Ralph at Tuthilltown

Hi Steve: You are right, the law is contradictory at worst, ambiguous at best. All indications I have received by the State are that "primarily" may be interpreted as more than 50%, though as you rightfully point out the statute says "entirely". We were required to acquire three (3) NYS licenses in order to sell all our products at our tasting and sales room: A-1, which permits us to use non-NY raw materials; DD, which permits us to sell NY State products made under the DD license (primarily NY raw materials) in our shop but does not permit sale of non-NY raw materials made goods like our Single Malt and our Rum; and our Farm Winery (latest acquisition) which permits us to sell ANY NY State branded spirits regardless of the source of the materials. So if you are choosing license classes under current law, your best bet is to get the A-1 and the Farm Winery license, this combination gives you the broadest choices with the least number of licenses. Yes you are correct about the A-1 and DD licenses and the wholesale aspect, though the licenses only give you the opportunity to APPLY for a wholesale license, so you must also make that application, I believe there is no additional fee, but you have to go through the submission and application process (don't ask me why, they will already have your info, just they have not the wherewithal to go to the file and look up all the data already on file, absurd but true). You should also contact the Governor's office, and your local legislators to urge them to get the SLA Chief Counsel to include the distillers in his process as he writes the new ABC Statutes. I have forwarded to the Gov's office the following: Immediate concerns: 1. Involvement of Small Producers in the rewrite of ABC Law now underway at the SLA Legal Division to ensure small Producers needs are considered; 2. Level the playing field so all micro/farm/craft producers all enjoy the same treatment under law (Example one: wineries and brewers pay to register their labels once at a lower rate than distillers, and distillers must reregister every label every year at $250 per label/brand, the same rate as the major producers pay, and since variety is an advantage producer this can become a major annual financial burden on the small startup Distiller, discouraging creativity and variety by making it an annual financial burden. Example two: wineries and brewers may sample and sell goods at farm and greenmarkets. Distillers are excluded from these marketing opportunities.) 3. Cut paperwork, the SLA and the Tax Department should rely upon the electronically filed twice monthly reports to the Fed for tracking the work and production of small NYS producers since the Fed reports are more comprehensive than the State reports; amend State label registration process to match the Fed, so label approvals would follow the Fed approval and not require vetting by the State (which typically takes two months or more after the Fed approval is received); streamline the applications process (the State application process duplicates the Fed Basic Permit application, but applicants must first await the Fed Basic Permit before beginning the State process which typically takes four to six months and often longer, unnecessarily.) Another example: Label registration; brewers and wineries pay a lower registration fee, register their brands once and are not required to refile and repay annually. Micro and Ag Distillers must pay $250 a year per brand label. It is the soul of the small distiller to be innovative and explore new uses for agricultural raw materials; this ridiculous inequity between wineries/brewers and the distillers discourages innovation and penalizes prolific producers who make a broad range of products from NY Ag raw materials, thereby limiting the range of experimentation for the producers, and variety for the consumer. Longer term concerns: • Licensing of Producers should be reassigned to the Department of Ag and Markets, this is already suggested by Ag and Markets, it should be pushed through. The SLA is simply not equipped to understand or work with the problems faced by small farm and micro producers. This transfer of regulatory responsibility would also settle once and for all the question of the nature of the Producers’ operations as FARM operations and their products as FARM PRODUCTS; • Move all reporting and all forms online and get rid of the cumbersome and slow paper and mail system now in place. Make all information from reports public and accessible in Summary form to the licensed Producers so they may benefit from the compiled industry information and put that information to use; • Change SLA mentality, which is: the Permittees are dishonest and will break the law. Current interpretation of the ABC law (which interpretation is mandated to the SLA by ABC Law) is based on the premise: If it is not written explicitly in the law that a permittee MAY do something, they may NOT regardless how benign the action or how it may benefit the State and the Producers. This is counter to all other interpretations of Law. The existing mentality of the SLA is an assumption a Producer will break the law. It is an insult and violates all notion of “innocent till proven guilty”, a basic tenant of the Constitution; • Revision of the License structure, so there is one “Producer” license, fees based on the volume of production in “proof gallons” (matching the Fed, presently all Fed reporting is based on “proof gallons” but the State requires reports in both proof gallons and wine gallons forcing compliance managers to recalculate all production numbers for the State which are already clear and accounted for with the Fed in proof gallons, the industry standard), again, leveling the playing field among the small Producers of all categories. (Example: We must carry the A-1, DD and Farm Winery licenses in order to sell all our goods to Farm Wineries and to sell all our own products at the distillery tasting room. We are forced to make 50 gallons of wine a year to maintain our Farm Winery license in order to sell our Single Malt and Rum at the distillery shop; our Farm Distillery license enables us to sell only products made with primarily NY raw materials but a Farm Winery can sell ANY New York State branded spirits.) There needs be more voices than mine speaking into the ears of legislators. The major impacts to remind the legislature and Governor are on: Agriculture, small farms New markets Rural Economic Development Entry level jobs in rural areas Tourism potential TAX REVENUE Please contact your legislators and sing this chorus. Persistence is the ONLY WAY this will be addressed. Good luck. Keep in touch. Ralph

