Vermont Legislature SmartTranscripts:

[Tucker Anderson, Legislative Counsel]: Alright. We are in line. Alright.

[Representative Matthew Birong (Chair)]: Welcome back, folks. A little bit before eleven. We are joined by Vinny Eads, the president of the Distilled Spirits Council of Vermont. And this is a discussion in and around the bill that I spoke to earlier that has yet to receive a bill number, but it is under Tucker Anderson's name, alcohol bill pre introduction draft. So we are gonna we'll discuss this the words on the page deeper with counsel later, but I wanted to offer Amy the opportunity to speak to the bill, as a as a stakeholder and advocate of the ones on that page. Good to see you again.

[Amy (Mad River Distillers; Distilled Spirits Council of Vermont)]: Yeah, thanks for having me. The two items in this draft bill, I think, are relatively uncontroversial. And they speak to two problems that the Distilled Experience Council has in the state. One, I'm sure you know that there is now an electronic portal for the DLL, where we submit for licenses and that kind of things. Well, if you want to do a tasting in an agency store, so an eight zero two Spirit store, the portal will not let you apply for that if it's within five business days of the event. And that was really a leftover holdover from the days where it was all paper. But the department turns them around very quickly now since it's all electronic. And we're asking that the language be changed to, say, at least one business day. And we're fully aware that there are times when the department will not be able to turn over permits that quickly. But for the most part, they've been doing them within two to three days. And that's really just because, especially around the holidays, there's a lot of scheduling changes. So if I went into Yankee Spirits, for example, today, and they said, oh, yeah, we have an opening. You could do a tasting on Saturday. As it stands right now, I couldn't get that permit speak. So that's one change that we're asking for. And as far as I know, the Department of Liquor doesn't have any objections to that. So that's one of the items. The other problem that we have, right now, we can only sell other Vermont alcohol products at one of our Class license locations. And that's great. But I think in the past number of years, everybody knows that staffing has been a real issue with Vermont businesses. And so as much as I would love to open more tasting rooms in other parts of the state and increase our presence in other areas, it's very difficult. I feel like it's more difficult than ever to do that just because we can't staff them. So how do we get our products in front of more people, especially tourists? There's, what, 80 agency stores in the state. But I would say that most tourists aren't going into agency stores if they even understand how the system works in Vermont, maybe if it's attached to a grocery store there. So that leaves our tasting rooms and establishments to kind of get the word out about our products. So we would love to be able to sell other Vermont manufacturers' products in more locations. And that could open it up to be able to have let's say we wanted to do a Distilled Spirits Council of Vermont store. It would be under one person's license, and then we could sell multiple products from other Vermont manufacturers. Or let's say we wanted to do something in the airport. Mad River Distillers already does this at one of our locations. We don't make vodka or gin, so it's really nice to be able to highlight Bar Hills, which is very local to us in the Mad River Valley, at one of our tasting rooms. But I can't also do that at our store in Burlington, because I'm only allowed to use one license. So the idea here is to open it up to multiple Class IVs so that we can highlight and tag team with other Vermont producers,

[Representative Lisa Hango (Vice Chair)]: if that makes sense.

[Representative Matthew Birong (Chair)]: Representative Hango, at the end?

[Representative Lisa Hango (Vice Chair)]: Yeah, I had two questions. The first on the DLL portal issue, what will be the expectation from the industry if the agency is not able to fulfill the request within that one day period? Will there be people that are counting on it at the holiday season, for instance, and see it in writing and say, well, you didn't get back to me within that one day. We missed the opportunity.

[Amy (Mad River Distillers; Distilled Spirits Council of Vermont)]: I think that there is I mean, the way it works now for regular permits, they go to the town first, and then they go to the DLL. For agency tastings, they go right to the DLL. Usually, we just pick up the phone call them and say, hey, did you notice this permit? And in this case, they might say, oh, if somebody is on vacation or they're not there and they can't turn it around. I mean, I don't see that as a problem, especially when you're doing something last minute. We all know that we're at the mercy of either the town or the DLL schedule. I don't know if there's a way to put language in there that says something like, if at all possible, if you know what I mean?

[Representative Lisa Hango (Vice Chair)]: I think that's called, but I don't know, I'll defer to counsel if practicable. I think that's the word, but we can talk about that with counsel. Because I just don't want this to look like this is the statute. It has to

[Amy (Mad River Distillers; Distilled Spirits Council of Vermont)]: be done. It has to be done.

