Wine Retailers Throw Down Gauntlet Against Direct-Shipping Restrictions 

Thursday, December 01, 2016 1:54:00 PM

New lawsuit in Illinois challenges the constitutionality of direct-shipping laws; plaintiffs hope to reach the Supreme Court

Ben O'Donnell
Posted: September 20, 2016

The book on modern direct-to-consumer wine-shipping law was written at the U.S. Supreme Court in 2005 with the Granholm v. Heal decision. Now, wine retailers are hoping to write their own chapter in the story. Earlier this month, lawyers filed a complaint in a federal court, arguing that an Illinois prohibition on retailer-to-consumer direct shipping is unconstitutional. The same firm is preparing a similar complaint in Missouri.

The Illinois suit, filed on Sept. 1, named Lebamoff Enterprises, Inc. et al v. Rauner et al, states that Irwin Berkley, a Chicago-area resident, wants to buy "wines that are sold-out in Illinois but are still available from retail stores in other states, older vintage wines and limited-production allocated wines" and have them shipped to his home from Cap n' Cork, a chain of Indiana stores owned by fellow plaintiff Lebamoff Enterprises, but cannot.

"We think that the principles of Granholm apply to retailers just as well," Robert Epstein, lead counsel for the plaintiffs, told Wine Spectator. "And we're going to test it."

While not a party to the suit, the National Association of Wine Retailers (NAWR) hopes the case goes all the way up the judicial ladder. "We would relish the opportunity for a chance like this to get in front of the Supreme Court," Tom Wark, executive director of the NAWR, told Wine Spectator. "It would be a perfect case that's on point: Are retailers covered by Granholm?"

In Granholm, the court ruled that states could not block out-of-state wineries from shipping to local consumers if they allowed in-state wineries to do so, finding such laws discriminatory against interstate commerce. Currently, wineries can ship direct to consumers in 43 states, including Illinois and Missouri, compared with 27 in 2005.

States permitting out-of-state retailer shipping, however, have fallen from 18 to 14 since Granholm. While online shopping has made it easier for wine consumers to track down wines at out-of-state stores, state governments have increasingly banned buying from those stores.

"Generally when the Supreme Court speaks, it speaks in broad brushstrokes unless it specifically limits a decision to a very narrow finding, which in my opinion it did not [in Granholm]," said Epstein. (Both Epstein and another attorney for Lebamoff, James Alexander Tanford, originally argued one of the cases that helped bring Granholm up to the Supreme Court.)

Lebamoff comes just after Illinois tightened its prohibition on out-of-state wine retailers. On Aug. 26, Gov. Bruce Rauner signed a new law stiffening penalties against out-of-state parties for shipping wine into the state without the necessary licenses. Even small-scale shipments of wine could be prosecuted as a Class 4 felony, which carries a potential one- to three-year prison sentence.

"A Class 4 felony is on par with stalking and aggravated assault," said Wark. "We think most people would agree that the act of sending a bottle of wine to somebody who wants to buy it probably doesn't rise to the same crime as aggravated assault."

Retailers blame lobbying by state wholesalers for the law, accusing them of seeking to quash competition. At a February 2015 meeting of the Illinois Liquor Control Commission (ILCC), a lawyer for the Wine and Spirits Distributors of Illinois (WSDI) suggested that, "incarceration of one or two illegal shippers would send a strong message to other shippers that Illinois is serious."

But wholesalers argue that the three-tier system of wineries, local wholesalers and local retailers is about protecting consumers. "This legislation protects the health and safety of Illinois consumers by promoting compliance with state law," WSDI executive director Karin Lijana Matura wrote in a statement. "It's about protecting Illinois consumers by abiding by the three-tier system that this industry was established on."

Berkley and Lebamoff co-owner Joseph Doust's complaint against Gov. Rauner, Attorney General Lisa Madigan and two heads of the ILCC makes two arguments for why prohibiting out-of-state retailer direct shipping while allowing it for in-state retailers is unconstitutional: the Constitution's Commerce Clause ("it deprives [plaintiffs] under color of law of their constitutional rights to engage in interstate commerce") and the Privileges and Immunities Clause ("it denies Joseph Doust to engage in his profession as a wine retailer on terms equivalent to those to that given to citizens of Illinois").

"If you read Granholm, I don't think there's a question in my mind what the Supreme Court meant in that case was that the states may not discriminate against out-of-state shippers," says Wark. "And retailers are shippers just like wineries are shippers."

