AAIAC

The Alliance of Alcohol Industry Attorneys & Consultants is a select organization of alcoholic beverage licensing and compliance professionals.

WIGS 20% Minimum Markup Massively Mystifies Tennessee Groceries

Wine in groceries has been legal in Tennessee for just 18 days.  But the WIGS law seems to have raised more questions than answers.

The statutory 20% minimum markup has been a constant source of questions for grocers.  Here is one of our favorites:

When the wholesale price of wine drops, what is the minimum price that can be charged?

For example, say you have purchased wine at $10 per bottle.  You price the wine at $12, the lowest legal price.

The wholesaler offers you the same wine for $9 a bottle.  You can price this at $10.80.  You buy the $9 wine, but have wine on the shelves that you purchased at $10.

Can you sell the all of the wine at $10.80, including the wine you purchased at $10?

Our best guess is yes.  We think the last invoice price will be the rule for WIGS pricing.  Look to the last invoice price and make sure the price is marked up at least 20%.

The Eagles comes to mind:

Wastin’ our time
On cheap talk and wine

There is no guidance from the ABC yet.  Given the huge number of WIGS questions, we do not fault the ABC.  Things are moving at the speed of light.

 

Original author: William T. Cheek III
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What is Glycol and why is it Required in Brewing Beer?

What is Glycol and why is it Required in Brewing Beer?

What is Glycol and why is it Required in Brewing Beer?

In the brewing industry, glycol is a necessary part of day-to-day operations. It’s used in chiller systems that run throughout fermentation tanks and conditioning tanks to control temperature during fermentation reactions. In the service side of the industry, glycol is also used for maintaining temperature of draft beer dispensing.

To be clear, we’re not talking about toxic ethylene glycol. And we’re definitely not talking about adding any kind of glycol to alcoholic beverages – which was the center of a huge scandal in 1985.

Beer brewers only use propylene glycol, and not just any kind. Even though it’s known as “food-grade antifreeze,” there are many inexpensive, low-quality glycol solutions – most of which are not designed for a brewery’s recirculation system and run the risk of causing equipment damage. For compliance and superior performance, breweries use USP-Grade Propylene Glycol. USP (United States Pharmacopeia) is the official, standard-setting authority for medicines, supplements, and health care products in the United States. Propylene glycol with USP-Grade certification assures quality and safety for use in the food and beverage industry.

In order to achieve the desired temperature, brewers must use the proper ratio of glycol to water in the chiller system. Too much glycol will cost more and limit efficiency of the chiller, while not enough glycol could lead to freezing and damage the chiller system if left unchecked.

The average brewery uses an approximate 35% glycol to 65% water solution – but this can vary depending on the ambient temperature of the facility and the type of product being fermented. To maximize the efficiency and extend the life of your chiller system, keep up with annual inspections and consult with your equipment manufacturer for optimal glycol/water ratios and preventative maintenance.

Original author: Robert Pinson
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Hot Off the Press: Tennessee ABC Issues FAQS for WIGS

Moments ago, TABC Director Clay Byrd released final guidance for wine in grocery stores, which we affectionately call WIGS.  Here is your very own copy.

WIGS has been live for consumers for 11 days, but the euphoria is still palpable.  We hear the Pointer Sisters classic:

I’m so excited, and I just can’t hide it
I’m about to lose control and I think I like it

Original author: William T. Cheek III
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Shot Gun Marriage: Tennessee Department of Revenue Releases Guide for Terminating Your Liquor Wholesaler

Shot gun marriage pretty much sums it up.  For distilleries, wineries and breweries, choosing a wholesaler in Tennessee is like marrying your high school sweat heart.  She may look great when you are in high school, but as you grow older, you have to ask “Did I find the right partner for life.”

Unlike your high school sweat heart, divorce is not really an option for your Tennessee wholesaler.  Tennessee law protects wholesalers and makes terminating the relationship practically impossible.

The Tennessee Department of Revenue recently issued a guideline for terminating a wholesale contract.  Download a copy here Guide.

Wholesale termination reminds us of the J. Geils Band tune:

You love her but she loves him
And he loves somebody else you just can’t win
And so it goes till the day you die
This thing they call love it’s gonna make you cry
I’ve had the blues the reds and the pinks
One thing for sure
Love stinks yeah, yeah
(Love stinks)

In order to start the termination process, a manufacturer has to tell its wholesaler in writing that it wants to terminate the relationship and provide specific reasons why the wholesaler is inadequate. The wholesaler has 30 days to fix the problems.

This is not something any reasonable business person would do. Why tell someone you cannot divorce that you do not like them and tell them why?

We know of no manufacturer that has terminated a wholesaler contract in Tennessee. Although scuffles between manufacturers and wholesalers sometimes result in trading brands, between wholesalers, the brand termination process in Tennessee is heavily weighted in favor of the wholesaler.

Original author: William T. Cheek III
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