Keith Bell accepted an appointment by the Tennessee ABC to serve as Assistant
Director, at yesterday's ABC meeting. We hear he starts Monday October
3.
The Assistant Director has historically been in charge of restaurants,
hotels and other on-premise LBD licensees. We expect Mr. Bell will assume the
role of LBD chief from TABC Director Danielle Elks, who has been filing in for
Caroline Smith for nearly a year after her resignation.
Mr. Bell will
have to become indoctrinated in the byzantine laws and unwritten customs that
are all too familiar to industry insiders.
Mr. Bell most recently comes
from a real estate title company in Hendersonville. He is a 1982 grad of the
University of Tennessee law school.
In other LBD news, reliable sources
report that Nashville ABC front desk staffer Melissa is being trained to take
over LBD renewals for Grace, whose last day is this Friday. Melissa will be
sorely missed at the front desk, but we wish her well with handling the huge
volume of renewals.
Stay tuned for more.
Thursday, September 29, 2011
Tuesday, September 27, 2011
Purgatory for Tennessee Liquor License Renewals?
Renewing restaurant, hotel and liquor-by-the-drink licenses in Tennessee has
never been painless. Busy staff regularly forget to pass along the renewal
paperwork to corporate. Even after filing, renewals are often delayed - and
citations issued - because Revenue shows taxes due or reports LBD bond issues.
Exacerbating the frustration, Revenue records frequently show taxes owed, when
in fact, no taxes are due.
Hold on to your seats. Things are poised to get worse.
Longtime Nashville Tennessee ABC renewal staffer Grace Buchanan is leaving for a new gig at Vanderbilt this Friday.
To make matters worse, Tracey Richards at Revenue, who gives tax clearance and manages bonds, has been promoted and transferred, leaving her colleague, Rondle John, and supervisor Martha Potter to handle LBD tax clearance and bonds for the entire state. Their job is complicated by ancient technology that often shows incorrect tax data, for no apparent reason.
We hear that there are no plans to replace either Grace at the ABC or Tracey at Revenue. Despite both positions being critical to a large source of tax revenue (LBD pays up to 24.75% tax on sales), the state hiring freeze may mean the positions remain vacant indefintely.
Renewals could be considerably more complicated for some time. Welcome to Hades.
Hold on to your seats. Things are poised to get worse.
Longtime Nashville Tennessee ABC renewal staffer Grace Buchanan is leaving for a new gig at Vanderbilt this Friday.
Tennessee LDB staff have been stretched thin for nearly
a year. ABC Director Danielle Elks has been covering for two vacant staff
attorney positions. The ABC handles thousands of LBD licensees, without the
benefit of modern computer systems.
To make matters worse, Tracey Richards at Revenue, who gives tax clearance and manages bonds, has been promoted and transferred, leaving her colleague, Rondle John, and supervisor Martha Potter to handle LBD tax clearance and bonds for the entire state. Their job is complicated by ancient technology that often shows incorrect tax data, for no apparent reason.
We hear that there are no plans to replace either Grace at the ABC or Tracey at Revenue. Despite both positions being critical to a large source of tax revenue (LBD pays up to 24.75% tax on sales), the state hiring freeze may mean the positions remain vacant indefintely.
Renewals could be considerably more complicated for some time. Welcome to Hades.
Friday, September 23, 2011
Wine in Tennessee Groceries: Worthy Progeny of the Whiskey Rebellion
Controversy surrounding alcoholic beverages is not a new phenomenon. Tennessee
is currently torn by the debate over wine in grocery stores. But alcohol has
divided Americans politically since our nation was born, often causing unusual
alliances like the coalition of conservative church groups, liquor wholesalers
and liquor store owners that currently oppose wine in grocery stores in
Tennessee.
The Whiskey Rebellion is a fascinating nugget from the colorful history of alcohol, worthy of reflection.
The Whiskey Tax was the very first federal internal revenue tax, levied in 1791 to help pay for revolutionary war debt. The tax divided large and small distillers, by taxing smaller distillers at about twice the rate as large distillers.
The tax also pitted more-established Eastern towns, home to larger distillers, against frontier areas with small distilleries, where distilling crops to whiskey was one of the few ways to make money to purchase essential goods. Hauling whiskey by wagon on mud roads over the Appalachian Mountains was a much easier way for farmers to make money than trying to haul corn or other crops.