In Granholm, however, Justice Anthony Kennedy wrote in the majority opinion, "The Twenty-first Amendment grants the States virtually complete control over whether to permit importation or sale of liquor and how to structure the liquor distribution system. We have previously recognized that the three-tier system itself is unquestionably legitimate." In the past, some courts have found that the language of Granholm only protects alcohol producers from interstate commerce discrimination, not merchants.

This is not the only case raising this issue in federal court. In August, Texas Package Stores Association, Inc., an advocacy group for wine and spirits stores in the state, submitted a petition for a writ of certiorari to the Supreme Court in a similar case that has wended its way through Texas courts in various forms for a quarter-century. And Epstein and his colleagues are preparing a suit in Missouri that will make a similar argument against the constitutionality of Missouri's retailer shipping restrictions; the plaintiffs are a Florida specialty wine shop and a Missouri resident.

Legal experts believe it would take two years or more before Lebamoff found its way to the highest court, if it did. But the debate is gaining attention. Only a small fraction of the thousands of wines, both American and international, are legally available for purchase in all 50 states. Explaining his motivation, Epstein said, "I'm not only a wine lawyer, but I have been a wine writer and a collector and consumer. My ideal is to be able to have people that want to buy wine get it from whatever source they can legally in the United States."

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Illinois video gaming revenue continues to rise in fourth year; establishments and Rockford-area communities benefit 

Thursday, December 01, 2016 1:50:00 PM

By Susan Vela
Staff writer

Four years ago, bars, bowling alleys and other establishments switched on video gaming machines, unsure what to expect.

The amount of money played, machines used and establishments featuring the gambling equipment has gone up since Illinois made video gaming machines available to the public in September 2012.

As of Sept. 1, $9.2 billion had been played on 24,065 video gaming terminals at 5,615 establishments across the state in 2016, according to the Illinois Gaming Board.

If gamblers keep putting their dollars into the machines at the same pace, the state is expected to break last year’s record of $11.4 billion played. That means more money for establishments with renovation dreams and for communities plugging holes in their financial accounts.

 “It’s the type of money that you prefer not to turn away if you don’t have to,” said Mike Gelatka, president of the Illinois Gaming Machine Operators Association.

Some local communities agree. They have come to appreciate their monthly video gaming checks.

“We would have to make some serious reductions in the general fund if we were to lose that video gaming money,” said Carrie Eklund, Rockford’s interim finance director.

Fourteen Rockford establishments had 65 video gaming terminals in 2012, when Rockford’s fleet of about 530 vehicles, some purchased in 1976, was in desperate need of repairs and replacement.

Rockford's monthly video gaming checks amounted to $32,709 in 2012 and grew to $1.3 million in 2015. The city has used the funds to replace 65 percent of its fleet, which includes snow equipment, fire trucks, ambulances and police cars.

The city ranks No. 2 — with about 440 terminals — in terminal possession, second only to Springfield’s 569, according to the Illinois Gaming Board.

The village of Machesney Park has fewer than 100 gaming terminals, which have generated about $125,000 this year. The village’s annual spending plan is about $7.5 million.

“I wouldn’t call it a dependency,” Village Administrator Tim Savage said of the revenue stream. “Sure, it’s helpful. It’s very helpful.”

Anita Bedell, executive director of the Illinois Church Action on Alcohol and Addiction Problems, would like the pace of video gaming expansion to slow down.

“Each month, the gaming board continues to issue more gambling licenses,” Bedell said.

"It’s really a problem. (Communities) only get a nickel of every dollar that’s lost in the machine. That’s chump change compared to what some of these operators are getting. Those are lost dollars.”

Michelle Magee, co-owner of Logan’s Bar & Grill in Freeport, made sure her establishment had five machines in 2013.

“We’ve had them since we could get them,” she said. “They work out great. They help pay the bills when the months are slow.”

About 10 people would drop by Logan’s each day to put money into video gaming terminals in 2013. Now, up to 20 play the machines during the lunch hour and about 40 play during the dinner hour.

She has been able to use the bar’s share of the revenue to remodel a banquet facility and build a billiards room. This winter, they’ll remove the overhang over the bar to install six flat-screen televisions for big sporting events like the Super Bowl.

Jay Gesner has four establishments with video gaming terminals in the Rockford region. Gesner, president of the Illinois Licensed Beverage Association, expects gaming revenue to remain steady.