[Representative Lisa Hango (Vice Chair)]: My other question is just a clarification, probably. So with the other proposed change, it's all about location. It's not about product, the change in quantity. Right? It's about well, so

[Amy (Mad River Distillers; Distilled Spirits Council of Vermont)]: the current statute says at only one fourth best license, so that's the location. And then the part two says, A manufacturer rectifier may sell its product to no more than five additional manufacturers. So it is about Yeah. So there is And I mean, I think that that's fine. I think it would be nice if there wasn't a restriction so we could sell more than that. I don't think a lot of people will do this, but I think it's nice to have the option. For example, if we wanted to do a collective tasting room, something like that.

[Representative Matthew Birong (Chair)]: Any other thoughts for me?

[Representative Lisa Hango (Vice Chair)]: I'm just going to further clarify with the second instance. So it would be 10 locations with any number of manufacturers represented at that tasting location. Is that

[Amy (Mad River Distillers; Distilled Spirits Council of Vermont)]: what you're going with? Yes. Up to ten fourth class licensed locations, and then may sell alcoholic beverages produced by any Vermont manufacturers or rectifiers. And then part two, you could either strike out part two or change it to a manufacturer or rectifier may sell its product to any Vermont manufacturer or rectifier. I think the priority here is really just the first part, add up to 10. I think the second part is nice, but kind of a wish list item that I don't think it's that controversial, but it could be helpful in the future.

[Representative Matthew Birong (Chair)]: And you're referring to citing too?

[Representative Lisa Hango (Vice Chair)]: Yes. I guess I'm just remembering back years ago to the conversations that we experienced in other committee when this all came up, that there was concern about the number of locations and the number of products offered. It was very, very restrictive at that time. Yes. The climate was very restrictive at that time. Yeah. This seems to be opening up a lot.

[Amy (Mad River Distillers; Distilled Spirits Council of Vermont)]: I think we're just having The industry as a whole needs to get our products in front of more people. And I think that tasting rooms are great, but they're very expensive to operate and staff. So being able to tag on to other people's existing tasting rooms is really what we're that's the goal of opening this up.

[Tucker Anderson, Legislative Counsel]: Okay.

[Representative Matthew Birong (Chair)]: Any other questions for me right now? Thank you so much. Okay, thank you. Joining us in person?

[Tucker Anderson, Legislative Counsel]: Yes.

[Amy (Mad River Distillers; Distilled Spirits Council of Vermont)]: Nice to meet you.

[Representative Matthew Birong (Chair)]: And we will pivot over to council. High council.

[Tucker Anderson, Legislative Counsel]: Good morning. Tucker Anderson, legislative council. Happy to be here to talk about some of the proposals that you've just heard. And has the committee seen a copy of the draft of some of this? Yes, sir. Okay. So then I will discussing Yes. Work directly off of that. And, Nick, I asked for permission to share my screen just so that we could take a look at the underlying statute so I can flag some things about some of the broader scope of the work that the committee is doing within the fourth class license structure, some of the proposals that you've heard, and how they might interplay with each other if you were to fold all of them into miscellaneous alcoholic beverages, Phil, at some point this session. I love that as

[Representative Matthew Birong (Chair)]: a work exercise. Thank you.

[Tucker Anderson, Legislative Counsel]: Exercise. My least favorite form of exercise.

[Representative Matthew Birong (Chair)]: And that's just subject matter specific.

[Tucker Anderson, Legislative Counsel]: Let's see if I'm sharing the right thing here. It looks like it. The fourth class licenses. So you've already heard a little spiel from me on what this section of law covers. In general, you can think of this as manufacturer tasting rooms and also licenses for farmers market locations. There are service limitations depending on the type of fourth class license that is being issued. Something to keep an eye on because one of the proposals that you have heard so far this session is to increase the serving size limitations within this section of law. That paired with an expansion of the number of locations and the possibility of allowing more than just the manufacturer's products at an increasing number of these locations starts to cross over into what is the substantive difference between fourth class license locations and the other licenses that you have in Title VII? And specifically, just because you're talking about distilled spirits this morning, what would the difference be between a, fourth class license location that is not contiguous with the manufacturer's manufacturing location where they serve not only their own beverages but other distilled spirits manufacturers beverages in larger serving sizes and a third class standalone license. An important question to ask because the fee difference for the Department of Liquor and Lottery and the state is about $1,000 So taking a look at section two twenty four very quickly, currently an applicant can, receive up to twenty fourth class licenses, provided that they pay the fee, which is $70 for each one of those, and an application. At each location, the licensee can serve by unopened container or distribute by the glass alcoholic beverages that the manufacturer has produced. Not more than two ounces if it's malt, viners or RTDs with a total of eight ounces to an individual customer. And for purposes of distilled spirits manufacturers, no more than one quarter ounce of spirits or fortified wine with a total of one ounce. So that's a quarter ounce per drink, no more than one ounce served to each customer. However, move on through this. If it is contiguous with the manufacturing premises, the license can distribute by the glass up to four mixed drinks, a combined total of no more than one ounce of spirits or fortified wines to each retail customer on the license premises. Right, now we move into some of the language that you see in representative Boyden's proposal in Section one, which is to amend subdivision C1 to allow at not more than 10 is the proposal in the draft. In current law, it's not more than one license location a manufacturer may sell by the unopened container or distribute by the glass with or without charge alcoholic beverages produced by no more than five additional manufacturers or rectifiers. The section goes on to amend subdivision manufacturers to sell its product to any Vermont manufacturers or rectifiers. Broadens the distribution pool for purposes of these tasting rooms and pasting locations at farmer's markets.

