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.

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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.

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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.

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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.

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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.

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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.

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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.

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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

By Michael Kaiser

The Department of Agriculture (USDA) has finalized the rule repealing country of origin labeling rules (COOL) for certain muscle cuts of meat. The repeal, as authorized by the 2015 Omnibus Appropriations Bill, will allow the the US to avoid costly tariffs places on goods, including wine, exported into Canada and Mexico.

WineAmerica worked tirelessly as a member of the COOL Reform Coalition to make sure the COOL rules were repealed to avoid a complete disruption of the American wine market in Canada. In 2014, U.S wine exports to Canada reached $487 million, a 7% increase from 2013. Retail sales for American wine in Canada now eclipse $1 billion. In 2013 the U.S. was the second largest exporter of wine to Canada, with a 16% market share among wine imports sold in Canada. If the over $1 billion in retaliatory tariffs were implemented by Canada, the costs of US wine exported to Canada would have rose exponentially. If the Canadian market was to shrink, the excess wine would have remained in the United States, causing a glut. This was not something our industry would have been able to tolerate.

The COOL issue is an example of an issue that seemingly has no bearing on wine, but as a value added product, it is an easy target for tariffs and other trade barriers. WineAmerica did not have a position either way on the labeling rules themselves, but in order to protect the interests of American wine in the Canadian market and here in the United States, we had to become a leader in the COOL Reform Coalition. We worked hand in hand with our partners working House and Senate offices to secure repeal. When a witness was needed for a Senate hearing, we provided it (Wine Testifies for the Senate) and without the work of our grassroots network we would have never been able to stop the tariffs from being implemented. Wineries and associations from as far flung as Washington and Virginia played an important role in getting the message out about the dangers of this issue.

This COOL repeal is just one example of what WineAmerica is doing in Washington, DC to protect the business interests of American wineries. We are the only national organization working for the American wine industry in our nation’s capital.

***

Questions? Contact Michael Kaiser, Director of Public Affairs, mkaiser@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.

Washington D.C., WineAmerica supports the completion of the Trans Pacific Partnership (TPP) trade agreement announced by the United States and 11 other Pacific Rim nations. The agreement is expected to eliminate existing high tariffs placed on American wines abroad and establish more enforceable trade rules for wine.

“Asia is an emerging and very important market for U.S.,” said Caroline Shaw, Executive Vice President of Jackson Family Wines and current WineAmerica Board Chair. “New multilateral trade agreements, such as the Trans Pacific Partnership, could allow American wines to compete with other exporting wine producing nations and result in an increasingly competitive international market.”  This situation is good for both the wine producer and the consumer.

The 12 TPP countries have agreed to an agreement in principle, but the final text is not completed, nor has it yet been released to be the public. WineAmerica will evaluate the final text of the agreement when it becomes available. With the passage of Trade Promotion Authority (TPA) earlier this year, which WineAmerica supported, Congress must approve the final agreement before the President can sign it, but may not offer amendments.

The 12 TPP countries are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam. The Office of the United States Trade Representatives has released a public summary of the deal.

Reach out to Michael Kaiser, Director of Public Affairs here at WineAmerica with any questions: mkaiser@nullwineamerica.org.

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.

June 25th, 2015

Washington D.C. — Today the Senate Agriculture Committee held a hearing on the Country of Origin Labeling dispute.  A list of U.S. commodities, including wine, faces over three billion dollars in tariffs from Canada and Mexico. WineAmerica Board Member and New York Wine and Grape Foundation President, Jim Trezise, spoke to the effect that these tariffs would have on the wine industry. Other panelists included representatives from the North American Meat Institute, the American Farm Bureau, Cattlemen’s Association, Kansas Livestock Association, Archer Daniels Midland Company Corn Processing Business Unit. The hearing was lead by Senator Pat Roberts (R-KS), Chairman of the Senate Committee on Agriculture and Ranking Member Senator Debbie Stabenow (D-MI).

