October 8th – Zero Link Markets, Inc. (dba VinoShipper.com) supports major reforms to the three-tier system as the Biden Administration considers ways to improve competition for independent producers of beer, wine, and spirits. The e-commerce and compliance company that helps small and medium-sized wineries sell directly to consumers submitted a five-page letter on September 30 as official comments for consideration by the U.S. Treasury Department.
“We have a historic opportunity to influence the way government regulates the wine, beer, and spirits industries and encourage the widespread adoption of Direct-to-Consumer sales,” said VinoShipper CEO Steven Harrison. “The U.S. Treasury Department has asked an important question related to our industry at a time when equity, commerce, and technology have merged into a once-in-a-lifetime opportunity to give independent producers a chance to compete under modern rules from this century.”
This summer, President Biden issued an executive order directing the U.S. Treasury Department to review its trade practice regulations that may “unnecessarily inhibit competition” and consider “reducing any barriers that impede market access for smaller and independent brewers, winemakers, and distilleries.” The Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a Request for Information soliciting comments online at www.regulations.gov as it considers any changes to federal law related to the sale and distribution of wine and spirits. 825 comments were submitted prior to last week’s deadline.
A central part of the discussion is the three-tier system that was enacted after the 21st Amendment and the end of Prohibition. The nearly 90-year old system benefits major wholesalers and large producers as the industry consolidates to the disadvantage of small and medium-sized producers. For example, out of more than 11,000 wineries in the U.S., the top 10 producers account for 67 percent of all output. While at the same time, the wholesale lobby annually spends record-level cash to influence and support the status quo.
On behalf of the company’s 2500 winery clients, Zero Link Markets, Inc. outlined their positions as follows:
- As independent producers, we support open, fair, and competitive markets. We oppose excessive market concentrations that threaten basic economic liberties for small businesses, workers, startups, and consumers.
- The nearly 90-year old three-tier system needs to be reformed, most importantly by not mandating the distributor tier for small and medium-sized producers.
- Regulators should give small and medium-sized wine producers, farmers, and small businesses more opportunity to compete in a modern marketplace where we can sell directly to consumers.
- Independent producers can benefit the economy and thrive by using modern e-commerce-based compliance platforms that give consumers more information, choice, and value. More brands will reach more households.
- Direct-to-Consumer e-commerce platforms are safe and effective at tracking taxes, licensing, and all levels of compliance.
- We believe in strict legal compliance, licensing, and taxation throughout our industry. We are committed to the safe and responsible consumption of alcoholic beverages in our communities.
VinoShipper, based in California, provides software to manage direct-to-consumer compliance, shopping carts, and club management solutions to help small to medium size wine, mead, and cider producers to compete on a national basis and expand the reach of their brands.