Vermont Legislature SmartTranscripts:

[Rep. Sandra “Sandy” Pinsonault (Member)]: It's not loose,

[Chair Matthew Birong]: guys. Alright. We are live. Alright. Welcome back, everyone. We are gonna pick up, work on the relevant bills to Awesome. The committee's consideration to our miscellaneous omnibus alcohol bill. And first up, we are gonna talk with Ryan Cheafen, the director of operations, Harold Distributing, and Nick Sherman, who's the lobbyist who represents the Wholesale Beverage Association. Gentlemen, how are you? And he will grab you a seat for a duet. You. What's those seats?

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: No samples today. Could have arranged that for sure. No no beer. No soda. Nothing. We have a robust nonalcoholic beer list now that we could have certain.

[Chair Matthew Birong]: Thanks. Hi, everybody. Mr. Chair, members of the committee, thanks for having us. Nick Sherman, I'm with Leone Public Affairs.

[Nick Sherman (Leone Public Affairs; lobbyist for the Vermont Wholesale Beverage Association)]: We represent the Vermont Wholesale Beverage Association, I'll call VWBA from here on out. Here with Ryan. Thanks.

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: Pleasure to be here. Thank you very much. I am, my name is Ryan Cheafen. I am the director of operations at Ferrell Distributing and a member of the Vermont Wholesale Association for over fifteen years. It's an honor to be here and I appreciate the opportunity to, to provide you with some information on what wholesalers do, day to day and how we are an integral part of the Vermont beverage industry. Before I also get into this, I wanted to welcome my colleague Stuart Timmons from Ferrell Distributing and, obviously, the folks from the VBA who I've worked with for over twenty years, actually twenty three years and, of course, the DLL. So thanks for being here. I started in this industry back, in college in Burlington, at the Magic Hat Brewery working on the bottling line, when Alan Newman thought it was a great idea to produce a nine pack, which didn't configure on the shelves. Brilliant idea, but, failed pretty pretty hard. So That is

[Chair Matthew Birong]: the most Newman thing ever. I'm sorry.

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: Twenty five years.

[Chair Matthew Birong]: I really do.

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: Me too. Close personal friend,

[Chair Matthew Birong]: but yes.

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: So twenty five years in the, in the Vermont beverage landscape world, a lot of those years, in in Vermont brewing world. Much of those years spent in leadership and senior leadership roles across the brewery and the wholesale industries, which I do believe puts me in a unique position to be able to speak to all things alcohol in the state of Vermont. I have worked throughout and held great respect for all parties of the three tier system. I also taught two forces at the University of Business of Craft Brewing, in Vermont. I taught wholesale management, and I taught annual business planning, for a lot of young entrepreneurs who are gonna be getting into the brewing space. Farrell is an independent beer distributor, licensed by both federal and state governments to get bottles, cans, cases, and kegs from a brewer or importer to the shelf at stores and local restaurants, and neighborhood bars throughout a safe, transparent, and accountable system. That's a really important part of what we do. There are 3,000 of us, across the country, and there are a handful in the state of Vermont, that we work with alongside and obviously compete with. We serve, over 2,000 licensed beer and wine distributors, but we also work with a lot of non traditional accounts, folks that serve just, you know, Snapple's and sodas and all those types of beverages. Independent beer distributors do more than just buy, store, and deliver beer, and I hope to speak to that a little bit today. We are small business owners, family owned. We are a fourth generation, and our competitors are also also fourth generation. Civic leaders, parents, who are active in their communities, beer distributors add value to, their role in the state based system of alcohol regulation, and we keep communities and citizens safe while encouraging healthy consumption, in a robust marketplace. General adherence to regulations, sanitation, and safety protocols is critical. Other benefits include the broad selection of products consumers can choose from a retail because at the end of the day, we serve our retail partners and we serve our consumers. We don't look like the soda aisle. When you go down the soda aisle or chip aisle, you only have a couple options. When you go down the beer aisle or the wine aisle, there's a there's a there's a lot of options for consumers to choose from, which that's something we're really proud of, specifically when it comes to the Vermont, beverage world. System also ensures that beer is traceable. Sometimes there's, there's there's problems and things have to be brought out of the market. We have systems in place to be able to track that to get it out of the market case it becomes a safety concern, like a recall, which does happen. The regulated distribution system also helps protect American consumers like I just spoke to. And, there has been situations to where we have had to have a recall and we can ensure that everything that's in the market that's not that shouldn't be in the market comes back to our warehouse, for proper disruption. To provide some context, the three share system consists of, suppliers, the the folks who produce beverages at breweries and distilleries, distributors, folks like us who ensure safe passage, to our retail license accounts, and of course the end, part which is the retailer, the bars and the restaurants and supermarkets and the convenience stores where all of us stop in to to purchase our products. Ferrell Distributing was the first licensed distributor in Vermont after prohibition. We've been around a long time. We have been in our South Burlington location since 1980 and we added Rutland many years down the road. Our philosophically remains the same on how we believe, how we treat ourselves every day, which is quality, service, and community. In May 2016, we completed a major renovation project at our South Burlington facility, which I helped oversee, welcoming over 90 new people on a handful of new products, spanning our square footage in South Burlington and, moved to a 90,000 square foot temperature controlled, room, which, something we're also really proud about. When you think of beverage distributors, you might picture delivery trucks and warehouse shelves, but at Farrell Distributing and other distributors, we're proud to show there's much more brewing beneath the surface. At our Rutland facility, we just got we just completed a major overhaul of our refrigeration system. When our Rutland warehouse refrigeration system of coolants was failing, we went ahead and worked with Efficiency Vermont and put in a brand new c o two system, where we just recently, won the energy leadership award, which probably hangs in our warehouse today. Also, the reclaimed heat, piece of that, we actually didn't have to turn our heat on in our warehouse until after Thanksgiving because of all the reclaimed heat. It's pretty incredible. We have over two ninety employees, that live all over Vermont. We touch every county. We touch most towns. Our industry spans from skilled workforce, vehicle maintenance, delivery drivers, sales, and folks that do the merchandising and the load building, building pallets that fit on trucks. We also, regularly offer training opportunities to upscale our employees. On the sales side, we offer a lot of different types of certifications. I hold three or four, Stuart holds three or four. We have over 100 people in our warehouse that are Cicerone certified beer servers and WSET wine professionals, which means that they're really smart at talking about products and they could be consultants to our retailers to make sure that we're putting the right things on the shelves. Temperature controlled space, which I mentioned, daily maintenance to our fleet. We operate two auto, garages, so we handle all of our trucks ourselves to ensure that safety, our drivers are driving a fleet that is is best. And with the cost of managing these operations, it should come up no surprise that consolidation has occurred in our space. Consolidation, has also happened on the brewery side, just because of the pure cost of doing business in our space. Throughout our long history, we've always believed in giving back to our community, something that means a lot to me, and partnering with local organizations to help those in need. I'll quickly tell you what happened, after COVID on Saint Patrick's Day. We had over 7,000 kegs of beer that were going to be going out of code, because of the shutdown. So we quickly worked with a coalition with Citizen Cider, Bar Hill, run amok maple and AquaVike Kombucha, and we turned 7,000 kegs into a full tractor trailer load of hand sanitizer, that we handed out to our retail partners or hospitality partners and folks that needed at the time. In any given world, I would have been fired twice for dumping a quarter million dollars worth of beer and then buying a quarter million dollars back worth of hand sanitizer to hand out. But, during those times, it was important we did that and I worked for an unbelievable organization that encouraged me to do that to make sure that our folks were set.

