NBWA not only wants you, but needs you in Washington, D.C., April 9-12, 2000, for the NBWA/BREWERS Joint Legislative Conference. Your voice needs to be heard in order to defeat the proposed ergonomics standards outlined in the recent special edition of Beer Perspectives, as well as to discuss other important industry issues. This is the most significant business trip you will make this year. This important Conference will give you the opportunity to educate your representative in face-to-face meetings. The following is a list of issues to be covered with members of Congress at the 2000 NBWA/BREWERS Joint Legislative Conference.

• Preventing OSHA bureaucrats from mandating non-scientific ergonomics regulations – proposed regulations could cost beer wholesalers 30¢/case.
• How beer wholesalers and brewers are fighting alcohol abuse and illegal underage purchase and consumption – and how it’s making a difference.
• Opposition to advertising restrictions.
• The rollback of the 1991 beer tax increase.
• Commercial driver’s license (CDL) reform.

The above issues are important to your bottom line, and you should be in Washington April 9-12. The fact is, the issues of the 2000 Conference are shaping up to be the most important since the proposed 1993 beer tax increase!

Speaking at the Conference will be Senator Mitch McConnell (KY) and Representative David Obey (WI-7).

Senator McConnell will give Conference attendees a political and legislative update on actions within the U.S. Senate and around the country. In addition to serving as chairman of the National Republican Senatorial Committee (NRSC), the Senate committee that directs the election and re-election of Republicans, McConnell is also chairman of the Senate Rules Committee, which plays a critical role in reviewing legislation and determining legislative jurisdiction. McConnell further serves on the very important Appropriations and Agriculture Committees as an outspoken defender of political free speech. McConnell is also a past winner of the NBWA President’s Award for Legislative Excellence.

Representative Obey, a Democrat first elected in 1969, served as chairman of the powerful House Appropriations Committee from 1994 to 1995, and since 1995 as the ranking minority member. The Almanac of American Politics describes Obey as “above all an appropriator, and takes some justifiable pride in his skill at this work.” The Almanac goes on to say, “Obey has shown great skill, plus a determination to get things done on time, which is not always how appropriating works.” Many important issues for NBWA members pass through the House Appropriations Committee, and Obey has been very helpful on these matters, including assisting in stopping Neo-Prohibitionists’ efforts to link beer with illegal drugs. Obey received the President’s Award for Legislative Excellence last year. On Monday morning of the Legislative Conference, Representative Obey will give attendees his perspective on the legislative agenda for the remainder of the 106th Congress.

Enclosed in this issue of Beer Perspectives is a registration form. We cannot emphasize enough how important it is for you to be in Washington, D.C., April 9-12. Be sure to register today! For additional information, please contact the NBWA Conventions Department at (800) 300-6417.

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Small Business Tax Package Passes House — Includes Estate Tax Reduction, SOT Repeal

On March 9, 2000, the U.S. House of Representatives passed H.R. 3081, sponsored by Representative Rick Lazio (NY-2), which included a number of tax cuts that would be beneficial for NBWA members. The $45 billion over five years tax reduction package was offered by House Republicans to compensate businesses for the costs associated with an increase in the minimum wage. Forty-one Democrats joined Republicans to pass the bill, which includes a reduction in estate taxes, repeal of the Special Occupational Tax (SOT) and Fair Labor Standards Act (FLSA) relief for inside sales personnel.

H.R. 3081 reduces the estate, gift and generation-skipping transfer tax over five years. It further reduces the top estate tax rate of 55 percent to 50 percent by 2002 and reduces all estate and gift tax rates by one percentage point per year in 2003 and 2004. The measure converts the unified credit into a unified exemption and repeals the five percent surtax that is imposed on cumulative taxable transfers between $10 million and the amount necessary to phase out the benefits of the graduated rates. Simply put, H.R. 3081 reduces the highest estate tax rate from 55 percent to 48 percent by 2004. “While this measure is good news for beer wholesalers and will continue the reduction of estate tax rates, NBWA continues to push for total repeal of the unjust and burdensome death tax,” said NBWA President David Rehr.