The tax - and unfairness of the tax for small distilleries in the frontier - fueled discontent about the lack of federal support for basic frontier needs, like troops to protect frontier towns from Native American attacks. Federal revenue agents were tarred and feathered, and eventually, frontier folks rose in arms in Western Pennsylvania.
The dispute ultimately lead President Washington to become the only sitting President to command troops in battle. The insurrection was quashed and the federal government's ability to tax was firmly established. The tax also established the government's ability to require every distillery to register.
The TTB has a great article about the rebellion here.
The Whiskey Rebellion is a fascinating nugget from the colorful history of alcohol, worthy of reflection.
The Whiskey Tax was the very first federal internal revenue tax, levied in 1791 to help pay for revolutionary war debt. The tax divided large and small distillers, by taxing smaller distillers at about twice the rate as large distillers.
The tax also pitted more-established Eastern towns, home to larger distillers, against frontier areas with small distilleries, where distilling crops to whiskey was one of the few ways to make money to purchase essential goods. Hauling whiskey by wagon on mud roads over the Appalachian Mountains was a much easier way for farmers to make money than trying to haul corn or other crops.
The tax - and unfairness of the tax for small distilleries in the frontier - fueled discontent about the lack of federal support for basic frontier needs, like troops to protect frontier towns from Native American attacks. Federal revenue agents were tarred and feathered, and eventually, frontier folks rose in arms in Western Pennsylvania.
The dispute ultimately lead President Washington to become the only sitting President to command troops in battle. The insurrection was quashed and the federal government's ability to tax was firmly established. The tax also established the government's ability to require every distillery to register.
The TTB has a great article about the rebellion here.
Monday, September 12, 2011
No Krogering for Beer in Memphis?
A few days ago according to a reliable source, Memphis police visited a Kroger
store and told the store to stop selling beer because some of the employees did
not have Memphis employee cards. Memphis police were reported as advising Kroger
that beer sales should be halted in any Memphis store where employees lacked the
Memphis employee card.
We blogged about the card last month. Every employee that touches beer in Memphis must have a card, unless they have an ABC server permit card. The card costs $50 and requires a TBI background check.
We wondered if Memphis police would enforce the requirement. The Kroger raid shows that Memphis is serious.
The raid has drawn attention from several large retail chains concerned about compliance with the law. Reliable sources report that the Mayor of Memphis unofficially asked the police chief to stop enforcing the law for the next 30 days, presumably to allow retailers time to come into compliance.
Several industry members are using the unofficial moratorium to advocate against the law, hoping to repeal or simplify the employee registration requirement. We see the law as an expensive and burdensome requirement that does little to prevent sales to minors, or promote other legitimate regulatory concerns.
The employee card requirement also appears to exceed the city's power to regulate beer, making it illegal.
We encourage retailers and Memphis wholesalers to speak up quickly to help bring balance to the debate.
We blogged about the card last month. Every employee that touches beer in Memphis must have a card, unless they have an ABC server permit card. The card costs $50 and requires a TBI background check.
We wondered if Memphis police would enforce the requirement. The Kroger raid shows that Memphis is serious.
The raid has drawn attention from several large retail chains concerned about compliance with the law. Reliable sources report that the Mayor of Memphis unofficially asked the police chief to stop enforcing the law for the next 30 days, presumably to allow retailers time to come into compliance.
Several industry members are using the unofficial moratorium to advocate against the law, hoping to repeal or simplify the employee registration requirement. We see the law as an expensive and burdensome requirement that does little to prevent sales to minors, or promote other legitimate regulatory concerns.
The employee card requirement also appears to exceed the city's power to regulate beer, making it illegal.
We encourage retailers and Memphis wholesalers to speak up quickly to help bring balance to the debate.
Wednesday, August 24, 2011
Grocers and C Stores Pay the Piper in Memphis
Memphis has always had its share of odd liquor rules. A recent change in the law is different, because it makes doing business in Memphis much more cumbersome and expensive.
For some time, Memphis required beer permit holders to register all employees that touch beer. This mostly affects grocers, drug stores and convenience stores, requiring every sales clerk and stocker to go downtown and obtain the permit. The rule does not apply to restaurants and other businesses with liquor licenses.
We suspect that lots of businesses were clueless and did not comply. Although a pain, however, compliance only involved a $10 fee per employee.