[Chair Matthew Birong]: And I just wanna say, I remember working with you during that, and it seems like such an insane idea at the time. Yeah. Yeah. But your Lord did do a lot of good in that time. Thanks. Thanks.

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: I I I would encourage you if you find yourselves really bored. We documented it. We called it a spirited response, and,

[Chair Matthew Birong]: we captured that entire process. So it's fun.

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: I'll never do that again.

[Rep. Sandra “Sandy” Pinsonault (Member)]: Uh-huh.

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: We belong to court chambers across the state, needing support, when they need us and engaging to help improve business communities. So, with this overview in mind, I'd like to speak a little bit to the current market, and some challenges that we face, at our tier. We operate in a challenging market. 2025 was a very tough year for everybody in our industry. I've never in my twenty three years seen all categories all down at the same time, beer, wine, spirits, everybody. It was a tough year. Our current population demographics and housing shortages are headwinds. We talk about that all the time. We rely heavily on tourism, riding that wave, season to season, which can make it really hard to forecast. You know, our our inventory team right now is forecasting products for end of the year. We don't really get to enjoy the season of now. I'm currently living in summer in my head, and our inventory team has to be pretty incredibly smart to make sure that millions and millions of dollars of perishable product that sits in a warehouse is is forecasted accurately so, we don't have to dump it down the drain, which we do not like to do. The cost to manage, maintain, and curate a portfolio with hundreds of employees, two large warehouses, massive levels of perishable inventory, insurance and rising health care, all within a rural state that requires a massive fleet to satisfy with margins that are compressed each year and, frankly, margins that haven't changed in in close to twenty years, are are completely out of our control to navigate. So deciding who we partner with is very important, as you can imagine. Our breweries face the same challenges, just on different scales. I know this well, as I have worked and managed a few Vermont breweries. I spent eleven years working for the founder of the Longshore Brewing Company, and I was the general manager of the Fourteen Star Brewing Company, managing a business for three veterans. So I know very well what, managing cost of goods, payroll, and promotions for a very small brewery is like. All of us want to support local manufacturers across multiple segments and categories as sustainably as we can. Vermont has a significantly higher local crappier market share than most states, and we should be very proud of that. I know I am. I also want to be very clear that success is shared amongst all three tiers of the ecosystem we work with, as we are all part of that growth. An economic survey that I conducted years ago for Peter Welch when he was visiting, I did a quick, little, check-in with all of our Vermont manufacturers with at the time, we represent over 45 Vermont businesses. And our port our made in Vermont portfolio represented over 500 Vermont jobs purchased from 500 local breweries, 500 local other operations. So portfolio is powerful, when we curate it properly. It's a small market here across the state. In the grand scheme of things, it's incredibly expensive to operate with them. We can't take every brand. We must make our bets, and those bets are determined by multiple touch points, including how the portfolio fits in, the quality, and the brand's commitment to working with us. Sometimes it's just not a good fit. Are they willing to provide us with appropriate margins? Do they have a quality control department? Do they have a brand roadmap and the financial ability to scale up if the business scales? Do they have a social and digital marketing plan to help generate consumer and retail awareness? Are there ready files for art that we can plug and play when we do promotions? Or are they trying to create a new category? Will they need training on compliance? What is your expectation for year over year business and sales? Do they plan on assisting us with relationships at retail? Have they gone out to introduce themselves into the market to meet the buyers and the managers? Those are all things that are important for us when we partner with the brand. We are stewards of their brands and that's not lost on us. So partnering must feel like we are on the same page. Are we aligned on goals? Do we agree with their forecasts? And can we at the end of the day, say we have a realistic chance of being successful with the business model that they bring to us? And if we're honest with ourselves, which I'd like to think that we are most of the time, most cases have a successful story attached to them. Expansion of a brand bringing their products to retail is a business decision, and a commitment to uphold the same standards wholesalers do is critically important to the system. Our hospitality partners have suffered greatly over the last few years and they need us more than ever and they may need to make sure that we're bringing the right products, at the right time. But that's not it, because local is important to us, but it's not everything when you manage a wholesalers of our size. We must represent some of the most recognized brands in the world, proudly. We have a which by the way all have a local massive impact, Anheuser Busch is one of them. They have consistently spent hundreds of thousands of dollars in the state of Vermont on safe and responsible drinking campaigns, trade dollars to host occasions, events, and bars and restaurants across Vermont, and access for our employees at state fairs and media campaigns, and have been partners with the Burlington marathon for decades. Deutsch winery supported our cancer center. Clean Cause Herbal Mate has provided dozens of safe scholarships for folks that need recovery, and you have Gallo Winery who has been a partner of Burlington Discover Jazz Festival for decades, all which drives economic activity to our to our small state and benefits nonprofits who have appreciated the support. Rising tide, those national brands have done a lot for the state, has helped the local brewing community in a lot of situations. I want to start by saying that we have no major concerns with age six seven two and understand the desire to remove burdens for small brewers. Given the challenges to the market that I've described as we all face, we want small brewers to be successful, and we encourage and support the right to self distribution. We see value in breweries