“I don’t know why that would change unless there are other avenues for people to gamble,” he said. “It’s not only the city that’s making money; it’s local business people.”

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Why alcohol has always played a role in human civilization 

Friday, October 21, 2016 4:45:00 PM

Source: Business Insider

Kevin Loria

September 21st


At the end of a long day, there's often nothing more satisfying than sitting down to have a drink with a few friends. It's a way to kick off some steam, to talk through the things that have been rattling around your mind, a moment to breathe and just be in the world.


Drinking culture has long existed around the globe, with different civilizations all developing versions of beer and wine, in many cases, elevating these beverages to to the level of a sacrament.


Yet it's true that excessive drinking is clearly unhealthy, and researchers have even questioned whether the claims for health benefits associated with moderate alcohol consumption are overstated. But some form of drinking, especially in a social or celebratory sense, seems to be an intrinsic part of human culture.


So why do we create these rituals around alcohol if it isn't so good for us in the first place?


If you ask Patrick McGovern, Scientific Director of the Biomolecular Archaeology Project for Cuisine, Fermented Beverages, and Health at the University of Pennsylvania Museum, the answer is simple. "We were born to drink," McGovern recently told National Geographic, in a brief but fascinating interview examining the human connection with alcohol.


Humans have always been drawn towards fermented fluids, according to this theory. They're packed with calories - vital energy - and at many times in history they've been safer to drink than potentially contaminated water. Plus, of course, they have that inebriating effect that takes us to a different plane.


McGovern, sometimes referred to as the "Indiana Jones of Ancient Ales, Wines, and Extreme Beverages," has a stake in the matter. He likes drinking himself and works with Dogfish Head Brewery to recreate ancient beer recipes, like the honey-rich Midas Touch, developed from ingredients found in the 2,700-year-old tomb of King Midas (it's tasty). But he's also expressing an idea that many other anthropologists and archaeologists agree with: Fermented beverages played a critical role in spurring us to set up the communities that became civilizations in the first place.


We domesticated grains so that we could mash them up and let them transform into intoxicating liquids that would bring us together. According to this argument, beers came before breads.


"As humans came out of Africa, they developed these [drinks] from what they grew," McGovern tells Nat Geo. "In the Middle East, it was barley and wheat. In China, rice and sorghum. Alcohol is central to human culture and biology because we were probably drinking fermented beverages from the beginning."


Excessive alcohol consumption is a serious health issue that can't be glossed over - it's responsible for numerous deaths and many shortened lives, according to the CDC.


But if you safely can and want to have drink or two with your friends, you can think of it as a human cultural ritual, a way of engaging with your prehistoric ancestors. Cheers.

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Pennsylvania: The Beverages Strike Back; Lawsuit Filed To Block Philly's Sugar Tax 

Monday, October 17, 2016 12:24:00 PM

Source: Yahoo News


September 15, 2016


A soda tax passed by the city of Philadelphia may be unconstitutional, at least according to the American Beverage Association (ABA).


The city of Philadelphia passed a soda tax that adds 1.5 cents per ounce to the cost of sugary drinks and will become effective on January 1, 2017.


According to Phillymag, the ABA along with local residents and businesses are arguing that the city has no right to tax soft drinks on top of the already existing state sales tax. The city argues that its tax is not classified as a sales tax because the distributor rather than the consumer is taxed.


Naturally, the ABA believes the tax imposed on the distributor will be passed on the consumer.


According to the lawsuit, the city "may not circumvent the Commonwealth's supreme taxation authority simply by changing its label or shifting the point at which the Tax is imposed."


The suit also argues that the city must tax similar products equally which it is not doing. Moreover, the city cannot tax products that are purchased through food stamps or the Supplemental Nutrition Assistance Program.


The city plans on allocating the new tax revenue, estimated to be around $91 million a year, toward pre-k, community schools as well as parks and recreation centers.

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Retailer Wine Shipping: On The Litigation Front 

Monday, October 17, 2016 12:21:00 PM

Source: NAWR

September 14th, 2016


It is ironic that as the Internet wine retail market has heated up over the past decade, the one entity that has been actively discouraged from participating in that heat up is the American wine retailer. As a result of lobbying efforts to protect local retailers and wholesalers, wineries approving of bans on retailer direct shipment, and, importantly, judicial uncertainty, the most qualified sellers of wine in America, wine retailers, are largely banned from participating in the growing wine retail marketplace.


