Statement on the Death of ABL Executive Director Harry G. Wiles

Bethesda, MD – August 19, 2010 – American Beverage Licensees announces with profound sadness and regret that Harry G. Wiles passed away unexpectedly on Wednesday, August 18, 2010. Harry was ABL’s Executive Director and a leading member of the beverage alcohol community. He will be remembered as a true advocate for the entire industry and a loyal friend to those whose lives he touched.

Harry served as ABL’s Executive Director since 2002. He was chosen to lead the association and its nearly 20,000 members following its creation after the merger of the National Association of Beverage Retailers and the National Licensed Beverage Association. Under his leadership, ABL grew in scope and strength as he oversaw the partnering of on-premise and off-premise beverage licensees into a single, unified voice for the beverage retail community.

“Not only has our industry lost a leading advocate, we all have lost a dear friend,” said ABL President David Jabour. “Harry was the consummate industry ambassador and steward, and will be remembered for years to come. He was truly part of our industry family.”

An attorney and member of the Bar in the State of Kansas, the District of Columbia, and the United States Supreme Court, Harry followed his political instincts from Kansas to Washington, D.C. in 1976, where he worked on Capitol Hill before becoming a fixture in the beverage alcohol community.

Harry’s more than two decades of service to the industry began in 1987 when he became Senior Vice President of Federal Government Relations & Senior Counsel for the Wine & Spirits Wholesalers of America, a position he held for thirteen years.

In 2010, Harry was inducted into the Sky Ranch Hall of Fame, and served on the Executive Committee of the Sky Ranch Foundation. He also served as a board member of the Responsible Hospitality Institute (RHI), the Responsible Retailing Forum (RRF) and the Night Club & Bar Advisory Board.

An avid supporter of the western lifestyle and horseback riding, Harry was a member of western riding organizations Rancheros Visitadores, based in Santa Barbara, CA, and El Viaje De Portola in San Juan Capistrano, CA. He was also a board member of the Heartland Alliance of America, the association for rural Americans.

Harry is survived by his wife Cindy; his daughter Heather and husband, Troy Valerius; and four grandsons. Please keep them in your thoughts and prayers. Condolences may be sent to Harry’s wife Cindy Wiles at 10890 Woodleaf Lane, Great Falls, VA 22066. A remembrance gathering in honor of Harry will take place at a future date with details to follow.

 In lieu of flowers, the family requests that memorial contributions in Harry's memory be sent to “Cowboy Heritage Association of Fort Worth” P.O. Box 136639 , Forth Worth, TX 76136; or “Sky Ranch for Boys” 10100 Sky Ranch Place , Sky Ranch, SD 57724. A celebration of Harry's life will take place at a future date with details to follow.

Harry G. Wiles – Memorial Contributions UPDATE

As part of its facility, Sky Ranch for Boys maintains stables for horseback riding as part of the recreational component of its corrective thinking approach to treatment. Sky Ranch requires all boys to work on the Ranch, including taking care of the horses.

As many of you know, Harry was actively involved and a staunch supporter of both the western horseback riding lifestyle and Sky Ranch for Boys.

With that in mind, President Ralph Aguera and Secretary Barry Becton of the Sky Ranch Foundation have notified ABL that all memorial contributions to Sky Ranch for Boys in memory of Harry G. Wiles will be designated for improving the stables and acquiring new horses and saddles for the Ranch.

A true cowboy at heart, we know that Harry would be moved by this gesture.

Gifts should be payable to Sky Ranch Foundation and mailed to:

Harry Wiles Memorial c/o
Sky Ranch Foundation
P.O. Box 8420
Fredericksburg, VA 22408

Each gift will be acknowledged to the contributor and to the Wiles family.

Privitization is an issue for importers.  If you click on this "issue" highlight you will see an interesting analysis by the trade association for control state administrators, NABCA.  On August 5 the Washington Post published a current assessment of the political and budgetary factors that impact on Virginia.  Virginia controls spirits sales through over 300 retail stores.  Replacing the revenue stream generated by this system, roughly $250M per year, remains one of the fundamental constraints facing the Governor.

