Readers of a certain age will recall a 1960s TV series called “The Untouchables” featuring Robert Stack as Elliot Ness, a Prohibition agent in Chicago in the late 1920s.
Ness, under the aegis of the then-Bureau of Prohibition, was credited with breaking mobster Al Capone’s hold on Chicago by destroying Capone’s extensive bootlegging network.
Photos of Ness and his hand-picked team smashing huge vats and beer tanks and pouring illicit booze out into the streets helped viewers forget Ness was not simply an axe-wielding, anti-alcohol Carry Nation but a federal tax agent, making a case against Capone for tax evasion.
Ness and Capone are gone but the feds, through the Alcohol and Tobacco Tax and Trade Bureau (TTB), still keep a sharp eye on who pays their excise taxes.
Wines are taxed at state and federal levels at varying rates according to the wines’ alcohol-by-volume content (it’s similar for beer and spirits). The higher ABV, the higher tax per gallon. The rates goes from $1.07 a gallon (21 cents per .750 ml bottle) for wine with up to 14 percent ABV up to $3.15/gallon for wine with 21-24 percent ABV.
Wineries can either pay the taxes as they come due (see below) or post a bond, an insurance policy of sorts, against the tax bill.
Bonds are fairly cheap, as low as $100-$200 for the smallest wineries.
“The concept of a bond was the feds having some assurance you will pay your excise taxes,” said Bob Witham of Two Rivers Winery and Chateau on the Redlands.
Once a wine is “produced”, meaning fermentation is done, it is subject to excise tax. A winery doesn’t have to pay the tax until the wine is ready to be sold or consumed. By storing (aging) the wine in bottle or barrel in specially designated bonded areas, the winery can delay paying these taxes.
Once the wine moves out of the bonded area, which may be somewhere in the winery or an offsite storage unit, the excise taxes are due. Read more…
If you’ve been out cruising downtown any night this winter, you’ve probably noticed how busy some of the city’s more-popular restaurants have been.
And if you looked twice, you might also have noticed how many of those guests with a glass of wine in front of them were younger women.
That trend gets analyzed in a recent report from the Wine Market Council, which says people in their 20s and early-to-mid 30s now drink almost half the wine bought in the US.
What’s more, in what’s called the “high-frequency drinker” segment, women under 30 women are out-purchasing men two-to-one when it comes to wine.
Now, “high-frequency drinker” isn’t as lascivious as it sounds. According to the WMC, it refers to someone who drinks wine more than once a week. That faction buys and consumes 81 percent of all the wine drunk in America, says WMC.
Again, the WMC report says Baby Boomers account for the largest group in the high-frequency class, but Millennials (those people born between 1978 and 1995) are right behind them, making up 30 percent of frequent drinkers.
How fast the kids grow up. Read more…
Looking out at a well-lit seminar room on the second floor of the midtown Hilton Hotel, at tables laden with wine glasses and lined with eager listeners, McCoy informed her audience that “It couldn’t be a better time for wines from southern Italy.”
It was a theme to be repeated, although never again quite as succinctly, throughout the all-too-short run of this year’s Italian Wine Week presented by the Italian Trade Commission. Subtitled “The Grandest Italian Wine Event Ever Held Outside of Italy” and focusing this year on wines from Calabria, Campania, Puglia and Sicily, the event (this year was its fifth edition) brought together about 200 Italian wineries (not all from the south and about a quarter of which were looking for a U.S. importer) and countless importers and distributors and other wine-trade people.
Among the many memorable remarks from the week’s speakers and guests:
“This week there is a peaceful invasion of Italian producers and wine experts.” – Maurizio Forte, Trade Commissioner and Executive Director for the Italian Trade Commission.
“The U.S. market is the most-important market for Italian wine; we export almost $1.5 billion per year.”– Maurizio Forte
Wines from southern Italy are largely unknown to the U.S. market because “most American tourists still do not visit Southern Italy.” – former wine director Charles Scicolone.
“They are a ‘hand-sell, meaning that it often takes talking about these wines and explaining them to the customer in order to get them to try a bottle or two.” – Charles Scicolone
“People want to know who you are, not just your wines.” – Chad Turnbull, president of New York-based importer Savorian, Inc., told the producers. “One of the most fundamental things you can do is to introduce yourself to your market.”
“Puglia and Calabria are at the edge of the western world.” – blogger/importer/Italophile Jeremy Parzen. “They just needed a small nudge to enter the modern world of winemaking.”
“When you taste (the wines of southern Italy), it’s hard to imagine what the wines were like 20 years ago.” – Elin McCoy. “These were wines you didn’t want to know about.”
“Sicily is sexy; it was sexy even before the wines were so good.” Roberta Morrell, president and CEO of Morrell Wine Bar and Café, New York City.”The good reds came before the good whites…now the whites are fresh, fruity and minerally.”
“I’m consumer driven. If you can’t say it, you can’t buy it.” – author/wine educator Kevin Zraly.
“In Italy, people mostly eat at home.” – restaurateur/ author Lidia Bastianich. “First, because good eating means eating their mother’s cooking, nobody makes it better, and secondly, because of the economic crisis that is currently afflicting the country.”
“Buying a wine made in Italy means buying a piece of wine history from a country that has made wine for a thousand years.” – journalist Luciano Pignataro.
As this space noted earlier, voters in Colorado will face the question whether to allow grocery stores to sell wine, spirits and full-strength beer.
Since that posting, a new consideration has arose.
Kroger Co., the country’s largest supermarket chain and owner of the eponymous Kroger grocery stores as well as King Soopers, City Market and others, has “proposed a plan that would let a private distributor oversee how much prominence brands get in stores,” according to the Wall Street Journal.
Plus, the WSJ goes on, the alcohol companies will be asked to pay for the distributor to find shelf space. (The original article is behind the WSJ paywall but you can read a summary here in an article from Money magazine).
In other words, pay for exposure.
Already this sounds like bad news for locavores supporting small-batch producers.
Not every small winery, brewer or distiller will notice the change. Many of them are too small to use state or national distributors and many of them sell most of their product through the front door.
But for those who depend on a distributor, or simply rely on the willingness of a retailer to find room on a shelf, the Kroger proposal is bad news.
Finding a place to sell small-batch wine, beer and spirits already is tough; just ask the winemakers, distillers and brewers who make weekly rounds of stores, making sure they haven’t lost shelf space to large distributors also trying to find space for their products.
Competing for premium shelf space just got harder, as writer W. Blake Grey assets here, against national distributors who can pay for better positioning.