Update on New York Legislative and Regulatory undertakings. Working through Assemblyman Cahill's office, we are lobbying the SLA to permit FARM DISTILLERIES to offer sampling and sales (for off premise consumption) at Farm Markets, Greenmarkets, the upcoming NYS Harvest Fest and various other events off site, similar to the opportunities enjoyed by the wineries and brewers in New York State. Assemblyman Cahill's office informed us the Chief Counsel of the SLA directed us to the Statute: 99-B1K of ABC Law which reads (excerpt of pertinent part): 1.The liquor authority is hereby authorized to issue a permit to: k. A person to purchase, receive or sell alcoholic beverages or receipts, certificates, contracts or other documents pertaining to alcoholic beverages, in cases not expressly provided for by this chapter, when in the judgment of the liquor authority it would be appropriate and consistent with the purpose of this chapter. The SLA noted that it is possible to acquire a single annual permit, rather than requiring producers to apply for each individual event. However, the application which is available on the SLA website under SPECIAL PERMITS in the QUICK FORMS FIND section, is obviously geared to the single stand alone permit for a single event; asking for such info as: site plan, menu, producer, type of event, number of attendees. All these have only one answer for the annual permit: "Various". It is a certainty, at this point, filling out the form with the word "Various" in response to these types of questions will result in a Rejection of the application. Contacting the SLA office to inquire how to proceed I was informed the issue is indeed not settled. The statute is unclear on spirits sampling by Farm Wineries, though the Farm Winery license permits the Farm Winery to sample and sell NY State Branded spirits and in our opinion should also extend to off site event participation, per the initial response of the SLA Chief Counsel. We have recently acquired our NYS Farm Winery license since Farm Wineries have broader latitude in what the winery can sell at the winery tasting room (specifically NY State branded spirits) than the Farm or the A-1 Distilleries enjoy. This is being explored now. Stay tuned. The ability to sample and sell NY State branded spirits at farm markets and greenmarkets and fairs including those County and State fairs provides the new Farm Distiller an opportunity to introduce regional NY State products to the general public. It is also, and more importantly in the big picture, another step in leveling the playing field among NY State Alcoholic Beverage Producers. It is our position there may be no discrimination among the three categories of agricultural alcohol producers. Alcohol is alcohol, regardless of proof or source. Ralph Erenzo Tuthilltown Spirits

Remember rule number 1 of the "Confidence Man": The goal is not to gain YOUR confidence; the goal is to get you to feel like THEY trust you. We too get these requests. They are obvious scams. We do a fair amount of export to the EU and Australia. Never in all our dealings has a legitimate distributor approached us in a manner such as the scammers use. Every legitimate inquiry is either by phone or email and the potential client has a website, can be verified and knows the proper method for export. The facts that all the inquiries are essentially the same, same type of approach, in some cases the same copy should tip you off. Beware. The best suggestion, aside from "know your client", if you do respond to a request, is to require a standard bank letter of credit before you ship anything more than a sample.. We require 50% payment WITH THE ORDER, and the balance covered by a LOC and due 30 - 60 days from the day the goods ship from our dock. We have had no real problems following this method. R

I wouldn't count on Charlie Rangel's help on this. Check the thread on the investigation into his sweetheart deal with DIAGEO. We've been working with Sen. Gillebrand (NY) office and Congressman Hinchey (NY) on this for about a year now. We are attempting to get the case before the Ways and Means Committee and the Ag Committee. As commented earlier in the thread CONTACT YOUR FEDERAL LEGISLATORS and keep on them about it. A single letter or email won't do a thing to help the cause. Persistence counts. Be the squeaky (and polite/diplomatic) wheel. R

Rangel's foreign scam ignored by ethics committee Source: The Examiner August 15th, 2010 3:06 pm Perhaps the most serious violation perpetrated by Rangel is being ignored by Congress and the media. While the focus of Democrat Congressman Charles Rangel's ethics charges center on doing legislative favors for donors and failing to pay taxes, his most troubling lapse -- enriching a foreign liquor company with billions of U.S. tax dollars -- continues to be largely ignored, according to a non-partisan watchdog group. A national survey of 1,019 Americans reveals that a clear majority of members of all political parties reported that Rep. Charles Rangel of New York is guilty of the ethics charges brought against him by the House ethics committee. The study which was conducted among self-reported Democrats, Republicans and Independents during July 29-30 by HCD Research revealed that the majority believe that Rangel is guilty, including 67% of Democrats, 87% of Republicans and 86% of Independents. The House Ethics Committee's recent charges against the veteran Democratic congressman from Harlem fail to mention his most serious transgression, one that will end up costing U.S. taxpayers about $6 billion, according to Judicial Watch, a Washington, DC public-interest group. Rangel helped mastermind a shady deal that gives London-based conglomerate Diageo billions of tax dollars to relocate from one unincorporated American territory (Puerto Rico) in the Caribbean to another (Virgin Islands) for no apparent reason, according to attorneys at Judicial Watch. "Uncle Sam will give the European booze maker nearly $3 billion in tax credits and benefits, help it build a new $165 million state-of-the-art rum distillery, allow it to take half of the Virgin Islands' rum-tax money, a 90 percent income-tax break and a property tax exemption," said Judicial Watch officials in a statement. Rangel's move will drastically boost Diageo's already lucrative profits -- and cheat the U.S. government out of much-needed tax revenue -- because it will slash in half the amount of taxes the liquor company currently pays for each gallon of rum. For years the rum has been produced in Puerto Rico, where a law caps the amount of tax rebate that can be kicked back to manufacturers. The Virgin Islands have no such rule, making it a far more profitable place to do business. When lawmakers got wind of Diageo's new accord, many led an effort to pass legislation limiting the amount of rum tax money that can go to corporations since the funds go back into the community to pay for things like schools and environmental preservation. Rangel, who at the time chaired the tax-writing House Ways and Means Committee, blocked the measure thereby preserving the unscrupulous Diageo deal. Essentially, Rangel diverted money from U.S. schools into tax breaks for a liquor conglomerate, according to Judicial Watch. Meanwhile, the Virgin Islands governor who helped broker the deal is also facing a litany of ethics charges for misappropriating federal funds. "This is not to say that Rangel's other corrupt acts aren't relevant. After all, the 20-term congressman is under investigation for tax evasion, using his office to raise money from corporations with business before him, illegally accepting multiple rent control apartments in his New York district and hiding more than $1 million in assets," claims Judicial Watch officials. Rangel's alleged corruption, which President Barack Obama recently called "very troubling," got him booted as Ways and Means committee chair and inspired the commander-in-chief to hint at resignation for the sake of leaving public office with "dignity." Others believe the Democrats wish him out of the picture before facing a tough election cycle.