In a follow on story the Washington Post provides additional overview of the privatization issues on August 29.  The Post reports that the Virginia Governor's plan will be revealed on September 8, 2010.   We will add to this blog as this issue evolves. 

The Chicago Executive Committee meeting on July 29 included a presentation of current market conditions by Nick Lake from the Nielsen Company. I have included Nick's PowerPoint presentation here as an example of the resources we will be providing in the members only section of the website.

Download Presentation (PPTX)

The NABI Executive Committee will be holding its July meeting at the Crown Imports offices in Chicago, IL. Retiring NABI Board member and past officer, Mike Kelly, has been invited to Chicago to join the Executive Committee for their meeting.

Officials from TTB have acknowledged that they will present at this meeting. The new NABI website will be formally launched. Our hosts for this meeting, Jim Ryan and Crown Imports have arranged for a very special Major League Baseball evening at US Cellular Field following our meeting. The Chicago White Sox will be playing the Seattle Mariners. All Executive Committee members are encouraged to attend. Acknowledgements should be sent to Bernie Emamali.

TTB has hosted on their site the French, Spanish and Chinese translations of the requirements information.

Thanks to one of our associate members, Vinitaly, there is NOW an Italian translation of key parts of the TTB website for use by Italian language suppliers.

View Italian Translation

	Alcohol and Tobacco Tax and Trade Bureau: Access TTB Forms State Alcohol Beverage Boards
	U.S. Customs and Border Protection: www.cbp.gov
	Federal Trade Commission: www.ftc.gov
	Food and Drug Administration: www.fda.gov
	U.S. Trade Representative: www.ustr.gov
	U.S. International Trade Commission: Latest version of the Harmonized Tariff Schedule
	Federal & State Convening & Adjournment Dates: link coming

...

NABI President, Bill Earle, moderated a workshop at the Italian Embassy in Washington, DC focused on expanding understanding of Italian wine controls and oversight. This meeting brought together representatives of TTB, the US Trade Representative, US Department of Agriculture, Italian Trade Commission, Italian ministry of agriculture, Unione Italiana Vini, Instituto San Michele all’Adige and Italian press. The three hour workshop included presentations by Italian ministry officials and technical laboratory staff, as well as a question and answer session with all attendees. Ambassador Giulio Terzi di Sant'Agata opened the session by thanking NABI and other officials for their presentations and interest in improving the understanding of Italian oversight of wine particularly in the commerce of export to the United States. This meeting was part of the effort to educate US regulators in light of the controls then in place on Brunello.

Introduced on April 15 in the U. S. House of Representatives HR 5034, the Comprehensive Alcohol Regulatory Effectiveness Act of 2010 (CARE act), purports to support state based alcohol regulation by “clarifying” evidentiary rules for alcohol matters. This bill would accomplish this by effectively suspending the protections of the Commerce Clause of the Constitution in situations where state or local alcohol laws are challenged. Currently the bill has 106 co-sponsors. It has yet to be introduced as a Senate version. Generally producers, importers and their trade associations have been uniformly opposed to the legislation. NABI has prepared a position in opposition that has been reviewed by the board of directors and sent to all House of Representative offices.

Click here to download a copy of our position.

On June 13 in Louisville, KY members of NABI’s Beer Committee hosted an event opening the American Beverage Licensee’s annual convention. The Frazier International Museum provided the backdrop for a wide selection of imported beers. Attendees were treated to access to a diverse collection of historic American and British weapons and artifacts from medieval Europe thru 19th century North America.

NABI is pleased to send the official circular from the French Minister of Food, Agriculture and Fisheries to the Director of the Institut National de l’Origine et de la Qualite (INAO) providing instructions/procedures for issuance of an INAO declaration for Protected Geographical Indication (PGI) Pinot Noir wines from the Languedoc-Roussillon Region for purposes of export to the United States. The official circular (Circulaire DGPAAT/SDPM/C2010-3057, dated 28 Mai 2010) is signed and dated so therefore in full force and effect.

All procedures are described in the official circular. A copy of the “Application Form for Issuance of a Certificate for the Purpose of Export to the United States of America of PGI Wines from Languedoc-Roussillon Containing Pinot Noir” may be found in Annex 2 and a template of the French government declaration may be found in Annex 3.