Will Cheek's Blog
Beginning July 1, the fee jumped to $50 per employee: $29 for a TBI background check and $21 for an affidavit. For most C stores, drug stores and small groceries, this means every employee must have the $50 card.
Memphis is telling new applicants about the new employee card rule. It remains to be seen how closely the rule is enforced with existing permit holders.
The good news is that the card follows the employee, meaning that it is valid if an employee moves between stores or is hired from a competitor. The card must be renewed every 2 years.
We see this as being quite an expensive requirement for most retailers, from Wal-Mart to mom and pop stores. Given the turnover among clerks, compliance could be costly and difficult.
The big question is how closely Memphis enforces the new law. The Memphis Alcohol Commission does not have enforcement officers and must rely on police or other city officials to enforce the beer laws. It is possible that the new law will be largely ignored without consequence.
For some time, Memphis required beer permit holders to register all employees that touch beer. This mostly affects grocers, drug stores and convenience stores, requiring every sales clerk and stocker to go downtown and obtain the permit. The rule does not apply to restaurants and other businesses with liquor licenses.
We suspect that lots of businesses were clueless and did not comply. Although a pain, however, compliance only involved a $10 fee per employee.
Will Cheek's Blog
Beginning July 1, the fee jumped to $50 per employee: $29 for a TBI background check and $21 for an affidavit. For most C stores, drug stores and small groceries, this means every employee must have the $50 card.
Memphis is telling new applicants about the new employee card rule. It remains to be seen how closely the rule is enforced with existing permit holders.
The good news is that the card follows the employee, meaning that it is valid if an employee moves between stores or is hired from a competitor. The card must be renewed every 2 years.
We see this as being quite an expensive requirement for most retailers, from Wal-Mart to mom and pop stores. Given the turnover among clerks, compliance could be costly and difficult.
The big question is how closely Memphis enforces the new law. The Memphis Alcohol Commission does not have enforcement officers and must rely on police or other city officials to enforce the beer laws. It is possible that the new law will be largely ignored without consequence.
New Rules for Tastings at Tennessee Liquor Stores
Toward the end of this year's legislative session, retail tastings were
legalized for Tennessee package stores. The change surprised many and the law
was also wide open about what retail stores could do at tastings. Read
more about the law here.
ABC Regs for retail store tastings were inevitable. The ABC was proactive and held its first meeting with industry members last week, on August 17, 2011.
Many legal issues were discussed, including whether store employees had to hold server permits or complete LBD server training, could food be served, and were there limitations on how often and how long tastings could be offered. Retailers want clarification that they may have glassware, ice and mixers to be able to conduct tastings.
One store owner acknowledged the problem with leaving bottles out front for customers to taste at any time of the day, but wanted to be able to allow a potential purchaser of high end scotch to try the product without any time limitation. This issue may be one of the hardest to resolve.
The meeting identified a number of practical issues with retail store tastings, as well as one important political position. When food service was raised as part of tastings, wholesale representatives pointed to wine in grocery stores as a reason not to allow liquor stores to pair food with wine at tastings. This would allow grocers to say that liquor stores can pair wine with food, and why shouldn't we?
The tastings law prohibits wholesale participation in retail tastings, and the wholesaler representatives at the meeting expressed no interest in helping wineries and distilleries to pass free product to retailers for tastings.
This is a huge limitation - retailers have to purchase all product given away at tastings at the wholesale price.
The next step is a draft of regulations from the ABC and a second opportunity for industry to weigh in. We encourage interested retailers to follow this process closely. Tastings are a tremendous opportunity for stores that market to consumers.
ABC Regs for retail store tastings were inevitable. The ABC was proactive and held its first meeting with industry members last week, on August 17, 2011.
Many legal issues were discussed, including whether store employees had to hold server permits or complete LBD server training, could food be served, and were there limitations on how often and how long tastings could be offered. Retailers want clarification that they may have glassware, ice and mixers to be able to conduct tastings.
One store owner acknowledged the problem with leaving bottles out front for customers to taste at any time of the day, but wanted to be able to allow a potential purchaser of high end scotch to try the product without any time limitation. This issue may be one of the hardest to resolve.
The meeting identified a number of practical issues with retail store tastings, as well as one important political position. When food service was raised as part of tastings, wholesale representatives pointed to wine in grocery stores as a reason not to allow liquor stores to pair food with wine at tastings. This would allow grocers to say that liquor stores can pair wine with food, and why shouldn't we?