starting off on their own to better understand the market and have direct relationships with retailers. We cannot represent everybody, as those are business decisions we must make. We wish them well and cheer them on even as competitors. But it's important to know that we provide a lot of services, merchandising where we can with our retailers, and we also clean our draft lines on a regular basis to ensure safety. So we would encourage self distributed breweries, to do the same, and if they need help understanding how, we'd be happy to help them. We do think 5,000 barrels is excessive. The national average for a craft brewery is under a thousand barrels. I believe Emma's here. She probably correct me if I'm wrong. You can see that in the Vermont, brewers breakdown that Emma provided, which was very well done. Brewing and selling that much work brewing brewing and selling that much is a lot of work even at a thousand barrels. It just doesn't fit in a Subaru, and I drove a Subaru for a lot of years and I know it won't fit. At that smaller level, you are starting to get into real logistics with big capital and that's when we typically see opportunities to partner with smaller brands. There are many years when folks went right to distribution, meaning they started brewing their beer and they wanted to get it right to market, and there are years where more we wanted to kind of self distribute. Both are okay, and both work. Starting a business is risky, and it's not a guarantee that anyone will secure distribution. Just as it's not a guarantee that if we partner, we will be mutually successful. There are many factors that lead to all three tiers being successful with a brand. In general, we already have a framework where small breweries can distribute, and we have no intention of getting in the way of it. Whether you decide to allow them to skip the current process of establishing a separate business, that's great. We just ask that they understand all the rules and regulations under title seven. We also ask that it be clarified that the exemption applies only to eligible brewers who are not under contract with a distributor. It is our understanding that is the intent and we would like to make sure that's spelled out in the law. Being a large employer in Vermont comes with many challenges. You can hear all about them all day here, I'm sure, As we feel them all as a statewide organization that needs people and equipment. We're not an industry where AI or automatization can replace people. It may create efficiencies and those are something that certainly we work hard at and those are important, but we need a strong Vermont workforce. We are proud to have hundreds of folks here at Farrell Distributing doing their part in so many ways that participate in the opportunities that the state provides, but as importantly, and resources for the challenges we face, and we intend to stay engaged in those as you all make important decisions where the state is getting. Our doors will always be open to new opportunities from small breweries to large and entrepreneurs in this space, but as you can see, it requires planning and strategic direction, to succeed. At Farrell Distributing, we provide high quality beer, wine, and non alcoholic beverages, and also snacks as of recently to retailers throughout the Green Mountain State, as our competitors do. When you operate in a very rural market, it's important that your portfolio is wide and that you have the ability to put things on trucks that normally you wouldn't. So we also sell Cabot popcorn. We just recently launched Nathan Beef Stick Jerky Bites, which is really exciting. It was perfect with beer. As mentioned with facilities in South Burlington and a large workforce, we are equally equipped to serve the needs of retailers of all sizes from national corporations to large and small independent stores to dining establishments big and small. We are pleased to bring variety and value and choice to our customers regardless of their location and size. So to close, the core strength of our organization is our incredible community of teammates. Their hard work and dedication in serving our customers is what is what makes us successful. As an employer, we are dedicated to their well-being, creating a welcoming workspace, fostering a sense of family. We are not just a warehouse that provides logistics to get beer, wine, and other products to shelves. We are a full service business that serves our retailers as a consultant, as a service provider to our partners. Our partners being our breweries and our wineries and cideries and beef stick jerky, kind of popcorn.

[Chair Matthew Birong]: Nothing like a salty beef stick to go with beer. It's a classic combination. Yeah. So no, thank you for that for that Ryan very much. And so, you know, a lot of the conversation, especially around the bill for self distribution is a recognition of consolidation of distributors and also some no longer operating, right? So, you referenced the fleet that your organization has on the road. How many trucks do you operate roughly on

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: a daily basis? Yeah. So our fleet, is probably in the ballpark. We probably have 70 trailers on our lot. We operate, somewhere in the ballpark of 40 routes every single day. That goes up and down depending on the season. We recently went through the first operational and route to market change the company has done since prohibition, because of the fact that the market is, is at the moment a little compressed. So when you think of distributors, you think of ordering today and you get your product tomorrow. We have to change our model to more of a forty eight hour model, meaning there's a little bit of a lag, which gives our warehouse team, more time to plan and prep. We used to have a night crew that would come in at, 02:00 in the afternoon and leave at three or 04:00 in the morning. That's a really hard shift. It's hard to hire for that shift. It's not pleasant. And a lot of mistakes are made, when you're working under those conditions. So we blew up our whole model to make sure that all of our employees are working during the day to make sure that there's leadership on the floor, and to make sure that there's foremans out with our drivers, insurance safety, making sure that we're doing the right thing. So it was a huge undertaking, six months in the making, and it's it's gone very well. And, I think everybody's quite happy with it. But, to answer your question in the the longest way possible, if you have anywhere

[Chair Matthew Birong]: I expect nothing less. Fair enough.

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: Could see anywhere between, thirty and forty, Farrell distributing, tractor trailers and rigs going up and down the road servicing all of our partners. Yeah.