The bill also repeals the SOT imposed on producers and marketers of distilled spirits, beer and wine, which currently ranges from $250 to $1,000 per premise each year. The repeal of the tax would become effective in 2001; another good development for NBWA members.

Finally, a very important benefit in this legislation for NBWA members is “Inside Sales Reform,” which would amend the Fair Labor Standards Act (FLSA) and exempt from existing wage and hour overtime laws inside sales personnel who meet certain basic criteria. For beer wholesalers with significant tel-sell operations and those with other inside sales personnel, this is great progress.

The bill also increases from 50 percent to 60 percent the percentage of business meal expenses that are deductible by businesses. Under the bill, the increase would be phased in from 50 percent to 55 percent in tax year 2001 and to 60 percent in 2002 and subsequent years.

H.R. 3081 also repeals a current law affecting businesses that use accrual accounting methods. The current law prevents them from selling assets in installments and spreading out their tax liability. The current accrual method of accounting requires that businesses recognize income in the year in which the right to receive the income occurs, regardless of whether businesses actually receive funds in that year. The installment method of accounting will allow businesses to defer recognition of income until the business actually receives payment. This change in the law will be beneficial to a company that arranges to sell or transfer ownership over a period of years.

The legislation now moves to the Senate where it may be added to the Senate Bankruptcy bill. NBWA will keep you apprised of the Senate action.

Please look at the KEY VOTE insert in this issue of Beer Perspectives to see how your representative voted. If you have questions or comments, contact Andy Dodson, NBWA Washington representative, at (800) 300-6417.

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New NBWA Staff Tour Wholesaler Operations in Northern Virginia

NBWA Writer/Assistant Editor Dan Powell, spent a morning in Chantilly, Virginia, with Al Christian, operations manager at Premium Distributors of Virginia, and Ed Cook, general sales manager.

NBWA’s new staff Gerrie Gray (left), Dan Powell and Cathy Zeigler pose for a picture.

Christian and Cook took time out of their schedules to show Dan the “in’s and out’s” of the beer wholesaling industry. Al explained that the Reyes family, owners of Premium Distributors, which distributes Miller products, also owns three other wholesaler operations in Chicago, Illinois, Washington, D.C., and Southern California.

Premium Distributors of Virginia has 113 employees, 12 bulk trucks and 29 street-side trucks delivering to retailers every day, and supplies more than 2,200 retailer accounts with beer. Dan found it interesting to hear about the different types of accounts each wholesaler has to deal with – from hotels, to bars, to restaurants, to concert halls and even to special events like fairs or carnivals. “To someone new to the industry, it is amazing to observe first hand how distributors deal with all of these different customers, each in a different way,” remarked Dan.

Joining Dan later that day were Gerrie Gray, political affairs coordinator, and Cathy Zeigler, executive assistant, also new at NBWA, for a tour of Northern Virginia Beverage Co. Jim Russell, chairman of Northern Virginia Beverage Co., and former NBWA Board member representing Virginia, took time to show the staff members his operation and talk to them about some of the intricacies of being a small business owner in a highly regulated industry.

Russell mentioned that as a small business owner, “It’s hard to compete with the bigger companies, especially with all of the regulations the government imposes on us.”

Russell’s business started in 1960 with 4,000 square feet of warehouse space and has grown into a 65,000 square-foot operation. Russell said, “Even the place we have now isn’t big enough, we keep outgrowing our space.” He is currently looking for a warehouse with 125,000 square feet.

Russell said that one of his biggest problems is finding employees to work in the warehouse. He also said that turnover is very high. “Nobody wants to drive a truck or do manual labor anymore,” said Russell.

Another problem facing beer wholesalers is government officials imposing regulations without seeing how they will affect businesses. According to Russell, “The problem with most elected officials is that they don’t have first hand knowledge of how to run a business.”

Northern Virginia Beverage Co. is a distributor of Coors products as well as dozens of foreign beers and micro-brews.

NBWA would like to thank both Premium Distributing of Virginia and Northern Virginia Beverage for giving its new staff members the opportunity to see how a beer wholesaler operates.

