• ASWA Government Affairs Information

    Legislative update from the ASWA – May 2021

    The Restaurant Revitalization Fund (RRF) is part of the American rescue Plan for covid relief. It has been funded at the level of $26.6 billion. These funds will be distributed by the Small Business Administration and are available to winery tasting rooms for expenses from February 15, 2020 through March 11, 2023. Eligible expenses include payroll and benefits, mortgage, rent, utilities, maintenance, supplies (including protective equipment and cleaning materials), food, operational expenses, covered supplier costs, sick leave and other expenses deemed essential by the SBA. The wine industry associations are seeking an additional $120 billion in funding. The RRF fund goes active on Mar 3 for winery applications through the SBA.

    State Legislative activity is winding down in many states. For the most part legislatures are extending the flexibilities that were reactions to the Covid shutdowns. This includes curbside pickup, outdoor tasting rooms and delivery alternatives. Not all legislation is positive. Increased taxes on beverage alcohol continues to be a strategy offset the increase in State and local funding. There is also increased interest and action on Cannabis sale and distribution. Impacts on the wine industry are still in flux, but new taxing sources could buffer alcohol from more radical increases.

    Cannabis Legalization Efforts: In the next few weeks we may see two proposals that directly impact the American wine industry, starting with the prospect of the federal legalization of cannabis. Many of the regions where cannabis is grown in the United States overlap with where a large portion of wine grapes are grown. The marijuana plant requires different care than a grapevine, including the use of certain pesticides and herbicides that could potentially damage wine grapes if they were to become exposed. Additionally, there is a significant lack of regulation (particularly at the federal level) for cannabis growth.

    From a marketing standpoint, the cannabis industry has looked to the example of the wine industry. They would like to develop appellations of origin and agritourism marketing programs in the same vein as the wine industry. The increased use of recreational cannabis could also encroach on the consumer market share wine enjoys.

    The regulation of cannabis at the federal level will also directly impact the regulation of wine and other beverage alcohol products as the Alcohol and Tobacco Tax and Trade Bureau (TTB) is the likely agency to tax and regulate the industry. WineAmerica has not taken a formal position on the decriminalization and legalization of cannabis. We continually monitor the Congressional efforts on the issue and discuss its status and implications with relevant stakeholders.

    Additionally, in may we are anticipating the introduction of the United States Postal Service Equity Act, which would allow wineries to use USPS to ship their products in accordance with state law

    The US and the EU have agreed to a pause of 4 months in the 25% tariff on various beverage alcohol trades. The pause is over at the end of July unless extended by the parties. The new US Trade Representative Kathrine Tai has signaled that the she will take on an extension seriously and report to congress on her progress.

    There is an effort to  form a group of 44 associations, trade groups and others with a rallying message of “Toasts not Tariffs.” including staff at the Distilled Spirits Council. Letters under this banner have gone out to Hill committees and members, The White House and the Administration.