Legislative Updates Impacting the Spirits Industry
Recent legislative changes in Nebraska and Pennsylvania have brought significant developments to the spirits industry. These changes are set to impact businesses, consumers, and the market landscape. Here’s a closer look at what’s happening and what it means for the industry.
Nebraska Governor Jim Pillen has proposed a property tax plan that includes a substantial increase in the excise tax rate for distilled spirits. The plan suggests raising the tax by 287%, from $3.75 per gallon to $14.50 per gallon. This change would make Nebraska the state with the second-highest tax rate for spirits among licensed states.
The Distilled Spirits Council of the United States (DISCUS) has expressed strong opposition to this proposal. Their analysis indicates that this tax increase could lead to the loss of approximately 1,350 jobs in Nebraska due to a projected $110 million decline in retail alcohol sales. Adam Smith, Vice President of State Government Relations at DISCUS, highlighted the potential negative impact, especially as the industry is still recovering from the pandemic. He emphasized that the increase is misguided and would harm both consumers and businesses. Currently, more than 44% of the retail cost of distilled spirits in Nebraska already goes toward taxes and fees. An increase of this magnitude could deter purchases and negatively affect local farmers, manufacturers, and hospitality businesses connected to the spirits industry.
In Pennsylvania, a new law signed by Governor Josh Shapiro is set to transform the market for spirits ready-to-drink cocktails (RTDs). Senate Bill 688, effective September 15, allows low alcohol-by-volume (ABV) spirits RTDs to be sold in retail outlets that already sell beer and wine products. This legislative change is a significant win for both consumers and the spirits industry. Andy Deloney, Senior Vice President of State Government Relations at DISCUS, praised the bill for its consumer-centric approach. He noted that Pennsylvania consumers can now purchase spirits RTDs alongside beer and wine in grocery and convenience stores, highlighting that there is no difference in alcohol content between spirits RTDs and beer or wine seltzers.
The new law will open up more than 10,000 additional retail outlets for spirits RTDs, including r-license and hotel-license holders. This expansion is expected to boost market growth significantly and provide consumers with greater convenience and choice.
These legislative updates highlight the dynamic nature of the spirits industry and the varied approaches states are taking in regulation and taxation. In Nebraska, the proposed tax increase poses a significant challenge, potentially stifling growth and economic contribution from the spirits sector. In contrast, Pennsylvania’s new law represents a progressive step towards modernization and consumer convenience.
For businesses in the spirits industry, staying informed about such legislative changes is crucial. Adapting to new regulations and understanding their implications can help in strategic planning and maintaining a competitive edge. Whether it’s advocating against unfavorable policies or capitalizing on new opportunities, proactive engagement with state legislation can make a significant difference.
As the industry navigates these changes, the importance of advocacy and informed decision-making cannot be overstated. By working together, industry stakeholders can help shape a regulatory environment that supports growth, innovation, and consumer satisfaction.
For more details on these legislative changes and to stay updated on industry news, visit the Distilled Spirits Council of the United States website. Your involvement and awareness can contribute to a thriving and resilient spirits industry.
Sources:
Comments