[Chair Matthew Birong]: I was just curious about the, like so 70 plus minus total with our daily operational outflow, 30 to 40. So you're saying

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: Yeah. So in our warehouse meeting Awesome. It is. So sit so sitting here as, as I'm sitting in this comfortable chair, we have 50 folks in our warehouse in Burlington, moving product and fulfilling shelves and filling orders for tomorrow. And and then Rutland, we probably have another 20. And we have, right now probably 50 drivers on the road going up and down the streets, carrying heavy product and making sure that our retailers are are are set for the, coming up on the weekend business, ski resorts specifically too. And a 100 sales reps by the way too, driving around in priuses all over the state.

[Chair Matthew Birong]: So as we were talking about the self distribution thresholds, know, 5,000 barrels, what's in the bill? When you're looking at taking on a client for distribution, a contract, does your organization have sort of like a production number that you take a look at as a target?

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: The answer to your question, no. Okay. No, we don't. I think it really depends on where we are as a business at the time. How does that partner or potential brand partner fit into the portfolio? No, we probably sell, we probably sell a 100 different IPAs at the very given moment. If a brewery partner wants to come and offer us 12 more, it might not be the best fit for us. It might not be the best fit for them. Do they make something a little unique? Do we have category that's underrepresented? So it's not so much for us at a number that you have to provide this much revenue or we can't have a discussion. No, that's not accurate. We have partners that are that are at the smallest level you can possibly imagine. It really is sometimes it's about timing. Is it the right time to partner with a new brand? Do we have the ability to add that into our system? Is there is there room on the floor? Do we have do we have capital to increase inventory? There's a whole plethora of things that have to go

[Chair Matthew Birong]: in that discussion. Yeah. I like your reference to like portfolio balance for like

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: products. Sure. Yeah. Do we want to represent, would we like to represent every single Vermont manufacturer to be good stewards? Of course, but it's just not feasible. We have to make sure that we have a well balanced portfolio across all tiers. Again, we represent, some of the largest, most recognized brands in the world, and they have a rightful home to be in market to.

[Chair Matthew Birong]: Might have referenced this, but that was a a lot of content. I do have a just because we're very focused on beer right now. How many Vermont producers are you currently warehousing, distributing ish?

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: On the on the beer side, we're currently working with.

[Chair Matthew Birong]: Could you just, like, state your name and organization for the record? Super Timmons, Director of Business Development. Oh, it's 15? It's 15 currently.

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: On the beer side? The side. Yep. No. Cool. Handful of cideries. Used to work with a great media meatery that's no longer here, but total total made in Vermont portfolio was probably crusting around $40.45 grand, 12 to $1,500

[Chair Matthew Birong]: I'm ball hogging the q and a here.

[Rep. Sandra “Sandy” Pinsonault (Member)]: Brett, that's all. What do you think is the contributing factor to the Dell sales slowness or

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: the Just the general market correction. Yeah. I think it's a lot of things. I can't pinpoint one. I think there's just a change change in in consumer behavior in the younger generation, which is okay. There's certainly a change in the way that people are socializing. People are definitely not going out as much. I just think people are being more thoughtful about what they do, what they choose to do. I think there's a there's a piece of it that's also financial. There's still there's still quite a bit of of alcohol being sold. And I think you have to kind of separate the fact that, you know, COVID was a was kind of a benchmark that, you know, that was a that was a real rising tide and we're kind of starting to find what the new normal is for our business. And as we navigate that, you know, as a large employer, we have to figure out ways to stay sustainable long term. And that might mean, you know, maybe offering less services or maybe we have to consolidate some roles internally. But I think at some point here, I think in 2026, and, I know this is recorded, so I hate to go on record for this one. But I I do think that at some point this year, will find kind of what the new normal is. Let's get into the new normal consumption.

[Chair Matthew Birong]: Hands for these. No one. Anything else? Thank you very much for your time, sir. It's good to see you back in the chair. Thank you, Nick. Thanks to be here.

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: Appreciate everybody. Thank you. Always here for anything. Oh, certainly.

[Chair Matthew Birong]: Yeah. And obviously daily, if you have questions, he's fine.

[Ryan Chaffin (Farrell Distributing, Director of Operations)]: Yeah. Bother him.

[Chair Matthew Birong]: You're paying good money. I Your words. Okay. So up next, we have Mary-ele Matthews, who is a, of the public health consulting. And, we just invited her in as we're taking up further discussion on alcohol policy, to come in and have a conversation with us from her perspective. How are you?

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: I'm good, how are you?

[Chair Matthew Birong]: Wonderful, thank you. Thanks for joining us. We appreciate the, I know it was short timeline on the outreach, so thank you for making your time available to us.

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: Absolutely. Thank you for the invitation.

[Chair Matthew Birong]: So, yeah, no, the table is yours. Please feel free.

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: Great. Thank you. So, yeah, thank you so much for those comments already. That was very informative for me. My name is Mary Elle Matthews. I use she, her, they, them pronouns, and I'm here to offer some comments on the protection of public health, best practices for protection of public health in relation to alcohol and some of the bills that are in front of the committee this morning. I work in public health and my focus is on the subfield of health behavior, which is different from behavioral health. Health behavior is essentially the science of health related decision making. I've spent several years working with health departments, law enforcement and community organizations across the country around public health policies related to specifically aid restricted substances or items such as alcohol, tobacco, cannabis lottery, etcetera. I work at the local level now and have previously worked at the national level, including for a national consultancy with the state of Vermont as a client. And I help to guide the state in the process of on the ground data collection of built environment factors that affect health outcomes in Vermont, including for factors that affect population level risk for substance use disorders. My full time role is with the Winooski Partnership for Prevention, an organization that works to prevent substance use disorders in the community. And that is where representative Kate Nugent is an executive director and when she's not legislating. However, today I'm here in personal capacity, not representing any organization just as a Vermonter who is connected to this topic, and I am volunteering my time. But if you have further questions on these comments, you can always reach out

