Battle at the US Supreme Court—No, I’m not writing about the recent US Judiciary Committee battle to confirm Judge Kavanaugh to the US Supreme Court but, for the craft brew industry, the upcoming Supreme Court battle regarding residency requirements resulting in business discrimination might be just as important, at the very least to your pocketbook. You may recall, a few months ago, I wrote about Tennessee residency requirements applicable to receiving licenses/permits to sell alcoholic beverages in Tennessee. This residency-based license restriction/requirement is used to benefit local companies, including sellers of craft beer among other alcoholic beverages, by excluding non-resident companies from selling alcoholic beverages in Tennessee. I mentioned in my earlier article that this residency requirement seemed to violate […]
YOU’VE COME A LONG WAY
Less than 15 years ago, states in the South US had laws in place making it illegal to sell craft beer to consumers with alcohol content above a certain limit. This restriction radically limited the number of small craft brewers willing to do business in these states and prohibited certain sales of high alcohol content craft beer. As this article will show, the craft brew industry has come a long way in the South US during the past 15 years. In addition to the changes in the above mentioned alcohol content rules applied to craft beers, other rules have changed in the South US to enhance craft brew sales and to transformed breweries from simple warehouses to elaborate tourist attractions […]
As Easy as A, B, C: Does California’s New Independent Contractor Test Impact Your Brewery?
This spring, the California Supreme Court issued a landmark decision in Dynamex Operations West, Inc. v. Superior Court that has far-reaching consequences for nearly all industries in California. The Dynamex ruling established a new test to determine if a worker is an independent contractor or an employee in California. Because the law treats employees and contractors differently, misclassifying an employee as an independent contractor can result in steep penalties and even criminal charges in certain circumstances. It is therefore extremely important that breweries throughout the state closely review any independent contractor relationships to be sure they meet the new test. Put It to the Test Before Dynamex, California employers applied a flexible, multi-factor common law test for nearly three decades […]
Does the 21st Amendment to the US Constitution Continue to Affect the Craft Beverage Industry?
Yes, the 21st Amendment to the US Constitution passed by congress in 1933 continues to affect the craft beverage industry. Every beer and wine drinker knows that the 21st Amendment to the US Constitution appealed prohibition thereby allowing the sale of alcoholic beverages in the US. Little known is another “prohibition” advanced by the 21st Amendment, that is, the prohibition against state discrimination regarding commerce. Aside from appealing prohibition, the 21st Amendment still significantly affects the craft beverage industry through what is called the “Dormant” Commerce Clause. The Dormant Commerce Clause The “Dormant” Commerce clause prohibits discrimination against out of state companies selling goods and services in a different state. This prohibition against discrimination includes all related state directives and […]
Liquor Law is Hard
Liquor law is hard. I will attempt to explain why, in this article. If you are making mead in a far-off corner of a small state, you can probably get by without much use of or interference from lawyers. But if your ambitions are any grander, most readers of this publication will probably need help from various lawyers, and protection from various legal complexities, at some point in your near future. The upshot is that you probably should not complain, if you can find a good adviser, for any particular legal difficulty, even if it costs a lot per hour. The right person, with the right expertise, may be able to save you a lot of time and frustration. I […]
Brewers Know Their Business Best – How to Know it Even Better!
The cost of producing beer is always greater than the total price of the ingredients used to make it, and those breweries with the best understanding of the indirect costs associated with their offerings are well positioned for sustained organizational success. No brewery can truly make informed business decisions without a clear understanding of its business processes, flows and costs. Such visibility is gained by efficiently and effectively gathering operational data, processing it, managing it and leveraging it to positively impact the not only the business’s bottom line, but integral business decisions. Through an investment in the right enterprise software and resource planning (ERP system), a brewery can obtain the capability to use its operational data to gain a better […]
Securing Rights to Your Trademark Outside of the U.S.
With tap and shelf space for beer and spirits becoming harder and harder to secure, many American craft brewers and distillers are starting to look beyond the country’s borders for new markets. One thing those companies should be aware of is the fact that trademark rights are limited to the country of registration. So, a regional brewer that has been proactive about securing rights to a beer name in the US will not have a claim to the name in Canada, or elsewhere outside the US. When Should a Brewer/Distiller Pursue Foreign Trademark Rights? The easy answer here is that filing early is almost always better, so as to get an early priority date in the foreign countries. This is […]
Moonshine University: What’s the Story?
There is a lot of talk about Moonshine University, launched in early 2013. As this Louisville, Kentucky training center moves toward year five of educating new distillers, I contacted some of the principals, to see how it’s going. The questions are from me, and most of the answers are from Christin Head, Registrar at Moonshine University. 1. What is Moonshine University? Moonshine University is the educational division of Distilled Spirits Epicenter, an artisan distillery and education center. Our distillery is adjacent to our state-of-the-art classroom and is set up for small runs and hands-on distilling training. We offer technical training and business management education for start-ups, industry professionals, and those looking for careers in the distilling industry. Our courses are […]
Preparing for Launch: Steps to Protect Your Brand Name and Trademarks Before You Open
For beverage makers and beverage companies, selecting a name can be daunting and extremely stressful. Every business owner want to pick something that is catchy but that also gives the customer enough information to represent the identity of the brewery, winery or distillery. The trademark will be the basis for the company’s brand and the starting point for social media, advertising, promotional materials (as well as any signs or regulatory information needed for licensing.) It can be exciting and relieving to finally decide on a name and it typically starts a cascade of other, often expensive, steps towards finally opening (or launching a new product line.) With all of this excitement, beverage makers can easily overlook important trademark considerations that […]
Who Let the Equity Investors In? Tied House Issues Loom in the World of SEC-Regulated Crowdfunding
It’s no secret that bars, restaurants, breweries, wineries, distilleries, and other alcohol beverage licensees use crowd-funding sites like Kickstarter, Indiegogo, and GoFundMe to raise capital. In fact, the alcohol beverage industry has found so much success with crowd funding that some companies, like EquityEats, have popped up for the sole purpose of raising capital for restaurants and other industry members. Generally, though, these sites do not allow fundraising entities to offer equity securities in exchange for capital due to the strict “accredited investor” requirements from the U.S. Securities and Exchange Commission (SEC). However, the SEC recently adopted new rules regarding crowd-funding, and in doing so they may have created a tied house nightmare. Or, as one regulator phrased it, “a […]