FREEDOMWORKS F0undation Releases Analysis of new legislation aimed at thwarting Wine shipments Source: Freedomworks Jul 28th The CARE Act, H.R. 5034, shores up monopoly profits at the expense of consumers who would face higher prices and fewer choices in the marketplace FreedomWorks Foundation has published a new study examining the detrimental effects of the Comprehensive Alcohol Regulatory Effectiveness (CARE) Act, H.R. 5034. Introduced by Rep. William Delahunt (D-Mass.), the legislation is a clear example of economic protectionism designed to shore up the monopoly profits of beer, wine, and spirits wholesalers, much to detriment of vintners, craft brewers, small distillers, and consumers, who will face higher prices and fewer choices. "It seems that cronyism is still alive and well in Washington, D.C.," said Wayne T. Brough, chief economist and vice president for research at FreedomWorks Foundation. "This legislation is a classic example of rent-seeking, or special interests using the power of government to thwart competition and shore up monopoly profits. Unfortunately, consumers will bear the burden of this legislation, which is nothing more than economic self-interest on the part of the wholesalers." More specifically, the legislation is an attempt to overturn the legal victories that have opened the door to direct shipments of wine in 37 states and the District of Columbia. A copy of the new study, "No Wine Shall Be Served Before Its Time-At Least Not Without Wholesalers Taking a Cut," is available at: \http://www.freedomworks.org/files/Microsoft_Word_-_CARE_Act_IA_Final_Format.pdf

Steve, We've been doing a fair amount of work in NYS on this topic. Self distribution is permitted in NY for certain license classes, wineries, distilleries and brewers holding certain permits. We see this as a complete contradiction of the three tiered system. Furthermore, we can find no mention of the phrase "three tier system" in either Federal or New York State law. Not a single reference. Perhaps I'm missing it and someone will point me in the correct direction. We've let our distributor manage interstate sales, relying on the distributor in each of the States to which we ship to deal with the State to State differences. It is unlikely changes at the Federal level will affect individual States, since each has control of their own distribution laws and the call "States Right!" is quick to surface3 when the notion of Fed vs State control pops up. We focus on the facts when lobbying, stressing the need for update of laws, the economic impact (get numbers), tourism development, small business support, agricultural development. Make the point this is NOT solely about alcohol. These other categories represent the full picture of the impact of small alcohol industry development on the State. Ralph