[Rep. Lucy Boyden (Clerk)]: to me

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: at matthewspublichealthconsultinggmail dot com. I want to offer appreciation for both the committee members and the alcohol industry members for their insights today. I am someone who consumes alcohol and I'm protected by many of the current regulations that are in place, some of which were described by the industry representatives here today. That is something that often goes unrecognized as many interventions do. But honestly, the comments that I heard today describe public health interventions, many of which are working, especially the comments about being part of the workforce that implements recalls when those are necessary, cleans draft lines, etcetera. I really want to offer sincere appreciation for those interventions from a consumer's perspective. So maybe I am part of this new consumer group, am a consumer who's walking that line of monitoring my health and trying my hardest to maintain my health and occasionally consuming alcohol. However, I know from my public health background that what matters most more than my internal attributes or motivations or intent are the environmental factors around me that are predictive of both my behaviors and my health outcomes. So given that, I wanna offer some comments on the bills in front of you and I'll go in from the lowest number bill title to the highest. So starting with H647, subsection two two four on fourth class licenses. I have some comments on tastings, I'm not sure if I'm allowed to ask questions during these comments, but I would love to ask questions if I can to make sure I

[Chair Matthew Birong]: Feel free. Yeah. Yeah.

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: Okay. So first, my reading of the current regulations is that, the tastings that are referred to in this bill are free tastings. Is that correct? There's no money exchanged.

[Chair Matthew Birong]: Yes. The tasting implies that it is yeah. Free.

[Rep. Lucy Boyden (Clerk)]: Okay. Got it.

[Chair Matthew Birong]: Oh, no. No. Sorry. Sorry. That I was stuck in an event thing. Sorry. Sorry. Sorry. Well, look at me. With me.

[Brandon Sanderson (Legislative Counsel)]: With or without charge is the phrase used in statute.

[Chair Matthew Birong]: I know. A charge. Did you catch that with or without charge?

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: I know. Yes. And that is the tricky part with or without charge. Yeah. Can you give me some examples of with charge?

[Rep. Lucy Boyden (Clerk)]: With charge tastings. Yeah.

[Chair Matthew Birong]: So there is let me pull this up. So there are thresholds for different sampling cores where you like to take out that one?

[Rep. Lucy Boyden (Clerk)]: Like you go to a winery and they charge $15 for a sampling of

[Chair Matthew Birong]: the amount of products. So like a flight?

[Unidentified Committee Member]: Yeah, flight.

[Chair Matthew Birong]: Yeah,

[Rep. Lucy Boyden (Clerk)]: you go to a farmer's market and they might bore you a sample of what they're selling and that is with no charge. Okay,

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: so there's another chapter of regulations on flights specifically, and it looks like farmer's markets as a category are getting added specifically for fourth class licenses. So I think that helps clarify that it like it could be either of these things that it's not necessarily totally without charge. Next, I would love to check my understanding of the existing regulations around tastings that the current limits are two ounces of wine, beer, or ready to drink spirits with a total of eight ounces per person for a tasting that's current and that one quarter of an an ounce of spirits or fortified wines per person up to one total ounce for a tasting per person is what is currently permitted. Is that correct?

[Chair Matthew Birong]: And that is six four seven. Yes. Yes.

[Rep. Lucy Boyden (Clerk)]: Our legislative council is not eggs. And

[Chair Matthew Birong]: now I've got the I have the text in front of me now. Yep.

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: Yep. So I'm looking to I was checking those because I'm looking to parse out like how much does this increase the amount that is permitted And what are the regulations around paying or not paying? So anyways, I think that is helpful. And I'll give some comments on what I see in this bill. So specific to $6.47, if these tastings are free, the real cost per drink in Vermont, to taxpayers is $2.33 per drink in health expenditures alone. So that I would offer should be factored in into the considerations for free drinks. That that cost is gonna be paid by the taxpayers if it's not paid by the people who are purchasing drinks.

[Chair Matthew Birong]: And that and that is for what is put out in our general health care system for long term impacts for alcohol consumption? Is that what you're saying?

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: Chronic and acute health care. Okay. Yep. Not including road impacts. So my general comments are that free alcohol should be limited. Eight ounces for tasting at varied ABVs, alcohol by volumes at a farmer's market seems high to me. I would prefer if that tasting limit be set in US standard drinks and that money be required for tastings that are over five ounces. Consider that a standard drink of a 5% ABV beer is 12 ounces, a 7% beer is eight ounces, so you're already giving theoretically a free 7%, one standard drink to someone. An 11% wine is five ounces and a 15% ready to drink cocktail, that standard US drink is four ounces. That's a really high ABV, but there are RTDs that are at that ABV. So at that ABV, you're potentially serving more than one free drink at a farmer's market. Public health best practices to not serve any alcohol without exchange for money for several reasons, But knowing that there is public interest and business interest in having tastings, think you can find a compromise that doesn't endanger public health. I have the same concerns for the other tasting venues that's listed by venue in this bill. In part B 16 ounces might be appropriate if it's a light beer, but otherwise I think you would wanna keep a tasting to no more than half of a standard drink. 12 ounces of wine is more than two standard drinks, 12 ounces of a RTD cocktail, which is what's listed in the bill depending on the ABV could be up to three standard drinks. Again, that seems very high to be serving somebody for free. In subsection two seventy one, I don't have any comment, but I do have a curiosity on how this would affect compliance checks for DLL, in particular under her by efforts and responsible serving trainings for staff. So those are just two considerations that I don't have specific questions on just things to think about if you do have DLL staff who come in to comment on this bill. And that is all I have on that bill. And I'd like to move on to the next, but pause here to see if there are any questions.