All this makes two separate federal lawsuits working their way through the courts important battles for wine lovers, free marketeers and wine retailers.



With its recent Petition for Writ of Certiorari before the U.S. Supreme Court, the Texas Package Store Association (TPSA) is asking the Court to decide once and for all whether and how the 2005 Granholm v. Heald decision applies to both retailers and wholesalers. The TPSA attempted to convince the Fifth Circuit Court of Appeals that the Granholm decision explicitly protected state laws discriminating against wine wholesalers and retailers from review under the non discrimination principles of the dormant Commerce Clause as laid out in the 2005 SCOTUS opinion. The Fifth Circuit Court held the non-discrimination principle did, though only weekly, apply to wholesalers and retailers when it refused to dismantle a long-standing injunction against Texas from enforcing a multi year residency requirement before a retail license could be granted. This decision conflicts with decisions in both the Eighth and Second Circuits that both proclaim Granholm require that out of state wineries be treated equally with in-state wineries where wine shipping is concerned, but also that retailers and wholesalers had no such claim to fair treatment under the tenants of the Dormant Commerce Clause.


This case is important because if it is granted Certiorari by SCOTUS, the Court, in its review of the case, will have the optio to finally answer the question: Can states discriminate against out-of-state wine retailer shipping for the purposes of protecting in-state economic interests? On the other hand, if cert is granted the Court could decide to take a very narrow look at the case in question and not address retailer shipping. Either way, NAWR will be closely watch this case as will retailers and wholesalers across the country



Only recently filed, Lebamoff v Rauner challenges Illinois blatantly discriminatory treatment of out of state wine retailers. Illinois allows in-state wine stores to ship wine directly to Illinois consumers, but bans out-of-state wine retailers from doing the same. The claim of discrimination and violations of the commerce clause are essentially the same as those that won at the federal district courts in Texas and Michigan, but lost in the Fifth Circuit and Second Circuit Courts of Appeal.


What's at stake? Certainly millions, if not billions, of dollars. While we have documentation of the size of the WINERY-to-Consumer shipping channel via the ShipCompliant Annual Winery Shipping Report ($2 billion annually), what we don't have is any documentation showing how much wine is currently being shipped via the RETAILER-to-Consumer shipping channel. However, given the persistence of retailers and the thirst for hard to find wines, imported wines, rare wines, Kosher wines, wine-of-the-month clubs and wine auctions, it is reasonable to assume that the RETAILER-to-Consumer shipping channel is at least half the size of the WINERY-to-Consumer Channel if not larger.


But this begs the question, if American consumers were not dissuaded by arcane, protectionist laws from buying wine via the Internet from retailers and having it shipped to them, how large would the Retailer-to-Consumer shipping channel be, particularly considering that retailers have far more experience selling online and marketing digitally than wineries do?


The National Association of Wine Retailers believes the Lebamoff case filed in Illinois is solid and well founded as a matter of Constitutional law and will support the plaintiffs in any way possible in their attempt to bring justice to the ossified, arcane and discriminatory Illinois alcohol regulatory system.

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Restaurant Groups Urge High Court To Review Tip Pool Rule 

Monday, October 17, 2016 12:19:00 PM

Source: Law360

By Braden Campbell

September 13, 2016


A handful of restaurant associations recently urged the U.S. Supreme Court to take up an appeal of a Ninth Circuit ruling that the U.S. Department of Labor can stop employers from tip pooling, saying that the rule hurts minority workers and that a circuit split on the agency's rulemaking puts restaurants in a costly bind.


The National Restaurant Association, the National Federation of Independent Business and other hospitality groups filed an amici curiae brief last week, piggybacking on Wynn Las Vegas' August petition for the high court to decide whether the DOL acted within its statutory authority when it barred restaurants from including kitchen staff in tip pools. A separate suit filed by the trade groups against the DOL was consolidated in the Wynn suit.


In their brief, the groups argued that the regulation disproportionately favors mostly white, female restaurant service staff by taking money out of the pockets of minority, male kitchen workers and that complying with the "unsettled" rule - which has been rejected by some courts and allowed by others - forces restaurants to choose between costly lawsuits or upending traditional industry pay practices, which is likewise expensive.


"The department's regulations are ill-conceived and backward," the trade groups said. "This regulatory frolic and detour presents an especially appropriate candidate for this court's timely intervention to prevent any further damage to the restaurant industry and the many jobs it creates in communities across the country."


