligations, and what do you do if and when something goes wrong and a data breach occurs?

Presenter: Kevin O’Brien, Zepponi & Company (Portland, Oregon)

As the craft spirits industry continues to grow in popularity and influence, there has been a considerable number of minority and majority investments in the past few years. With the industry continuing to expand and become more competitive, it is important for craft distillers to understand what transactions have occurred, the rationale behind these investments and how these deals may impact their business.

This presentation will review the transactions that have occurred in 2019 and provide context as to the logic behind the deals. Supporting information will include relevant spirits industry market data, overall beverage alcohol growth trends and updated distributor consolidation charts. Additionally, the presenters will provide some insight into recent trends regarding changing demographics and perceptions relating to alcohol that may have an impact on the spirits industry into the future.

Presenter: Paul Hughes, Oregon State University (Corvallis, OR)

Oregon State University’s Paul Hughes will explore how critical in-pack stability is in terms of flavor, color and microbial activity and consistency. He’ll also delve into how packaging materials can obscure delicate flavors in drinks and how product novelty may give rise to unpredictable stability issues.