Special Year-End Edition

Merry Shutdown…?

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Background Music (Andy Williams): “It’s the most won-der-ful time of the year…”

Twas the week before Christmas

And all through the House

The Members were voting

And continuing to grouse

Ah yes, after the ongoing border wall kerfluffle and the on-and-off threats of a government shutdown, here we are on the Friday before Christmas with continuing uncertainty about whether the Departments of Agriculture, Justice, State, NSA and others will be shut down and nearly a million government employees won’t be paid for as long as the shutdown lasts.

About 10 days ago, President Trump held a live TV meeting in the White House with Senator Chuck Schumer and Representative Nancy Pelosi during which he told them that if he didn’t get funding for his border wall, he’d be “proud” to shut down the government, and wouldn’t blame them (to their glee).

Then the atmosphere temporarily softened, and the Congress and President seemed to agree on a regular feature of Washington politics called a “Continuing Resolution” (CR), which some describe as “Kick the Can down the Road” when they can’t come to agreement on time. So Congress passed a CR to keep the government functioning until they have the chance to argue again.

Not so fast: After the House and Senate passed the CR, the President said he wouldn’t sign it, so it’s now back in the lap of Congress with border wall money, but that’s not likely to get passed. And, most recently (this morning’s tweet), the President threatened that it would be a “very long” shutdown if he didn’t get his way.

The deadline, when those government agencies actually run out of money, is midnight tonight, so we won’t have to wait too much longer to know the outcome.

Background Music (Children’s Choir): “Si-lent night, ho-ly night, all is calm, all is bright…”

It’s amazing what a nice, peaceful town Washington can be when the politicians go home for the holidays. Actually, a number of those who didn’t get re-elected never even returned to DC after the election (but still collected their paychecks, of course).

Now they’ll soon all be gone, and Washington will become quite a civilized place.

Background Music (Everyone, a tad tipsy): “Should auld ac-quain-tance be for-got, and ne-ver brought to mind…”

So now that 2018 will soon be just a memory, we head into a new year with a new balance of power in Washington, and the question of whether civility, compromise, and competence will ever return. Let’s hope that 2019 will be a…

Happy New Year!

2018: A Very Good Year

It seems like yesterday, but was actually a year ago that the 2017 Tax Cuts & Jobs Act was passed, including within it the federal excise tax reductions for wine, beer and spirits created by the Craft Beverage Modernization and Tax Reform Act.

Then just yesterday, the President signed the massive five-year Farm Bill that will continue to fund wine industry priorities in the areas of research, export promotion, and block grants, among many other things.

These two events are like bookends reflecting the work WineAmerica staff and lobbyists Meyers & Associates have been doing over the past few years. The success is very gratifying because it helps the industry we serve.

As Frank Sinatra would have crooned, “It Was A Very Good Year.”

As we wind up 2018 and prepare for 2019, it’s worth briefly looking backward at accomplishments and forward at challenges.

Tax Reform: For a year now, American wineries of all sizes have been saving significant money on federal excise taxes due to inclusion of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) in the Tax Cuts & Jobs Act.

WineAmerica worked closely with Wine Institute and beverage coalition partners in the beer and spirits sectors for over two years to achieve this success. Coordination with our grassroots State and Regional Associations Advisory Council, plus Oregon and Washington groups, also helped to get widespread support in Congress–with 305 Representatives and 55 Senators co-sponsoring the bill, a rare bipartisan show of support in today’s Washington.

The bill includes a series of tax credits which lower the effective tax rate on various levels of production, and may be used on sparkling wines as well as table wines. In addition, for tax purposes the alcohol by volume (ABV) limit for table wines was increased from 14% to 16%.

However, the bill is also set to expire on December 31, 2019 which, if that occurred, would reverse all the benefits.

WineAmerica Vice President Michael Kaiser is the resident expert in this area.

 *****

Glitch Fix: Alas, as often happens when complex bills are rushed through Congress at midnight, technical errors occur, and this one was no exception.

