This is the last full week of session, so it’s pretty intense at the state Capitol. Budget negotiators have been appointed and have started the process of negotiating a state budget, and the Governor’s proposed tax cuts are a key sticking point. Most committees met for a final time last week, so this week is focused on working out conference reports for bills where there wasn’t agreement, budget negotiations, and electing judges.
As to the bills:
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: Since the proposed Senate budget does not include funding for the VBDC, the Senate added an amendment to the bill saying it only goes into effect if funded. As a matter of policy, the House rejects these types of amendments, so the bill has been put into “conference” where the hope is that key legislators can work out a compromise. Expecting some deal to be reached, Sen. Favola “struck” her study to keep things clean. More to come here.
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: Both bills have passed the House and Senate and are awaiting action by the Governor.
Transfer of Ownership by Soft Drink Companies & Bottlers
HB2486 (Kilgore): Del. Kilgore introduced legislation extending protections to bottlers similar to those afforded beer distributors that limit a manufacturer’s ability to deny the sale and/or transfer of a business. The VBWA has been asked to weigh in since beer distributors have similar protections and many of you carry N/As. There are some concerns with how the bill is drafted and how broadly it would apply to N/As. The Virginia Beverage Association is staying neutral on the bill. After careful consideration, the VBWA Board of Directors has directed staff to communicate that we welcome the broader conversation about extending protections afforded to beer distributors, wine distributors and auto dealers to soda and other N/A products; however, we are not prepared to weigh in on the specific legislation at this time.
The Latest: Despite opposition from big Coke and Pepsi, Del. Kilgore was able to muscle his bill out of the House on a 76-23 vote. The bill will get a full hearing in Senate Commerce and Labor on Monday. Big Coke, Big Pepsi Dr. Pepper have “lobbied up”, hiring new contract teams over the past two weeks in a desperate ditch effort to kill the bill. This will certainly be one to watch in the days ahead.
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: An amended version of the bill was reported out of Senate Rehabilitation and Social Services Committee, 22-0. It now goes to the floor, then back to the House for approval.