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Public Relations Tips – The Press Release

The news or press release is the most common form for notifying the print and electronic media of “news” you want them to cover. The standard format for a news release contains the date it was issued, release instructions, a contact person and slug lines to indicate the end. Additionally, the release should be one to two double-spaced pages and should answer the five “w’s” and the “h” — who, what, where, when, why and how. You need to develop a strong lead to capture an editor’s interest and make it sound newsworthy to the person deciding whether your story is worth covering. Editors receive dozens if not hundreds of news releases each week. Yours needs to stand out from the rest.

Realize that you will not get the newspapers or electronic media to cover every story, but by keeping your name in front of the editors and reporters, you are providing a type of educational program that will make you a more credible source for real news at a future date. Also, if you foster good relations with the media in your area, personal follow-up to a news release will result in getting more stories run.

The other key to an effective news release is sending it to the right person. Major newspapers have editors for specific sections such as national, state, local, business, lifestyle and editorial pages. Your release should be sent to the appropriate editor. Your company should develop and maintain an up-to-date media list including all of these people, their addresses, telephone and fax numbers. You may also send the release to trade publications, allied associations and suppliers or customers you wish to keep informed of all that you do. And, of course, you should send them to NBWA as well.

Below are some helpful writing tips that you should be aware of when writing your press release.

Put the punch in your lead. Assume that only the headline and the first paragraph will be read, so be sure to include the who, what, where, when, why and how at the very top. If this captures the reader’s attention, then he or she will scan the rest of the release.

Make reference to the media outlet’s target market in your headline or lead. If editors can’t find a sign that their readers or viewers would be interested in the issue, or if editors can’t make an immediate decision as to whether the readers or viewers would care, they’ll discard your release and move on to the next one.

Use a striking statistic in your lead. Your objective is to get the reader’s attention, so be sure to include a compelling piece of data that relates to your news or something that’s been in the news.

Always keep the copy simple. Stick to the facts and leave personal opinion out. Be accurate yet brief and write to a sixth grade audience. Indenting your paragraphs makes them easier to read.

Use an inverted pyramid style for the body. Use full names if the release is about a person. Don’t use industry jargon. Use only two ideas per sentence, and limit sentences to three or four per paragraph. Try using a quote or an interesting fact.

Your final paragraph should contain information about your company such as the date founded, the number of employees, information about the facility and the economic importance to the community.

Send the press release to your media contacts, elected officials, suppliers, customers, allied associations and NBWA. Be sure you do not send your release to multiple editors at the same publication. However, with some large publications an article submitted to one editor may be more appropriate in another department. Ask the editor if your press release could be passed to another department or if you could send it to them yourself. If your release is about an event, call the reporter to see if anyone has been assigned to cover it. Be sure to call assignment desks on the morning of the event. Even if a reporter was not assigned to the event originally, if it is a slow news day, your reminder could be welcomed news.

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“Got Beer”
People for the Ethical Treatment of Animals (PETA), a fanatical animal rights group, is up to its regular bizarre antics with its new attack against milk, it is now saying, “The foam mustache should be from a brew, not a moo.” As a way to focus attention on what it believes to be the cruel treatment of cows on factory farms, PETA is using beer in its new anti-milk campaign, which is aimed at college students. For those not familiar with PETA, they are known for their extremist views and radical means for getting their message to the public. While NBWA has not made an official statement, we do hope that as PETA continues this campaign aimed at college students, they will remember that the legal drinking age is 21.

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States’ Corner
Texas Judge Rules to Allow Out-Of-State Shipments of Alcohol

In a ruling by U.S. District Judge Melinda Harmon of Houston, Texas, a law prohibiting out-of-state sellers from shipping licensed beverages directly to Texas consumers was overturned. The judge did this saying that the law violates the Interstate Commerce Clause of the Constitution.

In her ruling, she cited that states’ reliance on police power to protect the health, safety, welfare, morals and temperance of their citizens is insufficient to justify the direct shipment ban.

This decision, if left standing, could cost the state hundreds of thousands of dollars in lost revenue. State Comptroller Carole Keeton Rylander estimated that as much as $300,000 a year in state taxes are already lost as a result of such sales.

