On June 15, the U.S. Senate passed the FY 2001 Transportation Appropriations bill, which included language offered by Senator Frank Lautenberg (NJ) to mandate a national .08 BAC standard. The legislation now goes to the House/Senate conference committee, where NBWA and allied industry organizations will attempt to exclude the language from the final bill. While the Senate bill includes the .08 BAC mandate, the House version does not include a similar standard.

During debate on the Transportation Appropriations bill, NBWA and its Senate allies made a strategic decision to back off an earlier pursuit of a Senate vote to strike the Lautenberg language. Our decision was based upon existing Senate support and the previous 1998 vote of 62-32 against us. While this year’s vote would have been closer than the 1998 vote, an uncertain but potential victory by our opponents would have put a majority of the Senate on record as supporting a .08 mandate, strengthening Senator Lautenberg’s position and providing leverage in the conference committee.

NBWA has been working closely with the Beer Institute and brewers on this issue. NBWA’s next step is to communicate with both the House and Senate Democratic and Republican leaderships and those members who will be appointed to the conference committee, expressing our opposition to the federal mandate.

You may remember that Senator Lautenberg attempted to add similar language mandating a national .08 BAC in 1998. His effort was defeated. TEA-21, the Transportation Authorization bill, did contain a voluntary incentive program for states to implement a .08 BAC standard. Of the 25 states that have considered .08 laws over the past two years since enactment of TEA-21, only two states have enacted such laws. Legislators in many states that considered .08 laws agree that focusing on the hard-core drunk driver is a more effective approach.

NBWA will continue to educate members of Congress about this issue and advocate against federal mandates.

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The Future of Beer Wholesaling
NBWA’s New Executive Seminar Begins in October, 2000

“The Future of Beer Wholesaling: A Leadership Course” was given its first test on June 15 and 16, 2000, at the NBWA headquarters. Five NBWA Board members and several members of the NBWA staff participated in the new seminar to ensure that this program will be of the highest quality for its membership. Attendees came away with one observation – the information presented in the program is essential for beer wholesalers today and in the future. The seminar, presented by Kent McSparran and Lamont Seckman of The Denver Management Group, takes a look at several business components of beer wholesaling while giving attendees a chance to look at their own businesses and evaluate their positions.

Lamont Seckman (left) and Kent McSparran, both of The Denver Management Group, discuss issues that affect beer wholesalers.

No matter what your company’s direction is, this program shows wholesalers hundreds of ways to improve performance. The seminar is interactive, meaning wholesalers are able to share their success stories with other wholesalers on numerous topics. Name any problem that comes up in your operation, and chances are another person in the room will have experienced the same type of problem. Attendees will have the chance to share their methods in order to make the entire industry more successful.

According to Jim Riepenhoff, vice president of Riepenhoff Distributing in Jackson, Ohio, who attended the test seminar, “The program is absolutely excellent. The material is very beneficial and I encourage every owner of a beer wholesaler operation and their senior managers to attend so that they can learn what is in store for the industry and how to be prepared.”

“The Future of Beer Wholesaling” shows attendees how to calculate their own operating ratios, such as return on assets, accounts per employee and labor costs, and how to use that information to understand where their business stands compared to the average beer wholesaler in the same category. Calculating these operating ratios will show attendees exactly where their company is performing well and where it can improve.

Some of the topics that are covered are financial trends in beer wholesaling, how to become a market leader within a geographic area, the role of salespeople, how e-business will affect wholesalers and how to improve company operations to be more successful. More specifically, the seminar will show how to decipher between customers and what changes can be made in a company’s operation to ensure that every customer is happy, how to pass on company information so that all employees remain informed, how to cut costs and increase profits and how to increase efficiency by updating a company’s warehouse.

Another attendee at the test seminar, Randy Christianson, president of Beverage Wholesalers Inc., in Fargo, North Dakota, said, “The topics are timely and industry specific. Beer wholesaler principals, operational managers and general managers will all greatly benefit by attending this seminar.”

Not only will your company’s operations improve by your attendance at this seminar, you will get to choose from one of four beautiful resort locations — Palm Springs, California; Naples, Florida; Las Vegas, Nevada; and Kiawah Island, South Carolina.