[Chair Matthew Birong]: Any questions for us? Okay. All

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: right, so moving on to H655. So this one, my comment is on the proposal removing the time restrictions for alcohol sales and I'm guessing the committee may be aware that this could affect crime rates. I'm not clear on what the hours of permitted sale would be if you're suggesting or if you're suggesting that by removing those, those would be up to the retailer. When considering the intersection of alcohol and crime, hours of sale restrictions are actually the most effective intervention in reducing crime. If we want to control state and municipal costs for law enforcement, emergency response and incarceration, I would urge the committee to maintain hours of sale restrictions or even go in the direction of implementing tighter hours of sale for both on premise and off premise sale, particularly late night sales. From a public health perspective, we see increases of crime for both on premise and off premise types of establishments, off premise sales tend to have stronger associations with crimes committed in private, such as sexual violence, homicide and child abuse. Off premise sales are also typically how underage folks gain access to alcohol, not to say that they are making the purchase, but it enters their community, their living situation through off premise sales. As one study in 2024 in Baltimore, Maryland that was specific to reducing service hours for on premise consumption, so different from what is listed in this bill, They were due service hours from last call of 2AM to a last call of 10PM. And they found a 51% immediate drop in homicides in the surrounding area in the first month, followed by a 23% decline in all violent crimes in the surrounding area in the following year. Homicide rates continue to drop by 40% in the year that followed as well. This is notable, and I'm giving this example because there's actually more service control at on premise sites than off premise. So increasing hours of sale for off premise is something that I would urge the committee to be very cautious about.

[Chair Matthew Birong]: I got a hand up for representative Boyden.

[Rep. Lucy Boyden (Clerk)]: I just wanna clarify that we do have hours of sale depending on the specific license type. So here, it's just more of a technical correction to tie that back to the license type.

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: I see. So the retail, what would be the new retail sales restriction then?

[Rep. Lucy Boyden (Clerk)]: Believe can, yep.

[Brandon Sanderson (Legislative Counsel)]: Council, I'm Brandon Sanderson, Legislative Council. It would be governed by seven BSA section 62 for the hours of sale for first or first and third class licenses would be 8AM to 2AM. Those are your restaurants and bars that are requiring this permit under seven BSA Section 30 for second class licensees 6AM to midnight, and for fourth class licensees also 6AM to midnight. The elimination of the titer hours in seven BSA two thirty are specific to that permit, and if you recall during the walkthrough, I highlighted that there were tighter hours put around that permit because this was a temporary provision tied to the COVID response that was extended for a period of two or three years. And now that it is codified, the recommendation in page six fifty five is to just rely on the underlying license restrictions for hours of sale.

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: Got it. Thank you for that clarification.

[Chair Matthew Birong]: Thank you, Council. Sorry for being slow. That's quite alright.

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: So moving on to H67, I have no comment. On H832 subsection two twenty four, again, there's that mention of selling products without charge. I am wondering if that might mean on credit that it's not a mechanism for free alcohol to flow, but same considerations as before if it is, and then on subsection two twenty five, I would encourage the committee to ensure that there's enough time for any special training to happen, the approval period here is one day which seems rather short, special events can be an instance where consistent carding is more difficult, so that's just one thing to consider that there's, there has been special training for special events and I realize that this is a different type of permit, but just one more thing to consider. And that concludes my comments. So thank you so much for the time. And again, if you have questions, I'm happy to take any questions.

[Chair Matthew Birong]: Some of the reports and the studies that you were referencing, could you possibly share like, know, like the reports themselves or like the sections that you were referencing, probably preferably the sections you were referencing. And so, we can have those two As a resource. As we continue talking about this. Absolutely. Any other questions. Alright, well, you so much for your time and your perspective, it really is valuable.

[Mary Elle Matthews (Public Health Consultant; Winooski Partnership for Prevention employee speaking personally)]: Thank you.

[Chair Matthew Birong]: Alright, so, lastly, mister Tucker Anderson, legislative counsel. And the conversation right now, we've we've identified, like, four bills right now for for their conversation as we built this omnibus bill. So that's kind of how I want to spend the next couple of minutes before lunch is just, in fact, having introductions, walkthrough, and testimony to a degree, we'll definitely have further conversation on this stuff, but I want to have this conversation as to the components with folks. I guess what we'll do is kind of maybe just go one by one. And so, we'll start off with the six forty seven. And this is the one that we were just talking about, where that's using your retail shops, farmers markets, citations and stuff. So it's kind of like a formally informal open conversation here. That's from members.

[Rep. Sandra “Sandy” Pinsonault (Member)]: I guess, please, yes. When it comes to a farmer's market, you go to one distributor, and you sample a large, large, cider, and then you go few feet away, try another, are you cutting another 16oz? There's no policing of how much you can still be making one visit to the farm as my people.

[Chair Matthew Birong]: Representative Boyden, feel free.

[Rep. Lucy Boyden (Clerk)]: Tucker, can you clarify Section one, two, and three, that's only for a retail shop, or does it also relate to farmer's markets? I think that would clarify. Another

[Rep. Sandra “Sandy” Pinsonault (Member)]: eight ounces. You can only have eight ounces at a farmer's market with one venue, but you can still get eight ounces, eight ounces, eight ounces, depending on how many farmers or brewers where they are on display.

[Chair Matthew Birong]: Yeah, so you're talking about the individual setups at the farmer's market and how do they oversee that?

[Rep. Sandra “Sandy” Pinsonault (Member)]: Right. Well, just for, I know as a past server, another life, we would have wine tastings from different distributors that would come to me and we would be sampling and sampling, and before the evening or the afternoon was over, there'd be some intoxicated service.

[Chair Matthew Birong]: Then they were doing it wrong.

[Rep. Sandra “Sandy” Pinsonault (Member)]: They would sample But there was nobody to police that, there was nobody But I'm just saying, if you go to a farmer's market, who's to say that you can't go around and have seven, eight ounces of chicken? You go around, and you come back, you

[Chair Matthew Birong]: have a different

[Rep. Sandra “Sandy” Pinsonault (Member)]: I don't know, just curious as to who would be monitoring that behavior of that one individual that would not

[Chair Matthew Birong]: be doing it the way they should be doing it. That's valid question.