The declaration is requires as a result of a mandate (IC 2010-5) from the Alcohol and Tobacco Tax and Trade Bureau (TTB) that importers of bottled, labeled or bulk pinot noir wine from the Languedoc-Roussillon of France must hold a declaration issued by the
French government for purposes of export to the US. (Copy included in the official circular)

Link to Official French Circular (French and courtesy translation in English)

Related links:

French Minister of Food, Agriculture and Fisheries 
(then go to “DIRECTION GENERALE DES POLITIQUES AGRICOLE, AGROALIMENTAIRE ET DES TERRITOIRES”.)

NABI will continue to keep you informed.

On May 3 TTB published Industry Circular 2010-5 imposing new requirements on the release of French pinot noir from Languedoc to the US market. On the heels of fraud investigations in France and the sentencing of those involved in the fraud in Paris, TTB halted the release of stocks of pinot noir from the affected region. Officials of the French fraud agency DGCCRF met with TTB officials on May 7 in Washington. Since that meeting officials in Paris have been deliberating over the process for issuing the release declarations from the government.

NABI has received an advance copy of the French procedure for obtaining the TTB required Certification. The procedures and supplier forms can be found at: http://agriculture.gouv.fr/sections/publications/bulletin-officiel , then to "DIRECTION GENERALE DES POLITIQUES AGRICOLE, AGROALIMENTAIRE ET DES TERRITOIRES."

The French National Institute for Product Origin and Quality or INAO will be the issuing agency for these declarations. Electronic versions of the declarations will be acceptable by TTB and must be obtained prior to release of any stocks of the affected pinot noir to the retail trade. Entry through Customs is not impacted by this new clearance process. Importers are accountable for having the necessary declarations on file prior to release. TTB has published a series of FAQs initiated by several questions posed by NABI.

TTB has commented that INAO is not likely to be able to certify any of the bulk imported pinot noir that may be currently in storage in the US. The status of this product may be dependent on future negotiations with TTB.

On March 29 TTB issued Industry Circular 2010-3 which canceled the requirement for government declarations on Brunello wine exported to the US. On April 15 TTB signed a memorandum of understanding ( MOU) with the government of Italy. This establishes a more open dialogue between governments on issues affecting the trade in beverage alcohol. TTB’s action lifting the Brunello requirement followed meetings organized by NABI and including members and TTB officials to resolve the Brunello issue and demonstrate the high level of compliance by importers. NABI carried the good news concerning progress on the Brunello issue to its meetings with producers in Verona and Tuscany. At the VinItaly Brunello pavilion NABI President Bill Earle met with the consorzio president and staff director accompanied by Nick Lake, the Neilsen Company.

Mike Kelly, Senior Vice President and General Counsel, Moet Hennessy USA retired July1, 2010 after 24 years of service in the beverage alcohol industry. Mike has been an active and supportive member of the NABI Board and in leadership positions with NABI. In fact this is not “retirement” for Mike but rather transitioning to the firm of Wormser, Kiely, Galef & Jacobs LLP. Mike has been invited to attend our July Executive Committee meeting in Chicago so that many of us can thank him in person for his contributions to NABI. Mike’s new email is: mkelly@wkgj.com.

Harvey Fox, former Director of Regulations and Rulings at US Customs died at Johns Hopkins Hospital following a recently discovered cancer. Harvey was with the firm of Adduci, Mastriani & Schaumberg LLP at the time of his death. Former NABI President, Bob Maxwell, delivered remarks at a memorial service for Fox in Washington, DC. Harvey was a regular contact for the NABI office. His untimely passing will leave a void in our base of reliable go-to Customs expertise.

In 2008, the Alcohol and Tobacco Tax and Trade Bureau (TTB) established two market-based sampling programs, the Alcohol Beverage Sampling Program and the Alcohol Beverage Advertising Program for use in determining on an annual basis the rate of compliance by industry with Federal alcohol beverage laws and regulations concerning advertising, labeling and product content. The results of the FY 2008 (for distilled spirits) and FY 2009 (for malt beverages) programs are now available.

