Wine & Spirit Suppliers to Arkansas Must Register Products by End of Year

With passage of HB 1480 (now titled “Act 1105“), the state of Arkansas is requiring that all wine and spirits suppliers actively distributing wine and spirits into the state must register each distributed product with the state. Wine & spirits products (beer is not required) currently in distribution must be registered by December 31 and all registration takes place on-line.

The state fee for on-line product registration is $20/label. Suppliers can no longer send the “Manufacturer’s Request for Brand Registration or Change of Wholesaler” form in a paper format. This is now done on-line.

How to Register Your Currently Distributed Products:

  1. Visit Arkansas’ Electronic Registrations Website
  2. Have a list of your actively distributed COLA numbers, names of your Arkansas distributors, and any brand owner authorization letters if the registrant is not the owner of the brand being registered with the state
  3. Payment is via credit card

Through December 31, 2013, suppliers may download an excel spreadsheet of their COLAs by Federal Basic Permit Number. Labels will initially be approved directly upon completion of workflow process. The state will review incoming registration to ensure non-violation of sole source requirements and other rules and regulations.

IMPORTANT:
-All currently active products must be registered by December 31
-Product registrations are valid through June 30, 2014
-Label Registration status can be verified by COLA Number
-Newly distributed products may be registered beginning January 1, 2014

Feel free to ask any questions you may have about Arkansas product registration on this blog post and we will answer them as quickly as possible.

TTB Halts Regulatory Functions

As a result of the government shutdown, TTB has halted regulatory functions. Licensees will not be able to access COLAs Online, Permits Online, or Formulas Online. This also means that ShipCompliant’s integration with COLAs Online will not be available during the shutdown. As soon as appropriations are made available, TTB will work on restoring these functions and we will enable the integration shortly thereafter. Please see the notice that TTB posted on their website below.

APPROPRIATIONS LAPSE NOTICE
CESSATION OF TTB OPERATIONS
WITH LIMITED ACCESS TO WWW.TTB.GOV

Due to the lapse in government funding, only web sites supporting excepted functions will be updated unless otherwise funded. Our TTB web site, www.ttb.gov, will be available during this shutdown period and you will continue to be able to file electronic payments and returns for federal excise taxes and operational reports through https://www.pay.gov/paygov/.

However, there will be no access to TTB’s eGovernment applications including, but not limited to, Permits Online, Formulas Online, and COLAs online. Other information on the web site may not be up to date, and TTB will not be able to respond to questions or comments submitted via the web site until appropriations are enacted.

TTB will suspend all non-excepted TTB operations, and no personnel will be available to respond to any inquiries, including emails, telephone calls, facsimiles, or other communications. The web site and operations will fully resume when appropriations are reenacted. TTB has directed employees NOT to report to work and they are prohibited by federal law from volunteering their services during a lapse in appropriations.

Once funding has been restored, and the government shutdown is over, we will work to restore regular service as soon as possible.

The COLA Conundrum

On the issue of Certificates of Label Approval (COLAs), the Alcohol and Tobacco Tax and Trade Bureau (TTB) is finding itself caught between a rock and a hard place. The rock is their funding, including dwindling budgets each year, and concerns over furloughs, government shutdowns, and long term sequestration given an inept and unpredictable Congress. The hard place is an industry that is pumping more and more products into the marketplace and a need to get products to market quickly because of a dizzying pace of innovation.

The result of this squeeze is longer approval times for new COLA applications. Even though TTB has made great strides and a substantial number of changes to streamline the COLA filing process, current COLA processing times are 38 days for distilled spirits labels, 12 days for malt beverage labels, and 25 days for wine labels.

TTB has also signaled that they would like to make even more changes to the COLA process. As we discussed on a panel at the National Conference of State Liquor Administrators (NCSLA) Annual Conference this summer in Hawaii, TTB would like to continue to explore substantial ways to overhaul the label pre-approval process, including potentially moving to a “deemed-approved” process with automated decisions for certain eligible labels and a shift to marketplace enforcement. These potential changes could have a big impact on the 30+ states that have label approval laws as well as suppliers, wholesalers, retailers, and vendors. Many states would need to revise their statutes, change their regulations, and/or revisit their policies and processes if the changes move forward.

We’re going to hold a follow-up “part 2″ to the COLA panel at the NCSLA Regional Conference in Atlantic City on October 12th. I’ll also touch on these issues during the regulatory roundup section at our annual Direct Sales Virtual Seminar on October 17th.

We want to hear from you! If you have any feedback, comments, or questions, please email them to COLApanel@shipcompliant.com . If you are a state administrator, and you haven’t yet completed our label registration survey, please do so in advance of the panel on October 12th by clicking here. Our goal is to have an open, collaborative discussion on this important topic and would love to have as much input as possible.