NBWA understands that the state of Texas, through the Attorney General’s office, is planning to appeal this ruling.

Bootleggers, those interested in circumventing state regulation, have recently filed similar suits in Indiana, Florida, Virginia and New York. The Indiana case has been appealed. NBWA, working with wine and spirits counterparts and other industry allies, joined on to an Amicus Brief as part of the Indiana appeal.

NBWA will continue to be vigilant to ensure that the three-tier system remains strong.

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Wholesale Beer Distributors of Texas
Commentary By Robert Saunders

The following article provides excellent information regarding direct shipping, which other states may wish to use in their own arguments against illegal bootlegging.

A Houston federal judge’s decision striking down a Texas law that banned mail order sales of alcohol into Texas has been hailed as a victory for the Internet, but the Internet’s not the issue.

In reality, it’s a victory for bootleggers, threatens the state treasury and takes Texas lawmen out of the loop in enforcing state alcohol laws.

On top of that, it isn’t a good deal for Texas consumers.

The brouhaha got started when U.S. Federal Judge Melinda Harmon ruled that a state law barring out-of-state suppliers from shipping alcoholic beverages directly to Texas consumers violated the interstate commerce clause of the U.S. Constitution.

The plaintiffs in the case wanted to buy wine directly from out-of-state companies in a scheme that will ultimately bypass Texas tax collectors and Texas alcohol control laws.

The Texas Alcoholic Beverage Commission has rightly appealed the judge’s ruling.

No one knows how much alcohol is sold or shipped to Texas over the Internet from catalog sales, but last year State Comptroller Carole Keeton Rylander estimated that as much as $300,000 a year could be lost in state taxes from such sales. As the use of the Internet grows, the tax loss could mushroom.

The judge’s ruling also seems at odds with the 21st Amendment to the U.S. Constitution, which ended national Prohibition.

That amendment says, in part, “the transportation or importation into any state, territory or possession of the United States for delivery or use therein of any intoxicating liquors in violation of laws thereof, is hereby prohibited.”

Adoption of the amendment was meant to allow state governments to regulate the sales and distribution of alcohol beverages. It’s a stretch to think one part of the Constitution would void another part of the Constitution.

Without strong state regulation of alcohol sales, bootleggers will have a field day. More than half of the geographic areas of Texas are “dry” which means that no alcoholic beverages are sold there. Even in “wet” areas there is a patchwork of cities and precincts, which have adopted local option laws for alcohol.

Texans don’t want UPS, Fed-Ex or U.S. Post Office drivers enforcing alcoholic beverage laws. Out-of-state shippers will be totally unregulated in where and whom they sell products, including minors or those who might want to sell to minors.

Texas has a system that assures accountability of alcoholic beverage sales through a license process for wholesalers and retailers. Violations of the state’s alcohol laws can result in fines or license revocations.

This kind of out-of-state shipment of alcohol into Texas provides little or no consumer protection. There is nothing to protect Texans from inferior products being sold by faceless Internet Web sites or through 800 numbers.

Texan wholesalers and retailers are “hometown” business people who have made investments in Texas, employ thousands of Texans and abide by Texas laws. Out-of-state shipments threaten the stability of this system and put local option accountability at risk.

There is a vast difference between alcoholic beverages mailed in from out of state and a pair of shoes ordered from L.L. Bean. There can be social and criminal consequences when alcohol is misused.

Out-of-state shipments will also discriminate against anyone who does not have a catalog or a computer. Customers who use Texas stores and establishments to buy licensed beverages will pay the taxes called for under Texas laws. They should not be penalized because they don’t own a computer, and they shouldn’t have to subsidize those who do.

The courts and lawyers will ultimately resolve this case.

In the meantime, the alcoholic beverage industry in Texas will need to brainstorm on the best solution to make use of the Internet and E-commerce. That solution needs to make common sense and benefit everyone who has a stake in this issue.

Robert Saunders is the owner of M&S Distributing Company in LaGrange, Texas, and is the President for 1999-2000 of the Wholesale Beer Distributors of Texas. Saunders is a former member of the Texas House of Representatives.

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