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Don’t wait! Kansas Product Renewals are Live

It’s that time of year again; the Kansas label renewal period is upon us. Kansas has pushed the renewal period back by a month this year so licensees will be able to renew previously approved labels from June 1st through July 31st.  But, that doesn’t mean that you should procrastinate! Just like last year, Kansas will be utilizing the PRO system to offer a quick and easy substitute to laborious paper submissions. Licensees will be able to submit electronically with three simple steps; check which products they would like to renew, review the selection, and make a payment. It should take only a few minutes to complete. That will be one more item checked off your to-do list.

Don’t Delay – Renew your Arkansas Products by June 30th

Arkansas, the latest state to adopt wholesale label registration practices, has begun their first renewal period. The state recently sent out an email communication to all licensees with previously registered labels. Just in case you missed the email, here’s what you need to know:

  • The renewal period will run from June 1st through June 30th, and requires that all wine and spirit labels registered prior to March 1st be renewed. Labels registered after March 1st will be valid through the end of next year’s renewal period (through June 30th, 2015).
  • Renewals should take only a few minutes. The renewal fee is $20 per label.
  • Renewals must be performed electronically and can be completed in bulk here: ar.productregistrationonline.com/renewalslogin.
  • New labels (not renewals) in Arkansas can also be performed with a ShipCompliant login. If you don’t have a ShipCompliant login, set up an account with ProductRegistrationOnline here: productregistrationonline.com
  • Arkansas Supplier Permits must be renewed prior to June 30, 2014. If you currently hold a Supplier Permit, you should have received a renewal notice.

Big Changes in Arkansas for Wine and Spirits Brand Registrations

Big changes regarding alcohol regulations continue to unfold for Arkansas this year with the passage of HB 1480, now Act 1105 (signed into law shortly Arkansas’ recent direct shipping bill). Act 1105 effectively changes the current wine and spirits brand registration process. Below is a table comparing the current requirements with the new requirements outlined in the Act, which will go into effect mid-August.

Of the changes outlined above, the biggest to note is the new fee requirement of $15 per “brand label” and “brand label size” and the implementation of annual renewals. The Act defines a “brand label” as “…the label carrying the distinctive design of a brand name of a spirituous liquor or vinous liquor”. In the past, Arkansas has not required additional sizes to be separately registered, nor did they explicitly require notification of new brand label extensions.

Also noteworthy is a new license requirement for wine and spirits suppliers. The $50 license will allow producers and importers to continue to sell to Arkansas wholesalers. Those already licensed as an “Arkansas Small Farm Winery” (needed to sell wine directly to Arkansas retailers) do not need to obtain additional licenses to sell to Arkansas distributors; their existing license will suffice.

Updated procedures are not public yet, however as time draws near the effective date, Arkansas will surely release information on their implementation process. Keep an eye on the ShipCompliant blog for updates.

NCSLA 2013 Conference Presents “COLA Changes on the Horizon”

CONTACT: Pamela Frantz, Executive Director

The National Conference of State Liquor Administrators, Incorporated (NCSLA) will assemble June 24-28th on the island of Oahu at the Sheraton Waikiki Resort in Honolulu, Hawaii for its 2013 annual meeting and conference. Serving as conference host is the Honolulu Liquor Commission.

The annual conference theme is “Evolve, Adapt, Endure.” Our business agenda will cover a number of diverse issues that demonstrate the need, application and importance of this philosophy.

What does the future hold for the ubiquitous Certificate of Label Approval—the “COLA”—that single piece of paper upon which every alcohol beverage sold in America depends for its legitimacy and that state liquor authorities also use for their regulation of alcohol sales and distribution? A panel of distinguished regulatory and industry professionals will explore the answers to that very question on Wednesday morning, June 26th, at the NCSLA 2013 conference.