Wynn's petition asks the court to settle a disagreement between the Ninth, Federal and Fourth circuits over whether the Fair Labor Standards Act allows the DOL to issue rules covering areas in which the empowering statute is silent, as was the case here.


The Ninth Circuit in February held in a published opinion on a suit by Wynn casino dealers that the DOL is within its rights to bar employers from using tip pools by expanding existing prohibitions to cover all restaurants. The decision reversed two rulings by district courts in separate cases that were consolidated in the appellate case - an Oregon federal court decision in the trade groups' case and a Nevada federal court decision in the Wynn case. A split Ninth Circuit panel declined last week to rehear the consolidated cases, with one panel member and nine other circuit members dissenting over perceived failures of the ruling.


The restaurant associations also took issue with the decision, writing in their brief that the rule has led to a wave of class action lawsuits against restaurants uncertain of the best way to comply, given the circuit split.


"The issue is not going away, and only the definitive guidance that this court can bring will resolve the matter," the associations said. "The only real questions are how much money litigants will have to spend on lawyers' fees and how much time the federal courts will have to devote to class actions involving this issue, in the meantime."


The groups also argued that the rule confers a "uniquely privileged status" for the majority white dining room staff by requiring all tips go their way while depriving more ethnically diverse kitchen workers - whom they claim are already paid worse than their service counterparts - of a share.


"The last thing that agencies of the federal government should be doing is building obstacles to African-American and Hispanic male workers achieving higher levels of income," the associations said. "Yet that is precisely what the department's regulations accomplish."


In an interview with Law360 on Tuesday, an attorney for the restaurant associations, Paul DeCamp of Jackson Lewis PC, called the issue one "of great importance to restaurants across the country" and urged the Supreme Court to provide some clarity.


"The Ninth Circuit, quite frankly, got this issue completely wrong," DeCamp said. "Ten judges in the Ninth Circuit agreed that the court's opinion botched this issue badly, and at this point, now only the Supreme Court can fix it."


On Monday, the restaurant groups asked the Ninth Circuit to stay the Labor Department's appeal of the underlying Oregon federal court decision in their suit, pending a decision on Wynn's petition in the consolidated case. The stay was granted on uesday.


Attorneys for the restaurant groups and representatives for the U.S. Department of Justice did not immediately respond to requests for comment on Tuesday.


Joseph Cesarz and Quy Ngoc Tang and the other casino dealers are represented by Leon Greenberg and Dana Sniegocki of Leon Greenberg PC.


The associations are represented by Angelo Amador of the National Restaurant Association and Paul DeCamp of Jackson Lewis PC.


The writ of certiorari is Wynn Las Vegas LLC and Steve Wynn v. Joseph Cesarz and Quy Ngoc Tang et al., case number 16-163, in the Supreme Court of the United States. The appeal circuit cases are Oregon Restaurant and Lodging Association et al. v. U.S. Department of Labor, case number 13-35765, and Joseph Cesarz et al. v. Wynn Las Vegas LLC et al., case number 14-15243, both in the U.S. Court of Appeals for the Ninth C

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Underage Drinking & Smoking Continues To Decline 

Monday, October 17, 2016 12:17:00 PM

Source: Yahoo News

September 12, 2016


Underage drinking and smoking in the United States is still in a downtrend, according to a recent report by the Substance Abuse and Mental Health Services Administration.


A little more than 4 percent of teens between 12 to 17 years old declared having smoked a cigarette in the month previous to the survey, which was conducted in 2015. This figure compares to 27 percent of young adults aged 18 to 25.


More significantly, these figures imply a marked decline from the figures seen in 2002, when 13 percent of teenagers and 40 percent of young adults said they smoked in the month the preceded the survey.


Everyday young smokers are also less than in 2002, with only 20 percent of young adults smoking every day, versus 31.8 percent in 2002.


Numbers for alcohol usage among the 12-to-17 age group also fell, from 17.6 percent in 2002, to 9.6 percent in 2015.


This data suggests that public health initiatives to reduce underage substance consumption are working, according to Kana Enomoto, principal deputy administrator at the SAMHSA,.


"As cigarette smoking among those under 18 has fallen, the use of other nicotine products, including e-cigarettes, has taken a drastic leap. All of this is creating a new generation of Americans who are at risk of addiction," Health and Human Services Secretary Sylvia Burwell said a few months ago.