The tastings law prohibits wholesale participation in retail tastings, and the wholesaler representatives at the meeting expressed no interest in helping wineries and distilleries to pass free product to retailers for tastings.
This is a huge limitation - retailers have to purchase all product given away at tastings at the wholesale price.
The next step is a draft of regulations from the ABC and a second opportunity for industry to weigh in. We encourage interested retailers to follow this process closely. Tastings are a tremendous opportunity for stores that market to consumers.
Tuesday, July 26, 2011
Breweries of Tennessee Unite!
The recently passed law legitimizing high alc beer has another happy ending. A
Tennessee Craft Brewers trade association. 18 breweries from across the state
gathered and unanimously voted to form a guild at an organizational meeting in
Nashville on July 16.
A bit of history. This spring, a high alc beer bill was hijacked in the legislature by powerful forces that sought to limit brewing high alc beer to a single brewery that was looking to locate a large brewery in Tennessee. Local Tennessee craft brewers started coming out of the woodworks, and when the dust settled, the high alc beer law applied to all Tennessee breweries. Read more on the high alc beer law here.
A lot of the credit goes to the one selected brewery, which made it clear that it would not come to Tennessee unless all breweries in Tennessee could brew and taste high alc beer in their taprooms.
Credit also goes to Linus Hall of Yazoo and several smaller craft breweries that quickly called legislators to help ensure the right of all Tennessee breweries to brew high alc beer.
The legislative fight brought Tennessee craft breweries together, perhaps for the first time on a state-wide scale. Folks discovered that the state has over 30 breweries operating or in the process of opening. Here is one list, which we know does not include a handful of our clients looking to open breweries, and undoubtedly there are others opening breweries. Brewing in Tennessee is poised to flourish.
Adam Palmer of Knoxville’s Marble City Brewing Company was quoted as saying: “The formation of the Tennessee Craft Brewers Guild is exciting for a few reasons. There is a reason there aren’t more breweries in this state and it is in large part due to the restrictive laws. Setting up a unified and organized guild will help give the breweries a stronger voice when it comes time for writing or re-writing legislation as it pertains to beer laws. The guild will also be used to promote craft beer in the state of Tennessee through discussion boards, seminars, festivals, and other special events.”
We also see the association as an excellent marketing opportunity. The success of Kentucky's Bourbon Trail shows that organized marketing can draw more tourists to several competing distilleries. For example, beer aficionados visiting Nashville could sample beers from several local craft taprooms, with proper marketing from the Tennessee Craft Brewers Guild.
The future is bright for Tennessee Craft Breweries.
A bit of history. This spring, a high alc beer bill was hijacked in the legislature by powerful forces that sought to limit brewing high alc beer to a single brewery that was looking to locate a large brewery in Tennessee. Local Tennessee craft brewers started coming out of the woodworks, and when the dust settled, the high alc beer law applied to all Tennessee breweries. Read more on the high alc beer law here.
A lot of the credit goes to the one selected brewery, which made it clear that it would not come to Tennessee unless all breweries in Tennessee could brew and taste high alc beer in their taprooms.
Credit also goes to Linus Hall of Yazoo and several smaller craft breweries that quickly called legislators to help ensure the right of all Tennessee breweries to brew high alc beer.
The legislative fight brought Tennessee craft breweries together, perhaps for the first time on a state-wide scale. Folks discovered that the state has over 30 breweries operating or in the process of opening. Here is one list, which we know does not include a handful of our clients looking to open breweries, and undoubtedly there are others opening breweries. Brewing in Tennessee is poised to flourish.
Adam Palmer of Knoxville’s Marble City Brewing Company was quoted as saying: “The formation of the Tennessee Craft Brewers Guild is exciting for a few reasons. There is a reason there aren’t more breweries in this state and it is in large part due to the restrictive laws. Setting up a unified and organized guild will help give the breweries a stronger voice when it comes time for writing or re-writing legislation as it pertains to beer laws. The guild will also be used to promote craft beer in the state of Tennessee through discussion boards, seminars, festivals, and other special events.”
We also see the association as an excellent marketing opportunity. The success of Kentucky's Bourbon Trail shows that organized marketing can draw more tourists to several competing distilleries. For example, beer aficionados visiting Nashville could sample beers from several local craft taprooms, with proper marketing from the Tennessee Craft Brewers Guild.
The future is bright for Tennessee Craft Breweries.
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