[Representative Lisa Hango (Vice Chair)]: Alright,

[Tucker Anderson, Legislative Counsel]: fourth class license locations that are issued for farmers markets shall be valid for all dates for the specific farmers market location. And then we get into rules, signs, DLL, administrative material. So the one thing that I wanted to flag was just as you move forward with this, I flag it every session biennium that the committees of jurisdiction take a look at overlapping proposals within the licensing sections is just to look at the differences between first, third, fourth, and then some of the permits that manufacturers can pull and make policy, informed policy decisions about what the distinctions between those license categories are. There are differences in the fees that may become important from an administrative perspective that DLL may testify about. And then there are just important policy distinctions that you all may want to make between the availability and saturation for alcoholic beverages within the space.

[Representative Matthew Birong (Chair)]: The

[Tucker Anderson, Legislative Counsel]: other section within the representative Boyden proposal proposes to amend seven VSA section two fifty five and I apologize for being late. It sounds like you heard about this first before I got here. It proposes to amend the retail alcoholic beverage tasting permit statute to require only one day of notice prior to scheduling the date for that retail tasting permit.

[Representative Matthew Birong (Chair)]: Representative Boyden?

[Representative Lucy Boyden (Clerk)]: Just want clarify that that is supposed to be one business day?

[Tucker Anderson, Legislative Counsel]: Instead of just like, day is a day is a day, unless it's a business day.

[Amy (Mad River Distillers; Distilled Spirits Council of Vermont)]: Perfect exercise.

[Representative Matthew Birong (Chair)]: Thank you for that. I got shot migrated in many different directions in this building these days. So, yeah, one of the other things we were discussing were a break in between the previous I mean, this one. Was I think it was Robert Evans who was shot at speaking with us. You wanna speak to what we were talking about, just as sort of like an educational format or agenda?

[Representative Chea Waters Evans (Ranking Member)]: Sure, sure. I don't mind. I'll just ask, Tucker, the question that I asked you, which is, you're talking about the three tiers, Yeah, My original question was, why? Specifically relating to the testimony that we just heard about how difficult it is for the small craft brewers to distribute these things. I was just wondering, I understand the general concept of the GTR system, but I guess why this particular hardship is It's not a hardship. I mean, it was a hardship for that, but why these restrictions exist for such small businesses?

[Tucker Anderson, Legislative Counsel]: That is an incredibly complex and deep question to ask.

[Representative Chea Waters Evans (Ranking Member)]: Okay. Just getting going. We can talk about this another time, but I was just

[Representative Matthew Birong (Chair)]: A forthcoming immersive exercise.

[Representative Chea Waters Evans (Ranking Member)]: Should I narrow my question? What was the

[Representative Matthew Birong (Chair)]: I don't know. Let's let's let him let's just let him go right now for a moment. He was looking for the green books. Uh-huh. That's out respect. That's so awesome. Twenty

[Tucker Anderson, Legislative Counsel]: sixteen, two thousand seventeen, when I started, every single committee room had a copy of Towards Liquor Control in the room, and especially the House General Committee at the time had, in fact, a stack of them, and they used to get passed out to all the members. So my short glib answer is, that Vermont decided to be a liquor control state. And, some of the issues that were being addressed at the time related to organized crime, the illicit alcoholic beverages market, and the desire to not have a fully integrated system of manufacturer distribution, sale, and consumption of alcoholic beverages. And the way that Vermont's system developed over time was confronting issues around inducement of alcoholic beverage consumption, and the full integration of what were formerly, at least during prohibition, criminal enterprises. Over time, that developed into a public safety model that has persisted to this day. There is nothing in the Vermont constitution, definitely nothing in The United States constitution that compels the state to follow this model. It is entirely a policy choice that has persisted since prohibition into the modern era. And there are a ton of really great materials that were produced by Damian Leonard, my predecessor in this particular portfolio, around the time that the title seven rewrite happened, breaking down the three tier system, some of the historical precedent for it, and even providing some charts to show you where in title seven the three tier system is broken out. And I'd be happy to dig all those materials up and send them to you. But hopefully, that's a good, concise, precise, specific, profound answer to the question.