The problems had to do with the application of the new tax system to custom crush facilities and bonded wine cellars, and could have had very damaging effects. Once again, WineAmerica worked closely with Wine Institute and the Napa Valley Vintners Association to start fixing the glitches, some of which have already occurred.

It is important to note that when all the glitches are fixed, the corrected system will be retroactive to January 1, 2018, so wineries will eventually be made whole.

*****

Farm Bill: As reported last week when Congress passed it, the five-year Farm Bill is a big deal for the American wine industry, in part because its multi-year timeframe allows planning for research and promotion.

There are many provisions that could benefit our industry, but the most vital ones–funding for research, export promotion, and block grants–all ended up very well. Now our staff and lobbyists can take a few years off from this issue until negotiations begin on the 2023 Farm Bill.

*****

Trade Policy: The major result this year was part of the USMCA (United States-Mexico-Canada Agreement) which amended and replaced NAFTA. WineAmerica worked with Wine Institute to ensure that American wines could be sold in British Columbia, Canada grocery stores, which previously was forbidden.

International trade remains a very broad and challenging area, especially with respect to China, but WineAmerica will continue monitoring issues and advocating policies beneficial to American wineries.

*****

Music Licensing: WineAmerica Vice President Tara Good has been working diligently for several years to protect American wineries from unfair and predatory practices by Performing Rights Organizations such as ASCAP and BMI.

In October, the Music Modernization Act included language that protects Justice Department Consent Decrees on those companies. Tara has also negotiated with both companies directly, resulting in a winery-specific license from ASCAP as well as a 10% discount for WineAmerica members.

 *****

ADA Website Compliance: Late in the year, the New York Wine & Grape Foundation alerted WineAmerica to a new regulatory/legal issue involving winery website compliance with the Americans with Disabilities Act (ADA).

WineAmerica informed the broader industry about the issue, including through our State and Regional Associations Advisory Council, and drafted guidelines for member wineries.

*****

Membership: Perhaps because of all those and other accomplishments, 2018 was the strongest year in WineAmerica’s history for generating new memberships.

We gained over 50 new members from around the country, bringing our total to over 500 in 44 states. In addition, many new members are marquee wineries such as Channing Daughters and Wolffer Estate in New York, Duplin in North Carolina, Ste. Michelle Wine Estates in Washington, Chateau Montelena and Tablas Creek in California. We even got Bear Creek Winery & Resort in Alaska!

We also gained several new members in the SRAAC, including the Atlantic Seaboard Winery Association, Finger Lakes Wine Alliance, Napa Valley Vintners Association, and Willamette Valley Wineries Association.

*****

A Look Ahead

We accomplished a lot in 2018, but we have just as much to do in the coming year.

Tax Bill Extension: This is priority #1, because if we don’t get it extended beyond December 31 or made permanent, all the tax benefits wineries have enjoyed this year will be gone. (We will also be working on the remaining tax bill glitches at the same time.)

Trade Policy: Congress still needs to approve the USMCA, so we will be working to make that happen.

Music Licensing: There is always more work to do on this, both from regulatory and legislative standpoints.

Immigration Policy: This may be the most complex and contentious of all issues, but that doesn’t mean we can ignore it. We need to keep advocating for a stable, reliable, motivated migrant labor force for the American wine industry.

TTB Liaison: They have asked for comments on the AVA system and label-related issues, which we will be coordinate on behalf of the American wine industry.

Spray Drift from Other Crops: This seems to be an increasingly widespread problem with wineries in many areas of the country. WineAmerica will be conducting a survey at the beginning of the year to assess the extent of the problem, and possible solutions.

Membership Development: WineAmerica is stronger today than it has been in many years, thanks to an engaged Board of Directors, excellent staff, superb lobbyists, and all of our members. But we still need to grow, and we welcome wineries and winery associations from all over the country to join us.

We take care of your business climate so you can take care of your business.

*****

Secrets of Success: Prioritization, Persistence, and Partnerships form the key blend in moving legislation over the finish line. Our WineAmerica team clearly articulates the wine industry’s needs, keeps repeating that message, and joins with other groups to make it all happen.

