The 2023 General Assembly Session gaveled in this week on Wednesday, January 11, for a “short” 46 day session.
- The Session began with the seating of three new legislators, fresh off of their special election victories held the previous day. In the Senate, Virginia Beach Sen. Aaron Rouse (D) increased the Democrat’s control of the body to a 22-18 margin as he flipped the seat vacated by Congresswoman Jen Kiggans (R).
- In the House of Delegates, Del. Ellen Campbell (R) was comfortably elected to the seat previously held by her husband Del. Ronnie Campbell, who passed last month after a battle with cancer. The final vacancy was filled by Del. Holly Seibold (D-Fairfax), who easily won the seat of former Del. Mark Keam (D), vacant due to his appointment in the Biden Administration. Republican control in the House of Delegates remains 52-48.
All 100 Delegates and all 40 Senators will be on the ballot in November in newly drawn districts, so we can expect lots of “brochure” bills to be introduced this Session (a.k.a. bills that do not have a chance of passing, but will be a key partisan focus on future campaign ads).
As always during the Session, we are meeting weekly with the VBWA Board of Directors to review bills and receive advice on strategy to determine VBWA’s adopted positions.
Legislation can be introduced until next Friday, so we’ll have more bills to report in the week ahead; until then, listed below are highlights of those of interest introduced to date. Should you want more details, you can go directly to the bill summary, bill history and bill text by clicking the bill number.
Also, if you haven’t already signed up for our annual Legislative Conference and Day-on-the-Hill it’s not too late! You can see the agenda and register at the link.
Now, onto the bills:
Self Distribution
SB1387 (Vogel): Widely expected to not seek re-election, Sen. Jill Vogel (R-Winchester) decided to kick beer distributors on her way out the door by introducing legislation to allow Virginia Craft Brewers to self-distribute product up to 5,000 barrels.
We’ve yet to confirm the genesis of the bill from the patron, however, have heard from trusted sources it’s for a disgruntled brewery in her district. We have no indication that there will be a House version of the bill, but we won’t know for sure until this week. The VBWA strongly opposes the bill and has been working with other industry groups to rally support for our position. So far the Virginia Craft Brewers Guild, Virginia Wine Wholesalers Association, and Anheuser-Busch all publicly oppose the bill.
We’ll do a “Call-to-Action” for distributors in the days ahead, so stay tuned as we will be asking you to contact your legislators about this misguided legislation. We feel good about our chances, but we are not taking anything for granted.
Virginia Beer Distribution Company
SB885 (Favola) and HB2258 (Robinson): 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.
We expect Sen. Bryce Reeves (R-Fredericksburg) to introduce a Senate version of the Robinson bill next week. We are hearing that wineries are asking for amendments to the bill, so are awaiting them for review.
We will be coordinating with the VWWA on any winery amendments. 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. The VBWA is neutral to all the bills as introduced, but still intimately involved in the discussions. 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. Standby as things develop.
Product Placement
HB1979 (Leftwich) and SB809 (Favola): 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.
Slotting Fees
HB1971 (Leftwich) and SB1387 (Norment): 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 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. We’ll let you know as things evolve.
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): 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.
As a result of working with all the stakeholders, the Senate version passed unanimously and now heads to the floor for a vote on final passage.
Hiring of Felons
HB1730 (Bennett-Parker): 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 VBWA attended a meeting with Del. Bennett-Parker and ABC where ABC signed off on the concept and is working with the Delegate to refine the language. More to come as the issue develops.
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 next week as things develop.
Below, you can also listen to a podcast that offers a high-level overview with VBWA’s Phil Boykin on some these issues.