Results of FY 2008 Alcohol Beverage Sampling/Advertising Programs for Distilled Spirits

Label Compliance
About 88% of all distilled spirits labels in the marketplace are in compliance with Federal alcohol beverage laws and regulations. The reasons found for non-compliance are: conflicting back and neck labels from what appears on the approved COLA; statement of composition did not match approved COLA; net content statement not blown into bottle as indicated on approved COLA; and legibility issues.

Product Label versus Content Compliance
About 62% of distilled spirits in the marketplace are in compliance with Federal laws and regulations; 95% of sample content violations are the result of being over-proof or under-proof beyond established tolerance levels when compared to the proof statement on the product label; and about a 98% of compliance with Federal laws and regulations for product content matching the labeled description.

The alcohol content statement was the most common reason for contents differing from what was stated on the label. Only two products were found to be under-proof and should have been labeled as “diluted.” TTB found overall that imports were just as likely as domestics to be found compliant in both labeling and lab-tested content; the compliance rate for spirits labels together with the compliance rate for consistency between the content and the label, excluding inaccurate proof statements, is about 87%; and the vast majority of noncompliant samples were due to the content not matching the label description.

Advertising Compliance
The compliance rate for all distilled spirits advertisements with Federal alcohol beverage advertising laws and regulations is about 86%. The top reasons for noncompliance are: missing alcohol statements for the advertised beverage, 45%; and missing responsible advertiser information, 58%. The top reasons for noncompliance of advertisement in each media type are: missing commodity statement (“Distilled from…”) in radio ads; missing class/type statement in Internet ads; missing alcohol statement in both radio and Internet ads; and missing responsible advertiser information in radio, Internet and print ads.

Results of FY 2009 Alcohol Beverage Sampling/Advertising Programs for Malt Beverages:

Label Compliance
About 90% of all malt beverage labels in the marketplace are in compliance with Federal alcohol beverage laws and regulations. The reasons found for noncompliance in samples: no approved COLA; and additional labels or information appearing on container, bottle or cap than what appear on the approved COLA.

About 92% of malt beverage products in the marketplace are in compliance with Federal alcohol beverage laws and regulations. The reasons for content noncompliance in samples are: containers were over or under-filled; actual alcohol content was either less or more than stated on the label; and actual calories did not match what was stated on the label.

TTB found overall that there is no significant difference in labeling and content compliance rates for imported and domestic products. The overall marketplace compliance rate for malt beverage labels together with the compliance rate for content is about 85%.

Advertising Compliance
Internet advertising appears to have the most compliance issues with TV ads. The top four reasons for noncompliance in malt beverage advertising are: missing responsible advertiser information (37%); prohibited strength claims regarding alcohol content (30%); missing mandatory class information (22%); and calorie or carbohydrate claims missing the required average analysis statement. The most common reason for noncompliance by media type are: prohibited strength claims, Internet (45%); missing responsible advertiser information, outdoor 86%, print 80%, and radio 100%; and missing class designation, print 80% and TV 60%.

The results of FY 2010 Alcohol Beverage Sampling/Advertising for Wine will be available at a later date.

At the Beer Institute’s annual meeting in Milwaukee, Wisconsin Chairman David Peacock, Anheuser-Bush Inbev, introduced the attendees to Navy Captain Joseph McClain as the new President of Beer Institute. Captain McClain is a veteran Navy flyer who currently is assigned as the Navy’s principle representative to the US House of Representatives. Later this Summer Captain McClain will begin his duties leading the Beer Institute organization. Also during the meeting Art DeCelle was recognized for his years of service to BI and presented with the first Jeff Becker leadership award. Joining Art for recognition was Doris Dunn who has been working in beer associations for over 40 years, first at the Brewers Association and currently at BI.

Construction of the new NABI website is underway. Early designs were shown at the Member meeting in March. Further refinements on design and content have been made. It is expected that a launch will be ready for mid-July 2010. A prominent design feature will be a slideshow of product labels from our members. We are interested in which labels members would like us to feature in this animated aspect of the site. We will also be inaugurating a new domain name for the organization that will be easy to remember and focus interest on the association. The domain www.bevimporters.org has been reserved for our new internet location. Our old domain will continue to function post launch until a suitable transition has elapsed. The phase in will allow for member input much like that which we received at the annual meeting.