Mr. Trezise presented the need for swift legislative action and the need for full repeal of COOL. Canada and Mexico have repeatedly stated that full repeal is the only solution that they will accept. Additionally, Trezise addressed the importance of the Canadian market for New York and other regions. Canada is the largest export market for U.S. wine, and the proposed tariffs will have a devastating impact on the the American wine industry.

WineAmerica thanks the Senate Committee on Agriculture, Nutrition, and Forestry for holding the hearing on COOL and for inviting a member of the wine industry to testify.

Background: Country of Origin Labeling, or “COOL,” is a law requiring retailers to indicate the country of origin on a cut of meat. In 2009 Canada challenged the American implementation of this law at the World Trade Organization (WTO). The WTO ruled in Canada’s favor and has continued to do so in all subsequent appeals. With today’s final ruling, Canada and Mexico will be able to levy tariffs against American products. Wine is on the preliminary “hit list” made public by Canadians.

Tariffs against American wine will be a huge hit to our industry. Canada is the largest foreign market for American wine.  Last year U.S wine exports to Canada reached $487 million, a 7% increase from 2013. Retail sales for American wine in Canada now eclipse $1 billion. In 2013 the U.S. was the second largest exporter of wine to Canada, with a 16% market share among wine imports sold in Canada.

The preliminary Canadian plan would place a tariff on wine based on the value of the product entering the country. For example, a wine with a $10 import value would be hit with a $10 tariff, doubling the cost of the wine sent into the country. Apart from the immediate financial loss, the American wine industry could face long term effects. Raising the price of a bottle of a US wine will hinder competition with other wine regions, notably South Africa and Australia. The United States could lose shelf space that would take years to regain.

Current Action: Earlier this month the House of Representatives passed a bi-partisan bill repealing the COOL requirements. With the August congressional recess looming, and with the WTO review period ending on August 17, the Senate must act quickly. The Canadian and Mexican governments have made it clear that, short of a full repeal of the COOL meat labeling rules, the tariffs will commence. If the COOL rules are not repealed, the tariffs will go into effect as early as September and will last at least two years.

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.

View Chairman Robert’s statement on COOL

Questions? Contact Michael Kaiser at mkaiser@nullwineamerica.org

U.S. agriculture exports have continued to grow exponentially over the last decade. In 2014 American producers exported $152 billion in agriculture commodities. U.S. Wine exports accounted for $1.5 billion in 2014.

“Asia is an emerging and very important market for American wine,” said Caroline Shaw, Executive Vice President of Jackson Family Wines and current WIneAmerica Board Chair. “New free trade agreements, such as the Trans Pacific Partnership, could allow American wines to compete and excel in an increasingly competitive international market”

Trade Promotion Authority will allow the President to pursue objectives specified by Congress and meet consultation guidelines specified by Congress as it negotiates future trade agreements. In return for this, Congress agrees to allow for expedited consideration of trade agreements without amendments.

TPA will allow the President to negotiate trade agreements that meet the needs of the American wine industry and continue to help it expand to new and emerging markets. WineAmerica applauds the Senate for passing this important piece of legislation that will allow U.S. wineries easier access to the international market. We are confident the House of Representatives will follow suit.

Questions? Contact Michael Kaiser at mkaiser@nullwineamerica.org

Washington, D.C. – Rep. Mike Conaway (R-TX), Chairman of the House Agriculture Committee, has introduced bipartisan legislation to repeal Country of Origin Labeling (COOL) for certain cuts of meat to avoid retaliatory tariffs on a variety of U.S. exports to Canada and Mexico. The bill, H.R. 2393, would repeal the country of origin labeling requirements for beef, chicken, and pork. The bipartisan legislation currently has 60 original co-sponsors.