Bernie Fechtel, president of Fechtel Beverage and Sales Inc. in Jefferson City, Missouri, may have summed up the seminar best when he said, “If you are in the beer business, you must attend this seminar.”

Registration is limited, so sign up now. If you have any questions or would like to request a brochure, contact Jenna Ashley, NBWA manager of education, at (800) 300-6417 ext. 126.

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Doctors to Highlight the Health Benefits of Beer at NBWA’s Annual Convention

NBWA’s 63rd Annual Convention will take place September 17-20, 2000, in New Orleans, Louisiana. This Convention will include speakers who will give attendees the most informative, up-to-date information on the health benefits of beer. Studies are consistently showing that beer has significant health benefits, but this will be the first time NBWA will highlight the issue with an in-depth look at all the research.

Dr. Margo Denke, associate professor at the University of Texas Southwestern Medical Center, will discuss the tremendous amount of research she has done on the correlation between beer and the prevention and reduction of heart attacks and strokes. Dr. Denke’s research has been published more than 50 times in the most prestigious medical journals in the country.

She will discuss several important benefits that can be derived from the moderate consumption of beer. For example, Dr. Denke’s research reveals that men and women who consume one or two beers per day have a 30-40 percent lower rate of coronary heart disease than non-drinkers. She also reports that moderate consumption of beer will increase HDL cholesterol (good cholesterol) by four percent. Dr. Denke will further compare the benefits of beer to those of red wine, showing per drink, beer and red wine contain similar amounts of antioxidants.

Dr. Denke will give an in-depth presentation on her research that will teach all beer wholesalers something new about their product. If you would like to know more about the health benefits of beer, this is a presentation you won’t want to miss.

Now that we have all of this wonderful information about beer, how do we use it? Back by popular demand, Dr. Morris Chafetz will once again remind beer wholesalers what they must do with this important information. Dr. Chafetz, one of the world’s foremost authorities on alcohol, will show attendees how to convey their newly acquired information to the public. The founder of both the Health Education Foundation and the TIPS (Training for Intervention Procedures) program, both highly touted national programs, Dr. Chafetz has also written articles in more than 200 scientific and popular magazines and has written or collaborated on 18 books.

Dr. Chafetz feels that the best way to communicate the message about alcohol and its benefits is to look at this subject in a new light. According to Dr. Chafetz, “The best thing we can do is remind people that people have always chosen to consume alcohol.” He goes on to say, “Alcohol in a bottle doesn’t have any action. Any problems that occur do so because of people, not alcohol.”

Dr. Chafetz also believes that the beer industry has always taken a negative approach toward its product. He says beer wholesalers need to look at their product in a positive light and stop looking at statistics. The problem with statistics, he says, “is that when someone gets into a drunk driving accident, only consumption of alcohol is taken into consideration, nobody cares if they were driving while they were angry or upset. On the other hand, when you mention the health benefits of beer, people mention anything else they can name and claim that alcohol consumption is just coincidence.”

Overall, Dr. Chafetz believes, “The positive benefits gained by the moderate consumption of alcohol far outweigh any of the risks.” He will show wholesalers how to overcome the myths about their product and how to make sure the public knows what an outstanding product beer is when it is consumed responsibly.

Beer wholesalers need to know the significant health benefits their product can provide. The best way to learn about these benefits is to attend NBWA’s 63rd Annual Convention.

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Ergonomics Designed by OSHA

The following is an article that appeared in the June 13, 2000, edition of the Washington Times. It is a commentary by Richard Mahoney, the distinguished executive in residence at the Center for the Study of American Business at Washington University in St. Louis and the former CEO of Monsanto Company. He is the co-author of “Ergonomics by OSHA. Ergo, Outgo by Business” (CSAB, March 2000). The article is being reprinted with permission of Richard Mahoney.

Battle lines are being drawn for what could become the new millenium’s first major regulatory confrontation between government and business – the Occupational Safety and Health Administration (OSHA) proposed new ergonomics standard – expected to become final this summer. OSHA says the new regulation will prevent 300,000 work injuries and generate $9 billion in savings each year at an annual cost of $4 billion.

