Capitol Hill may be gridlocked in Washington, DC, but the White House is not. Methodically, the Biden-Harris Administration’s roll out of the New American Dream for the economy continues rolling forward. One aspect of that rollout was advanced this week when the United States Treasury Department released its report “Competition in the Markets for Beer, Wine, and Spirits” (Report) as required under Executive Order 14036, Promoting Competition in the American Economy.
This article continues a series on this major initiative of the Biden-Harris Administration that is covered in two previous articles on this blog in July…
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Activity and chatter around President Biden’s executive order on competition continues to grow.[i] As you recall, of the 72 action items in the executive order (EO), two involve alcohol beverages.[ii] Essentially, the first covers consolidation in the industry at all tiers and the second covers whether the current unfair trade practice rules impede or pose obstacles for new entrants into the tiers. The Treasury Department is tasked with submitting a report on consolidation to the White House within 120 days from the date of the EO and Treasury and the Alcohol and Tobacco Tax and Trade Bureau (TTB) are tasked with submitting a report on unfair trade practices within 240 days. Consultation with the Federal Trade Commission and the Antitrust Division of the Justice Department is required.
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“Now, look, I’m a proud capitalist...I know America can’t succeed unless American business succeeds.
“But let me be very clear: Capitalism without competition isn’t capitalism; it’s exploitation. Without healthy competition, big players can change and charge whatever they want and treat you however they want. And for too many Americans, that means accepting a bad deal for things that can’t go — you can’t go without.”
President Joseph R. Biden, Jr. speaking at the White House on July 9, 2021
Last Friday, President Biden, with great fanfare, signed an executive order that defines his vision for our economy moving forward into the second decade of the 21st Century. The first two decades brought fundamental expectancies in a terrorist attack, a financial melt-down, never-ending wars, and a global pandemic not seen for a century. The change in direction of the American economy roadmaped in the executive order will be as striking as the afore events but will be a forward-looking industrial policy. This executive order and the Biden/Harris Administration’s infrastructure plan, if successfully implemented, will reimagine the “American Dream” for decades and serve as the lasting face of the United States in the global economy.
Or, is it a pipedream?
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By Rebecca Stamey-White and Jeff Carroll
In our previous posts in this series, we covered the original regulatory frameworks for alcohol marketplaces (Part 1), the compounded sales tax complexities with the addition of marketplace facilitator laws (Part 2), the flow of funds considerations for marketplaces (Part 3), and age verification and enforcement issues (Part 4). Now we’ll look at what the future may bring for this important segment of the industry.
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As the economy revives from the COVID-19 lockdowns, we expect privacy law regulatory enforcement to return to the pre-COVID-19 pace.
The privacy regulations affect all businesses, including the alcoholic beverage industry, and are “strict liability” laws. “Strict liability” means the business will be automatically “guilty” if found non-compliant. There is no “grace period” to rectify the claimed violation nor to offer any defense if non-compliant. Even more problematic, besides enforcement by government, these statutes also allow private parties to “enforce the law” by filing private complaints for claimed violations. These private complaints (the lawyers are referred to as “bounty hunters”) typically lead to significant monetary settlements. The settlement agreements include payment of the plaintiff’s attorney fees, a significant liability of its own (often larger than the fines from violation of the regulations).
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