Another reason for WineAmerica’s effectiveness in the area of national grassroots public policy is the large number of winery members from 44 states–which means 88 U.S. Senate offices and hundreds in the House of Representatives. The map below shows states where our members are from (other than those shown in white which have none–though we’re working on them!)

(States in purple represent WineAmerica’s membership, and we were delighted to recently turn Alaska purple.)

If you are not already a member of WineAmerica, join now!

Diversity is our Strength. Unity is our Power.

May you have a wonderful holiday season, and sprinkle random acts of kindness on many others.

Cheers!

Jim Trezise

President, WineAmerica

FOR IMMEDIATE RELEASE

WASHINGTON, DC, (July 20, 2017)— WineAmerica, the national organization of American wineries, and its partner the MIC Coalition (Music, Innovators, Consumers) enthusiastically support the bipartisan legislation introduced today by Representatives Jim Sensenbrenner (R-WI) and Suzan DelBene (D-WA) to establish a searchable, digital database of historical and current copyright ownership and licensing information.

The bipartisan Transparency in Music Licensing and Ownership Act is a major step forward in creating a music licensing system that is open and accessible to all stakeholders throughout the music economy – including more than 9,000 wineries located across all fifty states. For the overwhelming majority of wineries – many of which are  family owned businesses that bring much needed economic benefit to their agricultural and rural communities – simplifying the music licensing experience is essential.

The U.S. wine industry is unique in that many of the wineries and vineyards are  all-in-one agriculture, manufacturing, and retail establishments. “Wine is one of agriculture’s greatest value-added products and generates substantial benefits in the form of jobs, tax revenue, and support for local businesses through wine tourism,” says Tara Good, Vice President of WineAmerica. “Music and live music performances play a huge part in promoting wine tourism and creating a memorable and unique experience.”

Currently, the lack of an authoritative public database makes it prohibitive for the majority of small family-owned wineries to understand which music licenses best fit their needs and make the most sense for their business. In some cases, wineries are declining to host live musicians rather than risk potential liability due to lack of up-to-date and actionable licensing information. According to WineAmerica’s 2016 industry survey, 32% of wineries in the U.S. have either canceled or are considering canceling their live music programs.

“I am proud that WineAmerica has been able to work with the diverse stakeholders represented by the MIC Coalition to bring transparency to music licensing,” says Trent Preszler, Chairman of the Board of WineAmerica and CEO of Bedell Cellars in New York. “Transparency is the only way for wineries to make sound business decisions when it comes to music.”

The Transparency in Music Licensing and Ownership Act is a major step forward in creating a music licensing system that is open and accessible to those who both own and license music. WineAmerica congratulates Congressman Sensenbrenner and Congresswoman DelBene for their leadership and supports the creation of a database that provides all stakeholders in the music marketplace with access to authoritative and fully searchable records of music ownership and licensing information, free-of-charge to users and updated in real time.

Want to get involved? Review our one pager Transparency in Music Licensing and Ownership Act: What Is It? or contact Tara Good at tgood@nullwineamerica.org.

About WineAmerica

WineAmerica is the national voice of the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 41 states and leads a coalition of state and regional wine and grape associations. As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy. www.wineamerica.org

           ###

Tara Good, Vice President

202-223-5175

tgood@nullwineamerica.org

7.25.2016

Last Friday, the MIC Coalition, which includes WineAmerica, along with bars, restaurants, and streaming services, sent a letter supporting DOJ’s decision to keep in place the longstanding consent decrees which have governed music licensing by ASCAP and BMI for decades.

View Letter to the Department of Justice

Additionally, MIC applauded DOJ’s clarification that the “blanket licenses” advertised by ASCAP and BMI, and detailed in their license terms and affiliate agreements, grant music users a 100% license to play any song in their repertoire.  DOJ rejected ASCAP and BMI demands for “fractional licensing,” which would virtually gridlock music licensing, hurting music lovers, artists and songwriters alike.

From the letter:

Additional links:

by Tara Good

What does it mean for wineries?

WineAmerica is pleased to learn that the Department of Justice has denied performance licensing organizations (PROs) changes to the consent decree.