The SAMHSA's report also looked into the use of illicit drugs, the misuse of psycho-therapeutic drugs, substance use disorders and mental health issues, among other subjects.

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Monday, October 03, 2016 4:41:00 PM

The U.S. House of Representatives voted last night to delay adoption of pending overtime pay rules by six months, pushing back the start date to June 1.

The measure has yet to be taken up by the full Senate, and President Obama has already issued a statement promising to veto the legislation. Yet the vote last night was hailed as a victory for restaurants and other small businesses by such groups as the National Restaurant Association.

“We are grateful that Congress stood with small business and passed the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act,” the NRA said in a statement. “We continue to work with key senators on both sides of the aisle to find a resolution in both houses.”

Hopes for a delay in the Senate were buoyed by the partisan vote in the House. The delay measure was passed nearly along party lines, 246-177. The Republican Party also controls the Senate.

The vote in the House came on the same day Congress overrode President Obama’s veto of a bill allowing U.S. citizens to sue Saudi Arabia for damages relating to 9/11. The two-thirds vote marked the first time Congress has overturned an Obama veto.

The new overtime rules, issued by the Department of Labor earlier this year, are scheduled to take effect on Dec. 1. The regulatory change doubles the threshold that determines which salaried employees would be entitled to time-and-a-half pay for work exceeding 40 hours per week. Anyone on salary who earns less than $47,476 on an annual basis would be eligible for the higher pay. The threshold is currently $23,660.

Twenty-one states recently joined forces to challenge the rules in court, arguing against the use of salary as the test of eligibility. 

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US Surgeon General urged not to penalise responsible drinkers 

Monday, October 03, 2016 4:29:00 PM

Source: the drinks business

by Patrick Schmitt

8th September, 2016


Key US drinks trade associations have united to express their concern about an upcoming report on alcohol misuse that targets responsible consumers rather than problem drinkers.


Figures such as Robert Koch, who is president of California's Wine Institute, and Kraig Naasz, who heads up the Distilled Spirits Council, have signed a letter this week to the US Surgeon General Vice Admiral Murthy urging him to "reject calls for the inclusion of unproven, population-based policy recommendations aimed at consumers in general rather than abusive drinkers."


The letter - which can be seen below ­- asks the Surgeon General "to consider offering the public an opportunity to comment on the report prior to its final release."


It also states, "Recommendations that penalize responsible consumers of alcohol have no place in a report of this nature."


In an article from the September issue of The Weekly Standard, Kevin Kosar observes that "neo-prohibitionist anxiety has begun to spread" from the UK to the US, helped by "alarmist" reporting by US newspapers such as The Washington Post.


He observes the march of the "no alcohol is safe" argument, but points out that this "ignores the fact that just about everything - even activities with obvious and abundant benefits - carries a risk or cost."


Indeed, he writes, "Responsible drinkers are not drags on society. On the contrary, drinkers tend to earn more than teetotalers and are twice as likely to exercise."


The letter from the US trade associations to the Surgeon General can be seen below:


Dear Vice Admiral Murthy,


As the national trade associations representing producers and importers of beer, wine and distilled spirits products sold in the United States, we are writing regarding your upcoming report on the health effects of drugs, both illicit or otherwise, as well as alcohol misuse. While the overwhelming majority of Americans consume alcohol lawfully and responsibly, we welcome your efforts to destigmatize treatment and recovery for those for whom alcohol consumption is a concern.


We appreciate your care in ensuring that you base any conclusions and recommendations on widely-accepted evidence endorsed by the scientific community with expertise in prevention and treatment. You have great resources in NIAAA and SAMHSA, which lead this country's research efforts on evidence-based ways to prevent and treat alcohol abuse. We hope you will look to those agencies for meaningful guidance and reject calls for the inclusion of unproven population-based policy recommendations aimed at consumers in general rather than abusive?drinkers. Recommendations that penalize responsible consumers of alcohol have no place in a report of this nature.


We would welcome the opportunity to meet with you to convey our concerns in greater detail and discuss the state of the science in this regard. We also urge you to consider offering the public an opportunity to comment on the report prior to its final


release. This will help ensure that the report provides targeted guidance to the American people that will be both helpful in terms of encouraging treatment and recovery and well-respected in terms of its scientific underpinnings.

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PD: Independent restaurants struggle against larger competitors 

Friday, September 09, 2016 4:23:00 PM

Small operators share strategies for success amid shrinking independent segment


Source: NRN

Fern Glazer

Aug 30, 2016


The United States may be the home of the American dream, but it's more difficult than ever to live that dream by operating an independent restaurant.