The full House Agriculture Committee will be holding a hearing on H.R. 2393 tomorrow, and a markup is expected to follow. Currently there are no amendments proposed, but that could change in the committee markup. Once reported from committee the bill will head to the House floor, which could happen as soon as early June.

This morning WineAmerica attended a press conference at the Capitol for H.R. 2393.  The press conference was held by the two lead sponsors of the COOL repeal legislation, Chairman Conaway (R-TX) and Congressman Jim Costa (D-CA). They were joined by members of both parties  who expressed their support of the legislation.  Industry representatives spoke in support of the legislation and praised Conaway’s and Costa’s efforts.  Bobby Koch, President of the Wine institute was in attendance, saying that the market for American wine had increased 78 percent into Canada over the last five years,  where total wine sales had increased only 16 percent.  He stressed that all of this is in jeopardy of being lost if the retaliatory tariffs on wine are implemented.  Congressman Costa also stated the importance of wine, stressing that California alone would face a $1 billion retaliation hit this fall if the existing COOL rules are not repealed.

Read More: U.S. Wine Industry Facing Steep Tariffs from Canada

The Senate Agriculture Committee will also be working on a solution to the WTO ruling. Chairman Pat Roberts (R-KS) has stated he is open to any solution, including repeal for meat, to prevent retaliatory tariffs. Ranking Member Debbie Stabenow (D-MI) has come out against repeal. It is unclear when the Senate might take action.

Canada and Mexico have been clear that nothing short of a full repeal of the COOL rules will satisfy their respective governments. Without a full repeal, the World Trade Organization has authorized Canada and Mexico to take punitive action against the United States in the form of retaliatory tariffs.

WineAmerica supports efforts by Congress to address the COOL regulations, including the repeal legislation introduced Representatives Conaway and Costa. WineAmerica’s government affairs team will be advocating for quick action on H.R. 2393. Retaliatory tariffs could be implemented as soon as August, Congress must work quickly to address the issue.

Questions and inquires should be directed to Michael Kaiser, Director of Public Affairs at mkaiser@nullwineameria.org.

Read more about WineAmerica’s policy issues.

May 18th, 2015

Washington, D.C. – Today the World Trade Organization Dispute Settlement Body issued their final ruling against the United States country of origin labeling  (COOL) requirements for muscle cuts of meat. What does that mean for the wine industry? If the United States does not repeal its COOL rule, Canada and Mexico will retaliate with substantive tariffs on a variety of American products which could include wine.

Country of Origin Labeling, or “COOL,” is a law requiring retailers to indicate the country of origin on a cut of meat. In 2009 Canada challenged the American implementation of this law at the World Trade Organization (WTO). The WTO ruled in Canada’s favor and has continued to do so in all subsequent appeals. With today’s final ruling, Canada and Mexico will be able to levy tariffs against American products. Wine is on the preliminary “hit list” made public by Canadians.

Read: Congress Moves to Protect U.S. Wines from Canadian Tariffs

Tariffs against American wine will be a huge hit to our industry. Canada is the largest foreign market for American wine.  Last year U.S wine exports to Canada reached $487 million, a 7% increase from 2013. Retail sales for American wine in Canada now eclipse $1 billion. In 2013 the U.S. was the second largest exporter of wine to Canada, with a 16% market share among wine imports sold in Canada.

The preliminary Canadian plan would place a tariff on wine based on the value of the product entering the country. For example, a wine with a $10 import value would be hit with a $10 tariff, doubling the cost of the wine sent into the country. Apart from the immediate financial loss, the American wine industry could face long term effects. Raising the price of a bottle of a US wine will hinder competition with other wine regions, notably South Africa and Australia. The United States could lose shelf space that would take years to regain.

Tariffs will largely affect California wineries, but smaller, family owned wineries in Oregon, Washington, New York and Michigan will also be impacted. In 2014, Washington wineries exported a total of $7.5 million in total wine sales into Canada. Oregon sent almost 22,000 cases of their wine across the border in 2014.