Yesterday, the Department of Justice (DoJ) announced that, after two years of reviews, they would not alter the existing consent decree regulating Broadcast Music, Inc. (BMI) and American Society of Composers, Authors and Publishers (ASCAP), as well as other elements of the music industry. The consent decree has regulated BMI and ASCAP since 1941 in response to anti-competitive behavior. Importantly, the DoJ struck down the PROs requests for “fractionalized licensing.”

This is an important decision for wineries who purchase “blanket licenses” from PROs in order to play music at their venue. A blanket license allows a venue to play a PROs entire repertory. Had the DoJ agreed to fractionalized licensing, a winery would have had to pay every PRO that represents a songwriter for a song with multiple writers: for example, if a song has four writers, each with a different PRO, then all four PRO could claim royalties for that single song.

WineAmerica is aware of PROs claims that a winery is required to pay each one. While, according to copyright law, a venue is required to pay to use copyrighted material, WineAmerica is working to bring transparency and market competition to the licensing process. We believe that small business should have the tools to make sound business decisions based on their unique needs. In our lobbying efforts, we argued that fractionalize licensing would have eliminated buyer’s choice in the marketplace, encourage anti-competitive behavior, and ultimately raise the cost of performing music.

Excerpt from WineAmerica’s comments to the DoJ on the consent decree, 11/20/2015:

Requiring the purchase of a license for joint ownership would further the anti-competitive behavior or BMI and ASCAP. It would eliminate buyer’s choice in the marketplace. By requiring multiple licenses for a single musical work, it would raise the cost of performing music. Venues are already canceling live music due to costly licenses. Requiring the purchase of multiple licenses would dramatically raise the number of wineries and vineyards no longer offering live music, hurting business, the music industry, and the consumer.

The consent decree does not regulate Society of European Stage Authors and Composers (SESAC) or Global Music Rights (GMR).

WineAmerica applauds the Department of Justice in its decision, meanwhile we will continue our lobbying efforts to alleviate undue burdens put upon wineries by PROs.

For more information, contact, Tara Good, Vice President at tgood@nullwineamerica.org, 202-223-5175.

Additional links:

Billboard:                     Department Of Justice To Deny Consent Decree Amendment

WineAmerica:              32% Of Wineries Surveyed Cancelled Live Music

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WineAmerica is the national voice the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 43 states and leads a coalition of state and regional wine and grape associations.  As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

3.7.2016

By Tara Good

In November 2015 WineAmerica conducted a national survey of wineries regarding music usage and licensing. The response was overwhelming. The business practices of performance rights organizations (PRO), including BMI, SESAC and ASCAP, have had a severely damaging effect on wineries abilities to host live music.

Songwriters get paid for their work through the three PROs named above. In order for wineries to legally to host performances of copyrighted music they must annually purchase a “blanket license.” A blanket license entitles the venue to host all the music contained in a PROs repertory. The price of the blanket license is dependent on usage.

Respondents strongly voiced their desire to support local artists and the desire of local artists to play at their winery. But, they also described–at times in great detail–the unorthodox business practices on the part of the PROs. They report that these business practices are forcing them to cancel  or severely curtail their live music programs.

Most wineries are located in rural areas where agri-tourism is an important part of the local economy. It is important for the winery to be able to host live music to bring in customers, just as having venue space in rural areas is important to local artists. The respondents to paid over $1.9 million dollars to local musicians last year for live performances alone.

As of January 2015, 96% of U.S. wineries can be classified as small businesses. Therefore, many do not have the necessary legal resources to litigate disputes with PROs. This leaves winery owners vulnerable to harassment. Nearly 85% of respondents described being harassed and legally threatened by PROs demanding license payment.

These practices have had a chilling effect on live music in wineries. 32% of responding wineries  have canceled their live music. An additional 17% are seriously considering canceling live music due to the exorbitant rates and business practices. Canceling these programs sadly will result in lost of revenue for wineries and rural communities, and lost exposure and income for musicians.

***

Questions? Contact Tara Good, Vice President, tgood@nullwineamerica.org

WineAmerica is the national voice of the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 43 states and leads a coalition of state and regional wine and grape associations. As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.