New data from market research firm The NPD Group reveals that despite the country's economic recovery, a staggering number of independent restaurants have closed in the last four years, while the number of chain restaurants continues to grow.


"Independents are declining across the board, with some of the steepest declines occurring in the largest markets," said NPD analyst Bonnie Riggs. "It's a tough market. They just have not been able to compete."


According to The NPD Group's ReCount database, which tracks commercial restaurant units across the U.S., there are 19,000 fewer independent restaurants today than there were in 2012. Compare that to chains, which have added 17,000 more locations in the last four years.


While the increased chain competition is part of what's behind the decline of independents, Riggs says there are other contributing factors.


"As more chains come on the scene, it's difficult for independents to keep up with marketing dollars," Riggs said. "[Also,] a lot of independent restaurants didn't stay relevant in terms of consumer needs."


Independent restaurants have been declining most in the Mountain region, which includes Oregon, Washington and California; the Mid Atlantic region, which includes New York, Pennsylvania and New Jersey; and the West North Central region, which includes the Dakotas, Nebraska, Kansas, Missouri, Iowa and Minnesota. In the year ended March 2016, independent unit counts fell 4 percent in each of these regions.


Other regions experiencing a notable decline in independent restaurants during the same period include the South Atlantic, New England and East North Central. Only three regions - East South Central, West South Central and Pacific - have managed to hold steady, with a decline of 1 percent or less in independent restaurants.


Among independents across the country, those that are doing best are quick-service restaurants in the bakery-snack and varied menu categories, followed by casual-dining restaurants in the seafood and ethnic categories.


Catching the American dream


Although the odds are stacked against independent restaurateurs in the U.S., many have found a formula to keep customers coming back, including the owners of Malai Kitchen, a Vietnamese and Thai casual-dining restaurant in Dallas, and Solomon & Kuff, a Caribbean restaurant and rum hall in New York City.


Malai Kitchen


Malai Kitchen, a casual-dining restaurant in Dallas that specializes in Vietnamese and Thai cuisines, along with house-made Sriracha and house-brewed Thai beer, stands out in a land of steak and potatoes.


"What we have here is something different, unique," said Yasmin Wages, who co-owns Malai Kitchen with her husband, executive chef Braden Wages. "We're showcasing something that's increasingly more popular."


But being different in a sea of sameness isn't the only thing that has helped this five-year-old eatery grow year-over-year sales by 12 to 15 percent.


"[We have] a top-line philosophy - it means invest, invest, invest and people will come," Wages said. "The moment you start skimping, you lose people's trust."


That investment strategy has translated into everything from using only the best quality ingredients (fresh, not frozen), to annually updating the dining room décor, to growing with customer needs by participating in new food delivery services.


Wages knows she can't compete with the fat marketing budgets of national restaurant chains, so she relies instead on serving top-quality food and training her staff to deliver an exceptional dining experience in order to generate positive word-of-mouth. The restaurant also generates buzz with the help of a public relations firm.


"It forces us to stay creative. To think of new ways to make us sound cool and neat," Wages said. "You have to constantly stay relevant or you will not succeed."


Solomon & Kuff


Partners Julie Grunberger and Karl Franz Williams know a thing or two about what it takes to keep an independent restaurant open in highly competitive New York City.


Before opening their 5,000-square-foot Caribbean restaurant and rum hall in late 2015, Williams, who has two other concepts open, and Grun had gone through the experience of having to close a restaurant.


"Competing in New York is tough," said Williams. "For independents, two things are critical: experience, [having] the right kind of experienced people, [and being] properly capitalized. If you don't have these two things, you're going to struggle."


The partners are both experienced and well capitalized, and the uniqueness and authenticity of their island concept - something the duo says chains simply can't do as well - is a big draw. But they know firsthand that it is tough to compete with the voice, scale and marketing dollars of large restaurant operators.


But they are finding their own way to get scale by leveraging their previous ownership experience and Williams' other restaurants to obtain more favorable deals with vendors, and even with their public relations firm. Additionally, in the past Williams has met scale challenges by banding together with other small business to form buying groups.


"Scale is necessary. All things that are challenges for independents are less challenging because of the other two restaurants," said Williams. "The small business myth . it's the American dream. Really, the American dream starts when you have scale."

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