Those following the progress of HR 5034 may find the following update enlightening. Please consider the following and contact your Senators and Congressmen: FROM FREE THE GRAPES NEWSLETTER, RE: HR 5034: Editor's Note: Stop HR 5034..."For the Children"?? You know the battle over wine or alcohol legislation has begun to move into its true political stage when "the children" have been co-opted. Recently a collection of civil rights organizations weighed in on H.R. 5034 in a letter to Representative John Conyers, Chairperson of the House Judiciary Committee where this bill will be heard. Their message: Support H.R. 5034 and save the children. In their letter the civil rights group wrote, "By stripping state and local governments of the power to effectively regulate alcohol sales, the foreign-owned breweries and big retailers are putting our communities and our children at risk. Without these laws, shopping malls, department stores and discount retail outlets could effectively transform into bars, providing teens easier access to alcohol at almost any hour of the day." It goes without saying that states currently have extraordinary powers to regulate the sale of alcohol to children. However, it should not go without saying that no states or local governments have been stripped of their power to "effectively regulate alcohol sales." The claim that H.R. 5034 is necessary to stop deregulation is a flight into Fantasyland and the biggest lie being perpetrated by proponents of H.R 5034. It should be noted that over the past 20 years, America's alcohol wholesalers and distributors and their allies have consistently claimed that allowing direct to consumer sales will lead to children accessing alcohol. Yet, no member of law enforcement and no alcohol regulator has ever claimed or shown evidence that they are confronting any serious problems with minors obtaining alcohol in this fashion. Not once. Crying "Save the Children" simply won't work and is clearly a desperate move. Tom Wark, Executive Director Specialty Wine Retailers Association ________________________________________ HEARINGS ON H.R. 5034 It appears that H.R. 5034 may get a hearing in the House Judiciary Committee on July 14th. This is the word being spread and both proponents and opponents of H.R. 5034 are gearing up to be in Washington, DC on that date to testify, although no official date has been set. Currently the House Judiciary Committee staff is creating a list of those they will be inviting to testify at the hearings. Most certainly, given this hearing will center on the three-tier system and how H.R. 5034 may affect and protect that system of alcohol distribution, it is expected that representatives from all three tiers will be invited. To exclude fair representation of any of the three tiers (producers, wholesalers, retailers) would delegitimize the upcoming hearings. It's likely a number of organizations and associations will ask to testify. Specialty Wine Retailers Association has made it clear to the appropriate staff members of its desire to testify. What is unlikely is that any consumer representatives will be on hand to testify. This is unfortunate. The committee hearing is likely to be broadcast over the Internet and we will make readers of this newsletter aware of where they can view the hearings over the Net. ________________________________________ DEBATING H.R. 5034 Late last month the National Conference of State Liquor Administrators held their annual conference in New Orleans at which a debate over H.R. 5034 took place. The debate was called by many in attendance, the most contentious discussion this body of alcohol administrators from across the country had witnessed in years. Steve Gross and Marc Sorini of the California Wine Institute represented opponents of H.R. 5034 while Craig Wolf, president of the Wine & Spirit Wholesalers Association, and Paul Pisano, General Counsel of the National Beer Wholesalers Association represented the proponents of the bill. However, there were also many comments and discussion from audience members at the seminar. Among the points made: -Sorini called it a "myth" that state regulations are under siege as distributors claim and is one of the reasons they give for supporting the bill. Sorini notes that no laws regulating the licensing, background checks, restrictions on where and when alcohol can be sold or any other basic tenets of the three tier system had been struck down by lawsuits. -Wolf and Pisoni complained that no members of the alcohol industry had come forward to offer changes or amendments to H.R. 5034. -Gross noted that it was not opponents' job to help get the bill passed, but rather they oppose the bill and it is their job to help assure the bill is not passed. -Gross argued that H.R. 5034 goes far beyond what wholesalers claim it will do including allowing states to pass any alcohol related laws whether they violate the commerce clause or "any act of congress". Within the industry, lines over H.R. 5034 have been clearly drawn and this exchange makes it clear that on the proponents side of the line stands only wine wholesalers. ________________________________________ AMERICA'S ALCOHOL PRODUCERS JOIN FORCES In what is a nearly unprecedented action, representatives of America's wine, beer and spirit producers have come together on a single issue: H.R. 5034. The Brewers Association (small and independent brewers), The Beer Insittute (large brewers), the Distilled Spirits Council of America (spirit producers and importers), The Wine Institute (California wineries) and Wine America (wineries in all 50 states) came together on June 23 to issue a statement to Congress opposing H.R. 5034. "We the undersigned beer, wine and spirit producers representing virtually all alcohol producers in the 50 states respectfully request you preserve the effectiveness of the existing state-based alcohol regulatory system—and support the Constitutional principles that protect the marketplace against discriminatory and anti-competitive state laws—by rejecting H.R. 5034." The letter goes on to state the primary problem with H.R. 5034: "With H.R. 5034 NBWA [beer wholesalers] and WSWA [wine wholesalers] want to put brewers, wineries, distillers and retailers at a competitive disadvantage; allow states to unfairly and arbitrarilly enact protectionist laws against out-of-state beer, wine and spirit producers; and preempt federal oversight of alcohol. Specifically, H.R. 5034 would allow states to pass laws that violate the dormant Commerce Clause, federal anti-trust laws and any other Act of Congress." The statement is a powerful one and likely to carry great weight with those representative that will eventually consider the merit of H.R. 5034. ________________________________________ MEET THE OPPONENTS OF HR. 5034: Family Winemakers of California Family Winemakers of California represents hundreds of small and medium sized wineries across California. The organization has been instrumental in protecting the unique interests of smaller wineries and played the key role in helping to overturn a Massachusetts law that discriminated against out of state wineries wanting to ship wine to MA residents. Family Winemakers of California very quickly came out against H.R. 5034 after it was introduced into Congress. In explaining their opposition to H.R. 5034, Family Winemakers of California noted: "H.R. 5034 would fundamentally change the way discriminatory laws are challenged in court. It would essentially allow the 21st Amendment, which gave the states the right to regulate alcohol, to trump the concerns of the Commerce Clause. The burden of proof to challenge a facially neutral law that discriminates would be so narrow that litigation would wither and put interstate commerce in wine at jeopardy. The bill is a naked attempt to dominate the marketplace and change consumption patterns. It puts at risk most of the 7,000 wineries in the nation." ______________ Okay Micro Spirits Producers, above is your ammunition. Your assignment is to contact your State Representatives and make the point this is bad law, prejudicial, monopolistic; it attempts to circumvent the intent and the precedents set related to the Commerce Clause of the Constitution. It opens the door to further contradictions in law between States, which then serve to exclude the small producers who can not afford legal teams of conformance experts and retired TTB folk to help them sort through the changes and differences in law from one State to the next wrought by HR 5034. Those of you DSP operators trying to expand your distribution beyond your own State already know the problems with interstate compliance. A public hearing on this bill would open opportunity for a public discussion on the so called "three tiered system" as mentioned in the newsletter copy. This may well be a perfect case where the Emperor has no clothes. "Hey, that System hasn't got any pants on!" R