Business groups say OSHA grossly underestimates the costs while overstating the benefits of the sweeping new standard. But before the war begins, let’s take a closer look.

The stated purpose of OSHA’s proposed ergonomics standard is to reduce the large number and severity of musculoskeletal disorders (MSDs). Originally the focus was on ailments such as carpal tunnel syndrome – hand problems caused by repetitive stress. Later it was expanded to a wide variety of stress and strain maladies like backache and tendonitis.

Few will argue that MSDs – some permanent – are trivial or unworthy of preventive measures. Indeed, major corporations have been working on the ergonomics problem for years because of their obvious self-interest in having healthy workers, both for reasons of workplace cost and positive employee relations. Progress has been steady, with the number of reported MSDs dropping from 750,000 in 1992 to less than 600,000 in 1997. OSHA claims the proposed standard would reduce the number of MSDs by 300,000 per year averaged over 10 years – some of the gains likely coming from existing industry trends.

While industry groups have attacked many of the elements of OSHA’s proposed rule, the major issues in the ergonomics debate came down to two:

• OSHA implies in its standard that it knows how to fix the problem: enforced dedication to solutions by management, new equipment, employee training – and the threat of an expanded compensation procedure for injured employees under the rule (up to 90 percent of pay and benefits for six months). Industry argues it is fixing what it knows how to fix and that many causes are unknown and may not even be work-related.
• OSHA reports that the cost of the new ergonomics regulations would be approximately $4.2 billion per year and would bring annual benefits of $9 billion from higher productivity and fewer lost-time injuries. Industry argues that the costs could well be 10 times higher – or more – and that the benefits are overstated.

For example, the Employment Policy Foundation (EPF) estimates the costs between $35 billion and $99 billion per year. A consultant for the Small Business Administration (SBA) puts the costs anywhere from 2.5 to 15 times higher than OSHA’s estimates. The Association of Food Distributors International (FDI) estimated the cost between $384 million and $22 billion per year for their membership of 800 distribution centers alone. The FDI estimates for one kind of work site cannot, of course, be extrapolated to the 1.9 million sites covered by OSHA, but the arithmetic is instructive: Using FDI’s low-end range, the cost for 1.9 million locations would be $1 trillion. Even cutting the cost to 10 percent of FDI’s estimate, the total cost to employers would be $100 billion.

On the benefits side, after correcting for only one of OSHA’s assumptions, which they believe to be inaccurate, EPF estimated 10-year cumulative benefits at half of OSHA’s $69.5 billion. The consultant for SBA estimated that preventing one MSD saves only one-seventh of OSHA’s estimate of $22,546 per case.

Where does this leave us? No matter which formula is used, the OSHA costs seem greatly understated and benefits at least somewhat overstated. But worse, OSHA has decided to impose a series of far-reaching and expensive regulations to “solve” a problem that will be partially solved by existing industry momentum. In any case, it will likely not be solved by their prescription of forms, reports and management training – in a “one size fits all” process – despite their claims of “flexibility.” In my experience as CEO of a major corporation, I could not impose a “uniform safety solution” even within my own company. The best results came when the managers were motivated to solve their employee safety problems with local solutions based on priority support from top management and good information as to what had worked elsewhere. People who work in facilities don’t want to be unsafe; they want help to let them adapt practices that make them safe.

There is a solution to this coming OSHA-business impasse. OSHA could provide an invaluable service by doing two things:

• Collaborating with the National Institute for Occupational Safety and Health (NIOSH) in the Department of Health and Human Services to conduct serious studies into the real causes of MSDs. Some studies have been done but many more are needed.
• Providing a clearinghouse for collection and dissemination of research and industry experience on “what works” in dealing with ergonomics problems – particularly for small businesses. OSHA has issued a few well-written individual case studies – but they claim there are more than 100 classes of injuries to be dealt with.

In the absence of these positive steps, we will invariably find a protracted battle among regulators, business, Congress and the courts “settling the issue” while avoidable injuries continue.