[Brandon Sanderson (Legislative Counsel)]: I'll start from the beginning, the structural questions about the way that this section is written. Representative Boyden, to answer your question, these are issued for locations and the limitations that are put there are on the distribution of the samples by the licensee. So there could arise a situation where an individual consumer goes to multiple different locations and could be distributed the maximum allowable volume under this statute. However, these are all licensees that have training and education requirements built into statute that have to be certified by DLL. They are serving alcoholic beverages. So these are servers that are covered by the education requirements in Title VII. So it would be the same place of last drink dram shop issues that arise for all sorts of licensees under state law. So it's not an isolated issue or concern that is specific to farmers markets. I would also note that under the structure of H. Six forty seven, the current limitations stay in place for farmers markets. So farmers markets are already covered here and the volume limitations are the same as under current law. The expansion, larger volumes are for tasting room and retail shop locations, which are controlled by an individual licensee under the four corners of this bill.

[Chair Matthew Birong]: Thank you for that counsel. Any other questions on this from the committee? And again, still plenty of work to be done in testimony on this as we build this thing, but this is a little bit more of a cerebral post testimony look at this stuff.

[Brandon Sanderson (Legislative Counsel)]: I always offer in the context of this that it is helpful to go back to the beverage purity definitions that Vermont has in Title VII. Some of the maximum alcohol by volume limitations that were brought up in the previous testimony don't square with the definitions of the beverages themselves. So, for example, there's a 12% limitation on ready to drink spirits beverages. Otherwise, they fall out of that beverage category and are considered spirits and would fall under the lower service volume in this bill. Similarly, there are maximum alcohol by volume limitations for all of the beverage categories. And by that other lower spirits, that's the sort of the like vermouth and port things of that nature. Talking about the fortified wines and all vermouths being considered fortified wines, yes. But each one of the beverage categories, malt, viners, ready to drink spirits, fortified wines and spirits all have minimum and maximum alcoholic content caps.

[Chair Matthew Birong]: So for this, if it is, I guess, well, my question is, are we finding it agreeable to include this in the omnibus bill for now for further discussion and consideration? Seeing no objections. Next up, $6.55. And yeah. Any questions on this one? You look like you almost have a question. No, no. Just checking in. Was just trying to read the body language.

[Rep. Sandra “Sandy” Pinsonault (Member)]: No, just going from a top for a cat of to the license to

[Chair Matthew Birong]: a to a No. I'm good. Is the committee comfortable moving forward with 655 for inclusion with the omnibus. Seeing no objections. Alright. 672 is the one that's been a little bit more of a conversation piece, although it is short on words, it's long on opinions. Yeah. And I think the the obviously, I mean, the biggest consideration is we do move forward with this. What is the what is the barrel number look like? Right? Right, hango.

[Rep. Lisa Hango (Vice Chair)]: So, it was powerful testimony to have a distributor support this, but I do want to take heed to the maximum number of barrels that was flagged by the distributor as being potentially more than a microbrewer can even produce. So, why this high number in the bill?

[Chair Matthew Birong]: Rep Yeah. Coffin, Rep Morgan, Rep Nugent.

[Unidentified Committee Member]: I was gonna say the same thing about that, about the high number because during testimony that we took, I did ask about, is this even achievable? Is this something that would happen? And in the testimony, it was said, no. I they physically couldn't produce that in that small area or space without bringing their own floors down. So there needs to be that thought. There would be that's exponential growth for a decade or they could reach that. And at that point, they would need a distributor.

[Chair Matthew Birong]: So that was just piling on. Think I think what he said was a thousand. Didn't he? Did I hear that from him? I mean, yeah, there's yeah, there's been a bunch of different networks floating around, but I think like that was all I was spoken to in previous tests. Yeah. Yeah. So just food for thought. Yeah.

[Rep. Sandra “Sandy” Pinsonault (Member)]: Yeah. That's what I have here.

[Unidentified Committee Member]: Kind of similar, that was helpful to hear from the distributors about the consulting and services that they offer for their manufacturers and considering the total number of barrels, and also understanding that the small breweries need some assistance. It seems like that number is going to be helpful to arrive at.

[Chair Matthew Birong]: Somebody with a lot of years in restaurant cleaning assistance was really nice. Was funky taglines do bad things. Yeah. Obviously, a flag within the bill for further testimony, but is everybody amenable to this bill's inclusion moving forward?

[Unidentified Committee Member]: Yeah.

[Chair Matthew Birong]: And a 32. This is the one about bringing up the permits threshold.

[Rep. Lucy Boyden (Clerk)]: I hear more testimony.

[Chair Matthew Birong]: Yes, for sure. Rep. Hango?

[Rep. Lisa Hango (Vice Chair)]: I just remember really

[Chair Matthew Birong]: having

[Rep. Lisa Hango (Vice Chair)]: a lot of discussion about the number of locations, the number of permits, and this is going back seven years at least. And so just to change it, I think I'm with Ralph Boyden that I'd like to continue to hear a little bit more about it. I know we put a lot of blood, sweat, and tears into this in the beginning when

[Rep. Sandra “Sandy” Pinsonault (Member)]: it was even turned five. Yes.

[Chair Matthew Birong]: God, I am absolutely of the same mindset that the rest of the, we do choose to include it. A lot more conversation around that is a very notable increase in the allowable.

[Rep. Lucy Boyden (Clerk)]: I do feel okay with section two, but adjusting it to it was supposed to be one business day, not just one day. From my understanding, it's practice that the DLL was able to

[Chair Matthew Birong]: In fiscal February? Yep.

[Rep. Sandra “Sandy” Pinsonault (Member)]: Okay. We could have them speak to that, too. Sounds good.