Fact is that anyone can file for the Farm Distillery or A-1 licenses which also includes ability to acquire a WHOLESALE license at no additional cost and they're in business in NYS. ABC law in NY and Federal alcohol law often contradict one another. Your example is spot on. Another example, Federal law technically prohibits the combination of a tasting room and winery or distillery or brewery; yet there exists a network of wineries and breweries and distilleries across the us in clear violation of this Federal regulation. The "system" is ignored when convenient and invoked to qualify decisions as necessary. It is not a question if the system is in situ by tradition, practical use. If there is no mention in the Law, the requirement is either by habit or Regulatory. Not suggesting it is an actual "hoax", not a conspiracy theorist. But the promotion and continued invocation of the hallowed "Three Tier System" appears to have all the identifying characteristics of an "urban legend"; "Oh, you can't do that or the Three Tier System under your bed will get you." The question is: Does a mandated, so-called "three tier system" exist in law at either the Federal or any particular State level? I can find no reference to it in NY Law.

Just received the following in response to my request the US INTERNATIONAL TRADE ADMINISTRATION intervene in the "absinthe" issue: Mr. Erenzo, I wanted to inform you that an official objection letter has been submitted by the U.S. Government to the Swiss Federal Office of Agriculture regarding the proposed designation of “Absinthe” as a protected geographical indication in Switzerland. We object because the proposed name for registration is generic. We will stay in contact with you regarding developments. Jen Levine Desk Officer Office of European Country Affairs International Trade Administration tel: 202.482.0431 e-mail: jen.levine@trade.gov

The SLA in NY refers in many circulars and the SLA representatives and counsel often refer to the "three tier system", deferring it always seems to the Federal mandate to which they must defer. But it seems now this is not the case. The general confusion over the actual existence of a so-called "three tier system" as a codified, so named "thing" has all the appearances of a big misunderstanding at best, or a big lie at worst. Perhaps it is time to call the whole thing into question in a serious way. All evidence is that the only opposition to free market legal alcohol commerce on a National basis is to put the question out there. "Does the Federal Government mandate any such so called 'three tiered system' for the control of alcohol production, sales and distribution in the US?" The other question: "Does (your State) mandate an actual, so named 'three tiered system' for the sale and distribution of alcoholic beverages in the State?" My cursory review of NY State ABC Law reveals no legislative mandate mentioning the system. If the phrase even exists in NY State law, I can't find it. It may be an invention of the SLA under it's assigned duty to "promulgate regulations" which describe how the law is to be enforced. But that is not the same as "the Law" enacted by the Legislature and signed by the Governor. Is the "system" a big hoax, or misinterpretation so long in place and so ubiquitous it goes unquestioned? Or are we just all not seeing it, please if that is so, someone point us all in the right direction.

That is an interesting observation. The States report a Federal obligation, but regularly ignore it. This information sheds new light on the question of the system nationally. The States, like NY, seem to have the collective opinion the Three Tier System is their bible, the untouchable rule. From the small producer's point of view, this is entirely in favor of the wholesalers. For us, the system is an anti-competition system, no longer the "protection" it was originally supposed to be. The world is changed. Business has changed. It's time for individual States to change, rewrite alcohol law. The most, correction, the ONLY way this will happen is with the pushing and prodding and lobbying of the small distillers who show their actual faces, the new Face of spirits production (small producers with families employing locally, using local raw materials) get their issues before their State Legislators. Point away from alcohol and to: tax revenue, rural economic development, tourism, tax revenue, jobs creation, agriculture preservation, TAX REVENUE! (Oh, did I say that already?)It is possible to change State laws, total amateur lobbyists that we are (were) we managed to change NY State Law, more than once in favor of the small producer. And if it's possible in NY, it's possible elsewhere.