[Representative Chea Waters Evans (Ranking Member)]: Perfect. Thank you. That wasn't that long. And I can dig them up first. And if I have trouble, I'll ask you.

[Tucker Anderson, Legislative Counsel]: I have the wonderful DM machine, the document management machine so I can get all the codes and send them to you.

[Representative Chea Waters Evans (Ranking Member)]: Okay, cool. Thank you. Didn't want to give you more stuff to you. Thank you.

[Representative Matthew Birong (Chair)]: You know, like the presentations that Council has been building for a decade plus now are materials that are complete.

[Tucker Anderson, Legislative Counsel]: And before this lovely, committee room and bathrooms replaced my office,

[Representative Matthew Birong (Chair)]: we had posters The bathrooms, specifically. Yeah.

[Tucker Anderson, Legislative Counsel]: Pre tier presentation. And the former committee rooms also had those posters on the wall. But in the move, they were ripped down and shredded or burned in the parking lot, packed into boxes, and sent down the river.

[Representative Lucy Boyden (Clerk)]: Have made the request to DLL to at least get a poster of the four licenses and what they are in a very concise form. And they are working on it.

[Tucker Anderson, Legislative Counsel]: I will now send you all the charts that I have because I know that previously you asked about fortified wines and I promised I will send you a chart we made for the Senate that breaks out all the various beverages that fall within the fortified wine design and what some of those fortified wines are classified as, if they don't fall within that, which is generally they're all considered spirits if they're not considered fortified wines.

[Representative Lucy Boyden (Clerk)]: Thank you. My intent was to hang the chart on our new bulletin board, but it's getting So quite we may need a third bulletin board.

[Tucker Anderson, Legislative Counsel]: Sorry about that. I typed so fast. It's like, hey.

[Representative Matthew Birong (Chair)]: Third one, working with third tiers, three boards. Something in numeric patterns. So my suggestion perhaps, if we are gonna archive a lot of this sort of, like, existing information, could we perhaps do it in the same way that we have

[Tucker Anderson, Legislative Counsel]: a share folder with Charter work? Absolutely. I'll set up a SharePoint. That sounds like

[Representative Matthew Birong (Chair)]: a great way for us to archive this off for quick and easy access. Yes.

[Tucker Anderson, Legislative Counsel]: Post it under my name for the committee information page so that the public has it as well, if that is what you want. Thank you. That sounds like a bad idea.

[Representative Chea Waters Evans (Ranking Member)]: Just such an interesting, like, philosophical concept to say we are trying to prevent too much of something, but at the same time, like allow more of the same thing.

[Representative Matthew Birong (Chair)]: Marketing, promotion and sale for the revenues of the state and also commerce within our business systems. Yes, that is an interesting balance. Interesting

[Representative Chea Waters Evans (Ranking Member)]: thing about.

[Representative Matthew Birong (Chair)]: With all devices. Right?

[Tucker Anderson, Legislative Counsel]: Yeah. Yeah.

[Representative Matthew Birong (Chair)]: And the the history too, like, why this structure exists once you start mining into it is, pretty fascinating also because you're going through so many different eras of policy, public engagement, public opinion, pro, con, indifferent. Yes. It's really historically kind of mesmerizing, at least for me. Questions for counsel for the words on the page?

[Representative Chea Waters Evans (Ranking Member)]: Yeah. Thank you.

[Representative Matthew Birong (Chair)]: Yeah. I mean, we're definitely gonna have some you know, we're gonna take more testimony on this stuff. I'm definitely understanding as to, like, why these are being proposed. Yeah. So we're gonna we're gonna dive into some history, some as to why with the system, and then we'll take more testimony on this stuff as we build our miscellaneous alcohol bill. Anything further? We got a podcast in the gallery. Something we'll fire away, but you would guess that is your time. If not, we will do a little study all the time before lunch. Thanks. That's a wrap for the