The 2023 General Assembly Session has wrapped up the second week of its “short” 45-day session.

Overall it was a very good week for bills that could impact the Three-Tier system – a key one was defeated and another, to allow for limited distribution by breweries, is moving accordingly. Listed below are highlights of those bills of interest to our industry. Should you want more details, you can go directly to the bill summary, history, and text by clicking the bill number.

Also, if you haven’t already signed up for our annual Legislative Conference and Day-on-the-Hill on Feb. 1 and 2, it’s not too late! You can see the agenda and register at the link.

Now, onto the bills:

Self Distribution

SB1387 (Vogel)

Background: This bill would have allowed Virginia Craft Brewers to self-distribute product up to 5,000 barrels and was not part of any of the discussions over last year regarding self-distribution. VBWA strongly opposed the bill along with the Virginia Craft Brewers Guild, Virginia Wine Wholesalers Association, and Anheuser-Busch.

The Latest: After hearing from local beer distributors and colleagues who had heard from their local beer distributors, Sen. Vogel quickly decided to “strike” her bill, which she did on Friday morning (today) in a Senate committee. The legislation is dead for the Session. Great work by those distributors who contacted their Senators, your voices were heard.

Virginia Beer Distribution Company

SB885 (Favola) and HB2258 (Robinson)

Background: The VBWA has been working with the legislature, Virginia Craft Brewers Guild, Virginia Wine Wholesalers Association, Virginia wineries and the Youngkin Administration on the creation of a Virginia Beer Distribution Company (VBDC), modeled after the existing Virginia Wine Distribution Company (VWDC). The VWDC provides access to retail markets for farm wineries that do not fit with a traditional wine distributor and has been a resounding success in keeping Virginia wineries from seeking self-distribution.

Del. Roxann Robinson’s (R-Chesterfield) bill reflects the compromise negotiated between the VBWA and Guild. The compromise caps the VBDC to 500 barrels per brewery, requires the VBDC to respect existing franchise territories and closes an existing loophole that allows for a brewer’s spouse to hold a wholesale license. Sen. Barbara Favola (D-Arlington) does not think the issue is ready for primetime and has put in legislation that will direct ABC and other stakeholders to continue studying the issue for another year.  The Robinson bill is strongly supported by the Craft Brewers Guild and they are opposing the Favola study.  In addition to the legislation, the Robinson bill will need state funding to go into effect. The Guild is working on two budget amendments (one in the House and one in the Senate) for roughly $750,000 each to finance the creation of the VBDC. It is unclear how those amendments will fare.

The Latest: We expect the Robinson bill to be heard next week, so standby as things develop.

Product Placement

HB1979 (Leftwich) and SB809 (Favola)

Background: In response to several recent examples of underage consumers purchasing an alcoholic product or having an alcoholic product unknowing purchased on their behalf, the VBWA worked with Anheuser-Busch and ABC to draft legislation regulating the placement of “crossover” products.

If enacted, the legislation would require all alcoholic products to be clearly labeled as such in the display and prohibit a crossover product from being placed near its non-alcoholic counterpart to prevent consumer confusion.

The legislation is opposed by the major grocery chains and some C-store groups, but supported by other retail groups and consumer advocates. Sen. Favola’s bill was heard in a committee and after a robust discussion and testimony from several opponents, the bill was reported out of the committee without a negative vote. The legislation now heads to the Senate floor.

The Latest: Sen. Favola’s bill was heard in a committee and after a robust discussion and testimony from several opponents, the bill was reported out of the committee without a negative vote and passed the full Senate 47-1. It now awaits action in the House.

Slotting Fees

HB1971 (Leftwich) and SB1387 (Norment)

Background: Anheuser-Busch is pushing legislation across the country to increase transparency in slotting fees as a result of new entrants into the alcohol space. HB1971 and SB1387 are a direct result of that effort and would give Virginia ABC the authority to access retailers’ records related to slotting fees paid for non-alcoholic products for the purposes of determining if a supplier was using slotting fees paid for their NA products to gain shelf space for their alcoholic products.

The Latest: The legislation has generated broad opposition from retailers, bottlers and soda manufacturers. The VBWA board has reviewed the issue and decided to stay neutral on the matter.  The VBWA will continue to monitor, but does not plan to engage.

Dram Shop

SB1113 (Hanger) and SB1226 (Obenshain)

Several “Dram Shop” bills have been introduced as the result of a recent high-profile underage DUI incident at a craft brewery in the Valley. Sen. Mark Obenshain’s (R-Harrisonburg) bill focuses on selling to minors. Dram Shop is a legal principle that exists in a majority of states across the nation that assigns civil liability to a retailer for actions taken by their patrons. That liability does not extend to the wholesale or manufacturing tier except in instances where they have retail privileges.

The VBWA will be closely tracking these bills; however, the Board decided to remain neutral as long as liability does not extend to the wholesaler. The legacy breweries are taking a similar position. The bills are being strongly opposed by restaurants and craft breweries.

New ABC Licensing Privileges

HB1753 (Robinson) and SB1100 (Boysko)

Background: Capital One and American Express are pushing legislation that would allow them to operate “passenger lounges” within the Commonwealth. The legislation is needed because of the way our airport authorities are set-up in the code.

The VBWA worked with Capital One and American Express before the session and are fine with the legislation. The financial institutions accepted amendments from restaurant groups to narrow the definition since they will be exempt from the food ratio.

The Latest: As a result of working with all the stakeholders, the Senate version passed committee unanimously this morning and passed the Senate 38-0.  It’s now in the House and awaiting action.

Reinstatement of a Suspended Retail Licence

HB1866 (Scott, P.)

Hiring of Felons

HB1730 (Bennett-Parker)

Background: Facing staffing shortages, local restaurants asked Del. Elizabeth Bennett-Parker (D-Alexandria), who represents the vibrant retail district of “Old Town” Alexandria, to carry legislation that would repeal ABC’s long-standing policy that prohibits licensees from hiring convicted felons.

Thinking it was a good idea, Del. Bennett-Parker reached out to the VBWA for our support and we worked with her on the legislation to include wholesalers. If passed, individuals must still disclose they have a past felony conviction; however, if they have been crime-free for two years, a wholesaler or any licensee may choose to hire them without seeking a waiver from ABC.

The Latest: The VBWA attended a meeting with Del. Bennett-Parker and ABC where ABC signed off on the concept and prepared language for the Delegate to incorporate into her bill. The VBWA has reviewed the amendments and is fine with the changes. We’ll be curious to see how the “law-and-order” members of the House Republican Caucus react to the legislation.

Marijuana

There are multiple bills introduced to-date impacting how the Commonwealth will move forward with cannabis sales. The VBWA is monitoring all the bills and will have more to report as things develop.