Thanks Chuck I agree. The debate on the "three tiered system" continues. The wholesalers believe, rightfully, it will eliminate the monopoly they have on moving spirits in and out of States; they would no longer be able to control the spigot. The counter argument is specious, "the three tier system ensures controlled flow of spirits and supports temperance" which is utter bullshit (excuse me). Good wholesalers do their job and deserve their cut. But that does not mean they deserve nearly total control, which is what they have now. The small producer starting out has time and luxury (some don't consider it a luxury, we do) of going out at the start to personally introduce their products first in their home region. At some point if the producer is successful, there will not be enough time to make the juice, bottle it, pack it, make introductions, take orders and deliver the goods (we know this from personal experience); and so at that point a wholesaler becomes a partner in your biz by taking on all the logistical side while the producer concentrates on production and promotion. A good partner in distribution can make the difference between remaining a local brand, or moving out Statewide, or Nationally. That said, the "three tiered system" is arcane and unnecessary in the year 2010. When the system was introduced there was no common use of television or even telephones for that matter, no internet, no personal computers or cell phones. There was no overnight delivery of retail goods ordered by phone or internet (as with wine) Regional farms were ubiquitous. And no micro distilleries. All that is changed. In NY State micro distilling licenses come with the right to acquire a Wholesale license and self-distribute (an example how the system is fatally flawed, in NY State a micro-producer may hold a wholesaler's license, a direct violation of the Federal three tier system, a violation which the Fed totally ignores), it is how Tuthilltown launched its HUDSON brand. It was necessary. At the start, as many small producers quickly learn, we could get no distributors to give us a second look. Self-distribution allowed us to get a solid regional base, including the Metropolitan area; by which we attracted the attention of distributors. The ability of small distillers to sell into other States directly increases the ability of the producer to survive and if their product is good and accepted, prosper. And interstate commerce is a good thing. Unfortunately it raises the issue of State's rights (in this case a red herring dragged through the debate in an effort to stall it in favor of wholesalers). There are mechanisms can be employed (indeed in place) to give individual States the control over distribution they need and to which they have a Constitutional right. If the system is continued, it should not be a Federally mandated system. If the States have the right to control distribution and sales, that should also include control over the right of retailers to purchase goods legally from the producers who want to bring their goods into that State. It should be a State decision to join and insist the three-tier system in that State if it chooses, or drop the system entirely. In my opinion the three-tier system has outlived its usefulness and needs be abandoned by the Fed as a national system. The Commerce Clause should control interstate commerce with respect to spirits sales and individual States should be required by the Fed to allow interstate sale of spirits by the producers direct to the on and off premise accounts. The honest, hardworking Wholesaler will gain as the smaller producers grow and need them. There is a place for Wholesalers in the system, but they have to earn it like the rest of us, rather than have a government guarantee of their place in the world. Ralph

Practicing a skill at home, legal or illegal is all well and good. If it is illegal the practitioner must also accept that fact and be prepared to accept also the consequences of getting caught. Bill Maher may talk all he wants about smoking pot, but if he stood stage in front of an audience and on air and lit up a joint he'd probably be arrested because it's illegal. If he sits in his home quietly puffing on a number, no problem; though it's still illegal there's almost no chance his door will be battered down by the fuzz. I think the real disconnect is the difference between what one considers a hobby, legal or not; and seeking some legal sanction for that thing. To say "home distilling is legal" is not a simple thing. Once the government takes a stand that stand is subject to challenge, regulation, observation, inspection, all the things that go along with the government calling something which was up to that point illegal, suddenly Legal. I'm also puzzled why the distiller, or anyone for that matter would WANT government intervention. If you are going to do, do it, quietly; but don't expect an entire government, indeed many governments when you take the States in consideration, to overturn centuries of control law. And after all isn't the illegality of home distilling part of the point, the radical, rebel flaunting the established law to be the Maverick? Cool, if you like that kind of life. But do yourself a favor, if it's distilling you want to quietly, in your basement, wherever, that is your business. Don't expect the rest of the professionals or the distilled spirits industry to support the notion. I think I'll save my efforts and respect for those who do the work, pay their taxes and make fine spirits they can share with others. I thought the topic of Amateur Home Distilling was being dropped by this Forum. Perhaps the Admin will comment?

Welcome to the Club. The tales you tell are not new. Sometimes there needs be discussion with a supervisor to get things clear. We came up against a reviewer who insisted in multiple phone conversations with me and with my partner, Single Malt could not be made in the US, it is a product of Scotland. We ended up having to guide her to the website of another distillery in the US to show her the approved label of their Single Malt Whiskey. She said, "I'll get back to you." In short order our label was approved as it we submitted it. You're more likely to run into problems if you are launching in a State which requires a separate label review and approval, such as NY State. By way of example, a label must be approved by the NY State Liquor Authority and may not be submitted till the Federal COLA is secured; then we must send a physical copy of the State application, the Federal approval, physical copies of the labels and a bank check (no business checks or personal checks accepted) and it all goes by mail or Fedex, on paper to the SLA. The typical processing period is sixty days, if you don't hear from them in sixty days you may assume it is approved and proceed. They will not notify you of the approval unless you send them a self addressed stamped envelope to send the approval back to you; or until your official certificate arrives which is usually a month after the actual approval. And if you make a mistake on the State application, they pack up the entire package and send it all back to you by US Postal Service, including the check with a list of the mistakes. The State will not defer to the Fed because the mandates of the two are not the same. The Fed wants the excise tax and compliance. The States want Temperance, look it up, bet your State alcohol code includes a good deal of outdated jargon as the foundation of alcohol "control" law. The most important thing to keep in mind, to your earlier point about the TTB and the people doing the work there, there is a "they" behind the "it" and They are humans who have moods like the rest of us. It may sound silly and unprofessional to have to consider it, but my advice is don't piss them off. Animosity, however well earned or not, will not help your application process. Just ask nicely to speak to a Supervisor or have one phone you back. When you get a Supervisor on the phone, be clear about your question, to the point, and have the regulations in front of you so that either you can point out the inconsistency, or she/he can walk you through the regulation to understand the TTB logic behind the decision. R

Given the economic consequences to American retailers, on premise, wholesalers and importers, it is a losing battle to even threaten any action to prevent Scotch or Irish whisky from entering the US, we'd be hurting American economic interests as much as any others. And we'd be fighting those economic interests, players with far greater finances and legislative influence than we enjoy at the moment. I believe the effort should focus on quid pro quo. Or as Chuck suggested, negotiating a change in EU labeling regulations to accommodate and recognize American whiskey traditions and methods, which are as legitimate as any other traditions and history. That said, it is a very good point to raise with the Trade negotiators, the inequity of the current situation and its inference that American whiskey is not real but Irish and Scotch whisky is. Absolutely silly claim, easily disproved with a look at History. Note that the regulation in EU law allows for reopening of the discussion and changes to the regulation, or outright rejection with notice. It is a toe in the door.