[Chair Matthew Birong]: I guess for the purpose of this exercise, does the committee want to include this for further testimony?

[Unidentified Committee Member]: Are we hearing more testimony about it as a bill on its own before we decide to include it in the omnibus bill or are we choosing to include it in your participant?

[Chair Matthew Birong]: The latter, yes. Right now, we're identifying the bills to just build into one format.

[Unidentified Committee Member]: Yeah.

[Chair Matthew Birong]: Instead of having ice pieces floating around.

[Unidentified Committee Member]: I wasn't sure if we were still signing, if we were even going to.

[Chair Matthew Birong]: Well, we're doing that, and we get to have that conversation, whether it's it an audiobook, that's the core. Okay. Yes.

[Rep. Sandra “Sandy” Pinsonault (Member)]: Can you refresh my memory as to why they wanted to go from five days to ten? Request permit?

[Chair Matthew Birong]: Off the top of my head, I don't recall the background of the request.

[Rep. Lucy Boyden (Clerk)]: I believe it was for short notice scheduling of if there is availability for a casing to take place, and they can submit the DLL, and the DLL would be able to turn that around quickly.

[Rep. Lisa Hango (Vice Chair)]: Building on that, it was with respect to if there were a cancellation in a schedule, I believe, like if somebody was lined up to have a tasting and then dropped out and there was an opening, that another entity could come in and have a really quick turnaround of be granted a permit to step into that. Like for instance, the event that was held at Capitol Plaza last night, if they wanted to fill the room, if certain people dropped out maybe because of the weather or whatever, they could have had more people there if there had been alcohol groups, there weren't. Does that help you?

[Rep. Sandra “Sandy” Pinsonault (Member)]: It does, but there are certain permits required by the town clerk to also authorize the town. So I think on a Friday when a lot of town clerk's offices aren't closed and they find out that so and so is not going to be there is a provision that allows them to still get I don't know if it's a bad thing. It's just take the step Just saying to do so. There's it's more than just the liquid that's right. It's always another step at the municipal level. So if we get twenty four hours It's a business day, right? Yeah.

[Rep. Lucy Boyden (Clerk)]: I don't know about the connection to the town here, but the language is supposed to be one business day. So if you can talk about whether it be one, two, three business days. But I think it's important that it is a business day, so that way

[Rep. Sandra “Sandy” Pinsonault (Member)]: Right. I'm just saying that case of a cancellation, it is a Friday, and they can't I would hate them not to be able to get the license because the town clerk's office is supposed to get a group.

[Rep. Lisa Hango (Vice Chair)]: Maybe we can hear from the BLL about what would happen in that case if the town clerk were closed and the vendor couldn't get a local license from a municipality because the town clerk is closed. How would this affect that?

[Brandon Sanderson (Legislative Counsel)]: Council? I would just offer that I don't believe seven BSA two fifty five requires approval of the local control commissioners. In fact, they're not mentioned at all from my eyeballs. Two fifty five.

[Rep. Lucy Boyden (Clerk)]: I think you're thinking of a different,

[Rep. Sandra “Sandy” Pinsonault (Member)]: different license. Well, another caterer is that. Yes,

[Rep. Lucy Boyden (Clerk)]: it could be.

[Rep. Lisa Hango (Vice Chair)]: The actual manufacturer, right?

[Brandon Sanderson (Legislative Counsel)]: There are quite a few licenses and permits that require approval of the local control commissioners and in fact in H655 that you just went through, there's some cleanup related to making sure that there are consistent references and a few well, in one section to approval of the local control commissioners. But not all of the DLL licenses and permits require approvals.

[Rep. Sandra “Sandy” Pinsonault (Member)]: Okay, just wanted to make sure that it was kept by somebody from being able do it.

[Chair Matthew Birong]: Yeah, know this chunk of statute is not short on complexities. Yeah. But back to the original purpose of this conversation, do we want to continue discussion on that on each E32? Yeah,

[Rep. Lucy Boyden (Clerk)]: at least hear more from industry folks. I also have I want to hear more about section one subsection two, striking up no more than five additional and replacing it with any Vermont with that as farmers' issues.

[Brandon Sanderson (Legislative Counsel)]: Happy to briefly respond to that, because I know it was released in the past. Don't believe you're going to run into Commerce Clause issues with that specific change because, the manufacturers that are licensed and have their physical spaces under this permit are all Vermont manufacturers that have this licensee.

[Chair Matthew Birong]: I see. Okay. Vermont manufacturers.

[Brandon Sanderson (Legislative Counsel)]: Because the business entities. Right? And perhaps this will be clarified just to state that any holder of a manufacturer or rectifier's license that has this specific fourth class license is referred to any licensee under this section to clarify that and eliminate any concerns about grand home. We haven't done that exercise in a while, have we? Grand home exercise? Yes. It's been at least a year. Really? Seems like longer.

[Rep. Sandra “Sandy” Pinsonault (Member)]: It's what you wish for.

[Chair Matthew Birong]: God, I'm going back to the time where for our first conversations on that one. That was

[Brandon Sanderson (Legislative Counsel)]: there was once a world where there was no commerce clause issues for the states and their alcoholic beverage regulations. What was it like to live in The US in February, early two thousands? Playing too many video games at the time and not reading enough supreme court jurisprudence on the subject. Put you up to speed now. You can try.

[Chair Matthew Birong]: All right. So, the deem worthy of further testimony and consideration. All right. Any other questions from the committee before we get to lunch hour on any of this, conversations in around the alcohol policy? Once, twice, no hands, lunchtime. All right. No, thank you, everyone. That was two drastically different buckets So, of subject matter thank you for all of that. Thank you, Council. Thank you to all of our guests in the gallery, stakeholders present, and virtually, we'll get back to the work at 1PM, and we're gonna, have some guests joining us, in and around the realm of food security and federal funding. So until 1PM, please take us off, sir.