2013 Wine Compliance Legislative Updates and a Virtual Seminar Invitation

You may remember reading our posts highlighting what to look for in the legislative season back at the beginning of 2013. Now that many legislative sessions are starting to come to a close, here is a quick check-in on this year’s legislative changes, all of which will be addressed in detail at the ShipCompliant Direct Wine Sales Virtual Seminar, scheduled for October 17th. Reserve your spot today for a complete update on the 2013 wine direct shipping world.

How did the Direct Shipping Bills Stack Up?

Pennsylvania and Massachusetts were the headlining states this year once again when it comes to opening up new states to direct shipping. Although neither state passed a bill prior to the summer recess, legislatures are back in session in both states and direct shipping remains a possibility.

Montana HB 402 will become law tomorrow (Tuesday October 1, 2013), effectively replacing the wine connoisseur’s license with a direct shipping “endorsement” available to Montana wineries and to out-of-state wineries holding a Foreign Winery License. Check out our previous blog post for more detailed information on obtaining this endorsement.

Arkansas Act 483, originally HB 1749, opened up limited direct shipping to the “Natural State” for wineries. The state is still finalizing how they will regulate this new law, which took effect mid-August, but this previous post provides a detailed summary of the Act.

Streamlined COLA Processing

The TTB continues to revamp their website and accept feedback from the industry. Review the status of the COLA Streamlining Accomplishments and Long-term Initiatives on the TTB website.

Existing Direct Shipping Laws, Reworked

Nebraska LB 230 passed and became effective on September 6, 2013. We highlighted the details on the bill that adds new restrictions to the wine direct shipping process.

North Dakota SB 2147 created two new licenses that will allow for wine direct shippers to utilize licensed common carriers and fulfillment houses. This bill took effect August 1, 2013.

Product Registration Updates

In Arkansas, HB 1480 became effective mid-August, and beginning October 15 suppliers will be able to register their products online under the new requirements outlined in this bill.

Reserve your spot today for a complete legislative update and more during the ShipCompliant Direct Wine Sales Virtual Seminar!

Is this the year for wine shipments in Pennsylvania?

Pennsylvania, along with Massachusetts, remains one of the two remaining key states that wineries and consumers both hope to see open for direct wine shipping. The possibility that this could be the year for direct shipping coming to the Keystone State remains quite real, depending on what happens when lawmakers return to the capital in the fall to consider a number of wine bills still on the table.

In June, House Bill 121 sponsored by Representative Curt Sonney passed the House and was delivered to the Senate for consideration. This is the second year that a shipping bill successfully moved through one half of the Pennsylvania General Assembly. Last year a bill passed through the Senate, but was held up in the House where the issue of direct wine shipments became conflated with the effort to privatize the state’s liquor distribution system.

Despite the fact that both a House and Senate version of privatization included direct shipping provisions, it is expected that HB 121, or another separate bill, such as Senate Bill 101, will be considered independently of privatization in the fall. However, HB 121 does have some problematic provision. For instance, as currently written HB 121 would require direct shippers to impose both a 6% sales tax on all wines as well as the state’s “Johnstown Flood” tax of 18% on top of the retail price of the wine. Such a tax burden could make the direct shipment channel prohibitive for many consumers. Senate Bill 101 compromises on this issue and creates a more palatable 12% “direct wine shipment tax” instead of the full 18% Johnstown Flood tax.

Still, optimism is currently running high that some form of direct shipment will be enacted this years as indicated by a recent article in the Pittsburgh Post Gazette that support for direct shipping has bi-partisan support. The Post-Gazette article also reported that direct wine shipments have the support of the Pennsylvania Liquor Control Board (PLCB) as well as the influential United Food and Commercial Workers Local 1776, the union representing state liquor store employees.

It appears then that despite the ongoing struggle and battles over privatization, 2013 may very well be the year for wine shipments to Pennsylvania. We’ll monitor developments in Pennsylvania and report any significant movement on the various direct shipping bills as they occur.

UPS and FedEx Approved as Direct-to-Consumer Alcohol Carriers in North Dakota

Following North Dakota’s implementation of SB 2147 last week, which is explained in detail here, North Dakota announced that alcohol carriers FedEx and UPS have submitted applications and are now approved for shipping direct-to-consumer orders into North Dakota through the end of the year. SB 2147 updated the existing direct shipping law with the requirement that alcohol carrier and fulfillment logistics companies get “Alcohol Carrier” and “Logistics Shipper” licenses, respectively, in order for wine direct shippers to use their services for shipments to North Dakota consumers. FedEx and UPS therefore may now be used for wine direct shipping by North Dakota licensees who ship from their licensed premesis.

Wineries and Retailers licensed to sell and ship to North Dakota consumers should remember, however, that until logistics shippers (aka fulfillment warehouses) are licensed under SB 2147 requirements, only in-house fulfilled orders can be shipped. North Dakota periodically publishes a list of licensed entities on their website located here under the link title “List of Alcohol Licenses”.

Update 10/15/2013:
FedEx will halt shipments effective November 1st, 2013. Please see this post for more information.