Was thinking along the same lines. A simple adjustment to the EU regulation stipulating under their Labeling regulations that American Whiskeys be designated as you suggest. We'd welcome that change. And it would leave no doubt in the minds of the consumers the origin of, or the rules under which they were made. I'd also thought if the EU required an accurate age statement on goods from US distilleries qualifying the whiskey where applicable as: "Aged under Three years in Oak" or some such it would address the fear the consumers would be misled. And may I add, the insinuation (and in some cases outright accusations) the American whiskey makers are somehow trying to pull one over on the European consumer is inaccurate at best and insulting at worst. I don't know a single American distiller who is deliberately trying to copy Scotch or Irish whisky intending to hoodwink the consumers into thinking their product is anything but what it is. And to any enraged whisky Scotch and Irish whisky fans, Different is not necessarily Better or Worse; and it is most certainly is not demeaning. The best and fairest to both the EU and the US would be what Chuck has suggested. It's American Whiskey made under American regulations. With this small change there is no way for the proponents of the EU regulation to cite consumer awareness or the any possibility the great history and tradition of Scotch and Irish Whisky would be harmed in some way. It ain't Scotch or Irish Whiskey if it's from the US. It's American Whiskey, dag-nab-it.

The NEW YORK FARM BUREAU and the NEW YORK GRAPE FOUNDATION have both come out in opposition to HR 5034. Don't forget the Farm aspect of this when speaking with your Legislators. Contact your State Farm Bureau.

Point taken, Chuck. Adding may be a lot easier than taking away. I suppose it might lead to the question: is "American Whiskey" different from "Bourbon Whiskey"? Or, is it "American Bourbon Whiskey"? That is for others to parse. How might this be proposed? The EU and the US agree to a change in the EU regulation which would be on par with the US counterpart, recognizing American Whiskeys which meet American legal requirements for the distinctly different Whiskey made by US rules. I find it curious the Federal Government would approve "appellations" for Tennessee and Kentucky whiskeys in a foreign trade treaty. Gee, wouldn't I love to have "New York Whiskey" recognized as a Type by the EU; oh, but it does not confer any additional benefit after all does it? I mean, it if ain't three years old, it ain't whiskey in the EU, even it's Bourbon or Kentucky or Tennessee Whiskey which are recognized by the EU as distinct types......Huh?

Here is the section of the above noted letter of agreement as between the EU and US: A. The USA agrees to restrict, within its regulatory framework (27 CFR 5.22 or an equivalent successor regulation), the use of the product designations: "Scotch whisky", "Irish whiskey"/"Irish whisky", "Cognac", "Armagnac", "Calvados" and "Brandy de Jerez" to distilled spirits/spirit drinks products of the Member States of the EC, produced in compliance with Council Regulation (EEC) No 1 576/89 and with the laws of the Member States in which those products originate. Further, it is recognized that these products shall continue to be subject to all of the labelling requirements of the USA. B. The EC agrees to restrict, within its regulatory framework (Council Regulation (EEC) No 1 576/89, Article 11 or an equivalent successor regulation), the use of the product designations:"Tennessee whiskey"/"Tennessee whiskey", "Bourbon whisky"/"Bourbon whiskey" and "Bourbon" as a designation for Bourbon whisk(e)y to distilled spirits/spirit drinks products of the USA produced in compliance with the laws and regulations of the USA (27 CFR 5.22 or an equivalent successor regulation). Further, it is recognized that these whiskies shall Continue to be subject to all of the labelling requirements of the EC. C. The USA and the EC agree to meet at a mutually convenient time in the future to discuss the possibilities of extending restrictive recognition to additional distilled spirits/spirit drinks products which either Party may propose for such consideration. This willingness to meet and consider such requests is without prejudice to the rights and rulemaking processes of either Party. D. Both Parties agree to consult, upon request, regarding the operation of this Agreement. E. Both Parties agree to implement within sixty days of the date of your confirmatory reply all regulatory or administrative measures necessary to fulfil the obligations outlined in Paragraphs A and B above. F. Either Party may terminate this Agreement by written notification to the other Party. This Agreement shall expire twelve months after the date of such notification. It would seem sections D and F leave the door open for revision of this agreement. The disconnect in the above agreement is that paragraphs A and B are not equivalent, in that EU law is respected as to the provenance and traditions of Irish and Scotch Whiskeys, but this same respect for provenance and tradition of American Whiskey is not offered in return. Though these two paragraphs acknowledge the countries of origin and the specific laws of those countries (specifically the EU Member States and US), the EU regulations specifically state that American whiskeys must meet the aging requirements of Scotch and Irish whiskeys. In the EU regulation called out in the letter, American Bourbon and Rye whiskeys are specifically named, identified as American and then made subject to EU aging regulation, giving recognition with one hand, taking it away with the other. Chuck's idea is a good one. Simply revise the statement to read "American Whiskey" rather than specifically Tennessee and Bourbon whiskeys. And revise the applicable EU labeling regulation to define American Whiskey in the same way as we define Scotch and Irish Whiskys, deferring to the traditions and laws of the country of origin. R