If OSHA persists in its bureaucratic, one-size-fits-all form and process-laden proposal – instead of using resources to really help by being a reliable source of best practices – it will reinforce the fear employers feel when they hear, “I’m from the government and I’m here to help.” Wouldn’t it be a refreshing change to hear that same phrase and believe it.

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NBWA sent a letter to Transportation Secretary Rodney Slater asking him to extend the public comment period for the Department of Transportation’s (DOT) proposed regulations that would revise current regulations for hours-of-service for commercial drivers. Secretary Slater has agreed to extend the comment period by 90 days, bringing the close of the comment period to October 31, 2000. NBWA and coalition allies are pleased with the outcome and feel that the extension is a good sign for all parties concerned.

When the Senate voted on the Transportation Appropriations bill that included Senator Frank Lautenberg’s (NJ) .08 BAC federal mandate, Senator Richard Shelby (AL) included a provision that would prohibit funding the DOT with the necessary resources required to implement the new hours-of-service regulations. The House version of the bill does not include a similar provision, and NBWA will work with coalition allies to ensure that the House agrees to maintain that language as part of the overall Transportation Appropriations bill.

NBWA will continue to work closely with coalition partners to monitor the progression of these proposed regulations.

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Adam Chafetz, president of TIPS, speaks to congressional staffers.

On Monday, June 19, 2000, NBWA held another Capitol Hill Education Series event. Over 70 congressional staffers from both Republican and Democratic offices attended the event, as did Representative Howard Coble (NC-6).

Adam Chafetz, president of TIPS (Training for Intervention Procedures), presented a training session similar to the one he presents to bartenders on how and when to intervene when a person is intoxicated. The program was very interactive. The staffers were shown videos and then discussed when a person is showing signs that they have had too much to drink. Staffers were also shown videos of situations where bartenders and friends took steps to help someone who was intoxicated. The group discussed the best things to do when someone has had too much to drink.

The educational training seminar was followed by a reception where congressional staffers mingled with the NBWA staff and all enjoyed America’s beverage. NBWA plans to host two additional seminars before the end of the year.

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The following article appeared in the June 8, 2000, issue of Capitol Comment, a publication by Citizens for a Sound Economy Foundation. NBWA supports the Foundation’s efforts to repeal the unfair estate tax.

No section of the tax code is more unfair and more dangerous to our entrepreneurial economy than the death tax. With rates as high as 55 percent, the death tax punishes people who build a successful business or farm and try to leave that legacy to their kids. Moreover, the death tax’s modest contributions to the federal treasury are dwarfed by its staggering impact on the U.S. economy.

Last week lawmakers in the House of Representatives voted to bury this destructive tax when they supported H.R. 8, “The Death Tax Elimination Act,” sponsored by Representative Jennifer Dunn (WA-8) [and Representative John Tanner (TN-8)], which would phase out the death tax over the next 10 years.

The reasons to eliminate the death tax are simple:

1. The death tax is unfair. In 1996, 53 percent of the death tax returns were for estates valued below $1 million, and 96 percent of the returns were for estates valued below $5 million. These business owners are not the Rockefellers and Carnegies; they are our neighbors, community leaders and role models.
2. The death tax is a tax on American values, a virtue tax, a tax on the American dream. Typically, the owners of small businesses and farms plow much of their profits back into the business. This means that, at the end of the day, their kids have inherited a business that is asset rich, but cash poor. According to Heritage Foundation economist William Beach, “investing in a business is one of the many forms of saving for the future and it is the only form for some families. For most small firms, every available dollar goes into the family business – the dry cleaning business, the restaurant, the trucking company – because the business creates an income for the owners and an asset for their children. The financial security that these family-owned and small businesses provide is put at risk if the owner dies with a taxable estate.
3. The death tax is anti-jobs and anti-entrepreneurship. The death tax is a leading cause of dissolution for most small businesses. One-third of small business owners today will have to sell or liquidate part of their business to pay estate taxes, and half of those who liquidate will have to eliminate 30 or more jobs. Is it any wonder, then, that 70 percent of all businesses never make it past the first generation? Or that 87 percent of all businesses do not make it to the third generation?
4. Minority-owned firms are particularly hard hit by the death taxes. A Kennesaw State survey shows that 58 percent of minority businesses anticipate failure or problems when encountering death taxes. In addition, while 90 percent of these business owners know about these burdensome death taxes, only two-thirds of the survey respondents have been able to take precautionary steps to lessen their exposure to these taxes.
5. The death tax collects only a small percentage of federal revenues. Indeed, this year the Congressional Budget Office projects that the death tax will collect roughly $30 billion this year, just 1.5 percent of total federal revenues. Surely, with as much as $1.8 trillion in non-Social Security surpluses being projected over the next 10 years, Washington can afford to return a penny on the dollar of federal tax revenues.
6. The compliance costs of the death tax actually cost the economy more than what it collects for the U.S. Treasury. Studies have found that the death tax’s compliance costs amount to more than 30 cents for every dollar collected. That means that for the $30 billion the tax will raise this year, the cost to taxpayers will be nearly $40 billion.
7. There’s a lot of people getting rich off the death tax. One report found that at least 16,000 members of the American Bar Association cite trust, probate and estate law as specialties.
8. The death tax is anti-family. As the economist Alan Reynolds said, “we tax generosity within families. . . even as we encourage people to deduct gifts to strangers.” That doesn’t make sense does it?
9. Repealing the death tax would create new jobs and spur the U.S. economy. The non-partisan Tax Foundation has found that death taxes have “roughly the same effect on entrepreneurial incentives as a doubling of income tax rates. In other words, income tax rates would need to be nearly twice their current levels to produce the same disincentive effects as the current estate tax.” And a study by George Mason University Professor Richard Wagner showed tremendous economic gains from eliminating death taxes, because repealing the death tax greatly reduces the cost of capital. In fact, Wagner’s study forecast that within eight years of repealing the death tax, the U.S. economy would produce $80 billion more in annual output, create 250,000 additional jobs and increase capital stock by $640 billion.
10. The death tax is out of step with our new investor-based economy. With nearly half of all American households now invested in the stock market, it is possible that millions of average families will soon retire with estates large enough to be hit by the death tax.

Repealing the death tax is the right thing to do for American family farms, businesses and the new economy. It is also the right thing to do to protect American values at minimal cost to the U.S. economy.

A vote on repealing the estate tax now moves to the Senate. NBWA is working to educate the Senate on the importance of repeal. President Clinton has vowed to veto the legislation.

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During the month of June, NBWA President David Rehr and Vice President Craig Purser, spent several days in the Lone Star State. Both Rehr and Purser traveled to Dallas for the annual meeting of the National Conference of State Liquor Administrators (NCSLA) and to visit local wholesalers.

(L-R) Purser, Greg LaMantia, Joe LaMantia and Rehr at L&F Distributing in McAllen, TX.

While in the Dallas-Ft. Worth area, the two visited Coors of Ft. Worth, Miller Brands of Dallas, and met with the owners of both Willow Distributing and Ben E. Keith in Dallas. While attending the NCSLA meeting, David Rehr addressed the group with a presentation titled “Regulation and the Beer Market: Maximizing Consumer Benefit.” He outlined how exclusive territories and state franchise laws allowed for greater consumer choice at competitive prices. Rehr also told the group that NBWA was anxious to work with its state association allies and regulators to strengthen the three-tier system and defend it in the courts.

Following the NCSLA meeting, Rehr and Purser traveled to South Texas to participate in the Wholesale Beer Distributors of Texas (WBDT) Board of Directors meeting.

While at the WBDT meeting, the two spoke with Texas wholesalers about a variety of issues, including OSHA’s ergonomics regulations, repealing the death tax, the Federal Motor Carrier’s Administration’s Hours-of-Service Regulations and the 2000 elections.

Many Texas wholesalers expressed strong support for their governor, George W. Bush, and his presidential campaign effort. While in South Texas, Rehr and Purser visited both Valley Beverage, owned by Neal Runnels, and L&F Distributing, owned by the LaMantia family.

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