Beverage Licensee Issues You Need to Know
Independent beverage licensees help form the most diverse and innovative beverage alcohol marketplace in the world. They offer thousands of products in tens of thousands of locations. The sheer volume of what is sold is staggering. As just one example, beverage licensees sell 68 billion 12-ounce servings of beer per year. That’s just one example – it doesn’t even take into account the volume of spirits and wine sold. Furthermore, beverage licensees employ hundreds of thousands of full-time and part-time workers, offering many people their first-ever jobs. They also hire a mostly local workforce. The best estimate is that establishments that sell alcohol have a direct impact of about 1.5 million jobs in the United States. However, as explained by John Bodnovich, executive director of the American Beverage Licensees, our industry faces multiple threats every year.
Contrary to many of the beliefs and much of the misinformation perpetuated by those who pose external threats to the alcohol business, independent licensees understand the market and industry products. They fully understand the responsibility that comes with their license; if they lose their license, they lose their business. Beverage licensees know that about two-thirds of US adults enjoy beverage alcohol products and yet plenty of propaganda and legislation is out there, threatening the industry.
Regardless of the fact that a large percentage of off- and on-premise businesses are family owned, small and local, those who are threatening our industry refer to them as Big Alcohol. Interestingly enough, some of those legislators, members of the media and members of the public who support legislation that would hurt beverage licensees are also our customers. We need to remind these people that A) we’re responsible people, and B) we have a positive impact on our communities.
A lot of the threats to licensees come from legislation, unfunded mandates and alcohol excise taxes. In May of 2013, the National Transportation Safety Board (NTSB) called for states to lower acceptable the blood alcohol content limit from 0.08% to 0.05%. Lowering the BAC limit, however, does not address the problem. In fact, MADD, the Governors Highway Safety Association (GHSA), National Highway Traffic Safety Administration (NHTSA) and many media outlets were not supportive of the NTSB’s proposed 0.05% BAC limit. Additionally, the public in general does not support it. The fact is that 70% of drunk driving fatalities occur at a BAC of 0.15% and greater. To combat this recommendation, licensees should cultivate third-party support, be reasonable and point out that nobody supports drunk driving, and focus on high BAC and repeat drunk drivers, not a lower limit.
Alcohol excise taxes remain a serious threat to off- and on-premise beverage licensees. Federal excise taxes (FET) are regressive and insidious as they truly hurt middle- and low-income people. A growing threat, though, are municipal excise taxes. More and more municipalities are seeking out control and the ability to enforce this type of taxation. In order to fight FET and municipal excise taxes, licensees should work with their distributors, wholesalers and supplier partners to address this issue.
Something a large number of beverage licensees probably haven’t considered is Swipe Fee Reform. If you’re not aware of this reform, licensees came together in 2010 to lower interchange fees for processing credit and debit cards. They successfully got the fee lowered from $0.41 to $0.22, with a variation included for fraud. In an effort to keep fighting the good fight, lawsuits have already been filed to lower the fee even further. This is a bottom line issue that can save licensees a lot of money.
The key to protecting our industry is to remind everyone that we operate in a well-regulated alcohol marketplace. In this marketplace we embrace new technologies and trends but know and abide by the law. We also solve problems in the marketplace before making them a policy issue. Licensees should actively promote the hospitality industry as a jobs and revenue creator that strives to meet the needs of guests but never at the expense of responsibility or public safety. To make a difference, talk to legislators, regulators and decision makers. Attend meetings in your district and remember that the vast majority of legislators, regulators and decision makers are your customers – invite them to your establishment. When they visit your business, remember to tell them a personal story, explain your rationale behind your opposition to the threats to our industry and remind them that your decisions impact the community in a positive way. Also, embrace and promote responsibility and stay current on what’s going on in the industry. Meet with peers, join organizations, interact on social media, attend trade shows and read the trades.
To learn more about the issues and threats faced by beverage licensees, attend the 2016 Nightclub & Bar Convention and Trade Show.