This important panel was created in response to the TTB’s current, ongoing and substantial overhaul of the label pre-approval process. Because suppliers, wholesalers, marketers, vendors, state agencies, and others depend on the COLA for different purposes, any changes being made by TTB to this critical tool will have a substantial impact on how the alcohol beverage industry brings products to markets and regulates those products.

Attendees of “COLA Changes on the Horizon” will be brought up-to-date on the pace of change to the COLA process, hear informed discussions of the implications of potential changes in the COLA process and have the opportunity to join the discussion and ask questions of the panelists.

Serving as moderator is Jeff Carroll, Vice President, ShipCompliant. His panelists include: Susan Evans, Executive Liaison for Industry Matters, Alcohol and Tobacco Tax and Trade Bureau; Deborah Ringo, Senior Regulatory Manager, Diageo North America; and Debbi Beavers, Licensing Supervisor, Kansas Alcoholic Beverage Control Division.

The panelists, in collaboration with NCSLA, will be conducting research and collecting feedback on this important topic in advance of the conference. Feedback is welcome and can be sent to COLApanel@shipcompliant.com.

Start making your plans NOW to come to Honolulu, Hawaii from June 24-28, 2013 for this year’s annual meeting of the NCSLA! Registration is open now so visit www.ncsla.org for details and register early to take advantage of the lowest rates! Watch for more exciting updates on the NCSLA 2013 Annual Conference to be broadcast in the coming weeks.

About National Conference of State Liquor Administrators, Incorporated:

A national organization of state alcohol beverage regulators, founded June 19, 1934, in Chicago, Illinois, whose purposes are to promote the enactment of the most effective and equitable types of state alcoholic beverage control laws; devise and promote the use of methods which provide the best enforcement of the particular alcoholic beverage control laws in each state; work for the adoption of uniform laws insofar they may be practicable; promote harmony with the federal government in its administration of the Federal Alcohol Administration Act; and strive for harmony in the administration of the alcoholic beverage control laws among the several states. Visit www.ncsla.org for more information.

Virginia and Third Parties – What You Need To Know Before November 4

In July of 2009, the Virginia Department of Alcohol Beverage Control (Virginia ABC) sent out Circular Letter 09-05 to Direct-to-Consumer Wine Shipper and Beer Shipper licensees, prohibiting Direct Shippers from contracting with third parties for receiving or shipping orders on behalf of the licensee. Since then, Virginia has been working with industry members to outline laws and regulations concerning the use of these third parties. The culmination of these efforts is a new Virginia regulation, which will go into effect this Sunday, November 4.

Initially these regulations were submitted in May of 2011 in support of a “fix-it” bill passed in April of 2010. The “fix it” bill – now current law – allows Direct Shippers to ship through approved Fulfillment Warehouses and Marketing Portals. These new regulations define how out-of-state Fulfillment Warehouses and Marketing Portals can become approved by Virginia ABC to do business with Virginia Direct Shipper licensees.

What’s Changing for Direct Shippers Using Fulfillment Warehouses
From 2010 until now, the Virginia ABC has allowed Direct Shippers to apply for more than one direct shipping license and submit separate monthly shipment reports for each shipping location as a temporary workaround. This workaround will remain in place after November 4, but only until the existing extra licenses expire (one year from the date of issue) giving Direct Shippers and Fulfillment Warehouses time to become approved as defined in the new regulations. All wineries must continue to maintain their primary Virginia Direct Shipper license, but no new licenses for additional fulfillment locations are expected to be approved. In order to gain Virginia ABC approval, Fulfillment Warehouses will need to:

  • Submit a copy of the Fulfillment Warehouse’s home-state fulfillment services license to the Virginia ABC
  • Submit a written contract or addendum to an existing contract, between the Fulfillment Warehouse and the licensed Direct Shipper, listing all shipping locations and indicating that the Fulfillment Warehouse is the agent of the Direct Shipper for purposes of complying with the Virginia direct wine shipper’s law under Va. Code §§4.1-209 and §§4.l-209.1, and Va. Administrative Regulation 3VAC5-70-240
  • Maintain for two years and make available to Virginia ABC upon request, records of each shipment, including: quantity and volume, brands shipped, and names and addresses of recipients

Fulfillment Warehouses must submit these documents for EACH Direct Shipper they represent. A sample addendum to be endorsed by the Virginia ABC is currently being drafted and will allow any existing contract between the two parties to merely be referenced, saving time and protecting proprietary information in existing agreements.