On April 10 NABI facilitated an open forum discussion with Italian wine producers and others at the VinItaly wine show in Verona, Italy. The panel was made up of NABI Executive Committee Chair, Michael O’Brien, General Counsel Palmbay International, Alex Joerger Wine Director A&P Best Cellars and Nick Lake, Senior VP Beverage Alcohol, the Neilsen Company. Bill Earle moderated the panel. Over more than two hours panelist gave attendees an insight into the Italian wine market in the US. The Neilsen presentation of data on current buying trends in the wine segment was followed by insights from the importer and retail sectors. Officials from the regional and national government also made presentations. This was the first time that VinItaly attendees were given a multi-tier overview of the important American wine market. The PowerPoint slides used at the seminar are attached to the Update. Attendees commented that the timeliness and analysis of the data shared at this event were particularly helpful to the industry as they develop production and marketing strategies over the coming year.

Customs and Border Protection proposed ending the practice of paying claims for substitution drawback in a notice published in the Federal Register on October 15, 2009. Ending this practice would have restored the export drawback system to an open and transparent process. NABI submitted comments supporting the proposed action by the Department of Homeland Security. A joint letter from Senators representing wine importing states strongly opposed any change to the current practice. In the end Treasury and Homeland Security Departments opted to withdraw the proposal on March 2, 2010. The withdrawal stated that further consideration was needed on the proposal. Though political headwinds likely prompted this action, the adverse impact on the Treasury (est. $50M) should support future successful attempts at reform.

Madame Bai Lu, Director of the Chinese Import and Export Food Safety Bureau and her delegation were the guests of NABI at a National Press Club Luncheon on March 19, 2010. We were joined at the luncheon by Art DeCelle, then General Counsel for the Beer Institute. Director Bai Lu organization in China is part of a 300,000 person agency charged with import and export food safety responsibilities including beverage alcohol products.

The luncheon was an excellent low key venue for engaging these Chinese officials and sharing aspects of controls and regulations here in the US. Feedback from TTB officials accompanying the delegation on to California was very positive about the interchange and extended luncheon.

The Annual NABI member meeting was held at the National Press Club’s First Amendment Room on March 10. The Board and officers were pleased with the turn out and the business agenda. The withdrawal of the substitution drawback proposal leaves in place essentially a subsidy for US exporters who also import wine. Representatives of the Washington firm, McDermott, Will and Emery presented an overview of how importers could take advantage of this Customs procedure. Until Treasury and Homeland Security Departments act to suspend the drawback this option is available to all importers. Export credits are transferable and may not be limited to wine. NABI staff can discuss these provisions with members who have an interest in learning more.

Presentations by William Foster, TTB, and Janet Evans, FTC, included updates on current enforcement strategies of each of these agencies important to importers. Foster discussed ongoing investigations of the French pinot noir fraud and gave some indication of the actions that were published in TTB Industry Circular 2010-5 on May 3. Janet Evans briefed members on the FTC’s ongoing review of advertising and media placements. Some NABI members had just completed an FTC review and were able to question Evans about who might be next in line for review.

On Wednesday evening, March 10, 2010 NABI joined with the California State Society and the Wine Institute to support a silent and live auction of wine and spirits products to benefit the Clinton-Bush Fund. The auctions raised $80,000 from participants, which included several members of Congress. NABI arranged for a basket of member products. The diverse NABI basket (in the midst of all that wine) was very popular with the winning bid going to the President of the Wine Institute, Bobby Koch. A unique item was a signed Kenny Chesney guitar provided by Jim Ryan.

The US International Trade Commission (USITC) recently posted to it website the 2010 Harmonized Tariff Schedule of the United States Annotated (HTSA). Click on the link below for a full version or a chapter-by- chapter version (Chapter 22 - Beverages, Spirits and Vinegar) of the HTSA. The HTSA is in effect as of January 1, 2010.

Official Harmonized Tariff Scheduled of the US Annotated (HTSA)

Official Harmonized Tariff Scheduled of the US Annotated (HTSA) by Chapter.