From the outset when I raised this issue I have been told it was impossible to challenge this EU Law. But the change in the micro distilling community, the sudden expansion and legitimacy of new American whiskeys, as well as DISCUS' formation of a internal advisory council of micro distillers have given the issue legs. The conversation here seems agreed, at least by the US respondents; The EU can define EU based spirits but owes the US recognition of the long traditions and practices as unique to American whiskey and therefore should be afforded the same legitimate categorization in EU law which is given Scotch Whisky and Irish Whisky. As Chuck put it so well "It is absurd that while the EU recognizes "Bourbon Whiskey" as a distinctive product of the United States, it doesn't accept the American definition of what Bourbon Whiskey is." But it is a physical law of the Universe, nothing changes without Cause, Inertia. The micro distillers must take issue with this exclusionary action and call the US Department of Commerce and the International Trade officials to task. Chuck's suggested remedy is reasonable. It's American Whiskey so why not call it such? But nothing happens unless you act. Contact your Congressman and US Senators and make a stink. This is your whiskey we're talking here. Two points worth of reiteration: the new distiller needs to sell product as soon and as much as possible to survive (unless you are fortunate to have an "Angel" with deep pockets and deeper patience), and exported goods are not subject to State or Federal Excise Taxes or the cut your distributor gets. In all my trips over the pond and in all the bars I've ever sat in across Europe, 90% of those bars have one American whiskey: Jack Daniels. Bartenders welcome new American whiskey. There is a ready and willing market for new American whiskeys in the EU. R

I believe the "trademark" notation is meaningless in the US in the context of a protected mark or brand if it is not registered and approved by the USPTO. Any other more qualified than I am who can comment on this?

The following is Chuck Cowdery's comment from the Swiss/Absinthe thread, to continue the discussion here at this thread which is focused on the problem with EU law redefining American Whiskey: During the 14th century, Lithuania was the largest country in Europe. Present-day Belarus, Ukraine, and parts of Poland and Russia were territories of the Grand Duchy of Lithuania. When Lithuanians talk about returning their nation to her historical borders, guess which borders they mean? That's the problem with appealing to the "historical" understanding of something. Why should the definition that applied, say, 200 years ago, be considered superior to the current one? There was a piece of meaningless fluff on the Discovery Channel last night called "How Whiskey Made America." As far-fetched as their stories were, they were only fetched at all if you consider "whiskey" and "alcohol" synonyms. After the Civil War, the growth of railroads and introduction of the column still transformed distilling from an extension of agriculture into a fully commercialized industry. Terminology was pretty simple then. If it was made from grain it was whiskey, just like it was rum if made from molasses and brandy if made from grapes. People who took the newly-available grain alcohol (what we call vodka) and flavored it with tea, prune juice, tobacco, and other ingredients to resemble aged whiskey felt entitled to call their product whiskey too, since it was made from grain. But the people who carefully crafted a rich, low-proof spirit and flavored it with nothing but oak felt they had the sole right to use the word. The grain alcohol flavorers, known as "rectifiers," were by far the larger block. The forces for "pure whiskey" were concentrated in Kentucky and Tennessee. The battle between these two groups raged until 1909 and the Taft Decision, which represented a victory for the Taylors, Browns, Motlows, Samuels, Beams, Dants, Wathens, Medleys and other whiskey-making families. The Taft Decision codified the definitions of "whiskey," "straight whiskey," and "blended whiskey" as we know them today. Since then it has been the case that although "storage in oak containers" is required, no minimum aging duration has ever been specified. As recently as 1968 a group of producers argued for the adoption of a three-year minimum, but the Alcohol and Tobacco Tax Division (predecessor of today's Tax and Trade Bureau) rejected the proposal. The agency concluded that "it is preferable to permit the consumer an adequate basis for the selection of whiskies (even immature ones) than to limit his choice by banning them from the market. The mere desire to conform American regulations to those applicable in foreign countries is not sufficient justification for imposing the proposed limitation." (Industry Circular 68-03) The American trade representative should argue that the United States is a major whiskey-producing country, has been for hundreds of years, and has a whiskey-making heritage that developed independently of other whiskey-making traditions. Current American rules are consistent with that tradition. It is not in the spirit of fair trade to expect American producers to change their authentic and long-held practices in favor of European ones. Nor is it in the interest of European consumers, who want access to authentic American products, not proxies reformulated to pass muster with the regulators in Brussels. However, American producers need to be very careful about seeming to support changing the U.S. rules to eliminate the aging requirement altogether while simultaneously arguing that the EU should recognize American rules that require aging but conspicuously do not require a minimum aging duration. It would, however, be appropriate to argue that corn whiskey should be exempt from any aging requirement. It is absurd that while the EU recognizes "Bourbon Whiskey" as a distinctive product of the United States, it doesn't accept the American definition of what Bourbon Whiskey is. An acceptable compromise would be to allow that, in the EU, any product to be labeled "whiskey/whisky" only, with no modifier, must be at least three years old, but products labeled "American Whiskey," "American Blended Whiskey," "Bourbon Whiskey," "Rye Whiskey," "Corn Whiskey," etc., would only have to meet the requirements for use of those terms in the United States. Thanks Chuck for the qualified historical perspective and a logical conclusion.

Thank you Chuck. Totally agree.