What’s Changing for Direct Shippers Using Marketing Portals
Virginia is one of the first states to restrict use of Third Party Marketers by out-of-state Direct Shippers. Beginning November 4, Third Party Marketers must follow these guidelines to become approved in the state:

  • The Marketing Portal must be properly organized as an “agricultural cooperative” in its home-state and provide a copy of its license to the Virginia ABC
  • Establish and submit to the state a written contract between the Marketing Portal and the Direct Shipper

The most commonly thought of Third Party Marketers (aka Third Party Providers, TPPs, flash sites, email marketers) may find it impossible to satisfy the new requirements as most are not licensed as “agricultural cooperatives”. Beginning November 4, Direct Shippers will no longer be able to accept Virginia orders made through a Third Party Marketer that is not an “agricultural cooperative”.

Three years after the release of Virginia Circular Letter 09-05, final regulation of third party services will be enacted on November 4. Industry members that are affected by these changes should continue to stay informed and be prepared to adapt how they do business with Virginia. Please comment with questions or contact Terri Cofer Beirne, Eastern Counsel, Wine Institute at tbeirne@wineinstitute.org.

A New COLA Form for Faster Reviews

In 2011, over 146,000 alcoholic beverage label applications were submitted to the Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau (TTB), an almost 10% increase from the prior year. Yet, while the amount of label applications goes up, the resources available to the TTB for processing these applications goes down due to budget cuts. The need to get a product to market as fast as possible comes in conflict with the importance of keeping alcohol beverage products in compliance with federal labeling regulations. As more applications are submitted, the risk for a crippling review process increases. Currently, spirits and wine applicants must wait 28 to 30 days respectively on a pending label application, a particularly aggravating ordeal for applicants wishing to make minor changes to an existing label.

For example, did your marketing department want to add an award to that COLA you just got approved last week? Is the logo of your winery just a tad too far to the left? Did your 2012 Chardonnay increase in alcohol content from 13.5% ABV to 15% ABV? Is the idea of waiting a month to get a new COLA for any of these scenarios leaving you feeling queasy, too? Well, never fear, the TTB doesn’t like the idea of waiting for a new COLA in these situations either. On July 5, 2012, the TTB unveiled the latest Application for Certification/Exemption of Label/Bottle Approval, Form 5100.31. With a longer list of allowable revisions, the TTB anticipates a decrease in the amount of submitted label applications. With a decrease in the amount of submitted label applications, labels for new products and products with major changes can be reviewed faster. At least, that’s the idea behind the effort put into revising the application.

A key component to the success of these changes depends largely on industry members utilizing their new found label freedoms. Because the entire application process requires no fees, there is a potential risk that many applicants won’t take the time to educate themselves on these new allowable revisions, and instead continue to flood the pool of submitted COLA applications with unnecessary requests for additional COLA approvals. In order for this process to work efficiently, industry members need to understand these updates. Two resources from the TTB are, “Allowable Changes to Approved Labels”, which displays examples of allowable revisions and, “TTB Public Guidance 2012-2”, which simplifies the language of the “Allowable Revisions to Approved Labels” table. By utilizing this new form to its utmost potential, along with many other proposed changes outlined on the TTB page devoted to COLA streamlining efforts, the industry may see a faster and easier application process in the near future.

Here is a quick comparison of the new and old table of Allowable Revisions, with updates highlighted in red:

Table detailing cola revisions

What are your thoughts on the new form 5100.31?