Canada has sixty days to submit a dollar amount to the WTO for retaliation. Once the WTO approves the amount they begin to implement tariffs on targeted commodities. While we hope wine will be omitted,  WineAmerica’s government affairs team is actively lobbying Congress to support a legislative fix, including but not limited to a repeal of the COOL regulations, before any tariffs on U.S. wine exports can be implemented, which could be as soon as the end of the summer.

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.

For more information about COOL visit www.coolreform.com. View list of American commodities potentially targeted by Canada. Learn more about WineAmerica and wine industry advocacy at www.wineamerica.org.

Questions and inquires should be directed to Michael Kaiser, Director of Public Affairs at mkaiser@nullwineamerica.org

Read more about WineAmerica’s policy issues.

The full text of the statement is below. For more information on the World Wine Trade Group please go here:  http://ita.doc.gov/td/ocg/wwtg.htm and http://www.wwtg-gmcv.org

World Wine Trade Group Tbilisi Statement on Analytical Methodology and Regulatory Limits

(agreed to on Aug. 26, 2014)

World Wine Trade Group (WWTG) governments support the need to establish and enforce regulations both to ensure product safety and to ensure that products meet relevant standards relating to the production, composition, and identity of wine in a manner consistent with the rights and obligations established under the World Trade Organization (WTO) Agreements.

Accordingly, the WWTG endorses the following principles relating to analytical methodology and regulatory limits on constituents and potential contaminants in wine.

• Avoiding unnecessary analyses. Governments should establish regulatory limits that are based on risk, thereby avoiding unnecessary analysis.

• Relevant standards. In addition to considering relevant standards from international standards setting bodies, in the context of a country’s WTO obligations, governments should also consider work done by WWTG participants when establishing new regulatory limits.

• Regulatory cooperation. Governments should seek cooperation in approaches to regulatory limits where it is feasible to do so and where there is no scientific or other legitimate justification for national or regional differences. Cooperation may be achieved by various means, including but not limited to the adoption of precisely the same provisions, mutual acceptance of provisions, or establishment of appropriate tolerances.

• Common systems of units. Governments should, where feasible and appropriate, adopt a common system of scientific units for expressing regulatory limits relating to wine.

• Expression of regulatory limits. Governments should express regulatory limits relating to wine on a “per unit volume of wine” basis rather than a “per unit volume of alcohol” basis.

• Harmonization of results expressions. Governments should adopt a common way of expressing analytical results in their rules, regulations, and requirements, where this is done in relation to a single wine constituent, e.g., for total acidity.

• Analytical levels. When governments implement limits for analytical levels in relation to wine, they should specify the method by which compliance with those limits is confirmed, and should make those limits and methods publicly available.

• Accreditation. Governments should ensure that the analyses of wine that they require to demonstrate compliance with regulatory limits are undertaken by accredited laboratories complying with international standards (or overseen by certified analysts).

• Validation of analytical methods. Governments should ensure that, for wine compliance purposes, laboratories use analytical methods that are validated for wine analyses, and that the laboratories are proficient in the use of those methods.

• Authentic samples. Where wine authentication is deemed essential to prevent counterfeit or misleading practices, governments should compare test samples against a sufficiently comprehensive database of authentic samples to avoid miscategorizing legitimate samples as fraudulent.

• Measurement uncertainty. Governments should ensure that laboratories provide information on measurement uncertainty regarding their analytical results. Governments should take into account such measurement uncertainty information when interpreting analytical results.

Are you a WineAmerica member? Email us your questions! mkaiser@nullwineamerica.org

Join Today!

WineAmerica membership offers you direct access to policy makers here in Washington D.C. and a shared grassroots platform with wine industry peers across the country. No matter how many acres of grapes you grow or cases of wine you make, all American wineries share common concerns. As the only national grassroots voice in Washington, D.C. WineAmerica is constantly working to protect and promote the prosperity of America’s diverse wine industry.