Issues & Initiatives

Overview

MBDA informs local and federal officials about our state-based alcohol regulation and its impact on the state’s economy. Here are some key points:

● Economic Contribution: MBDA’s family-owned beverage distributors contribute to the local and state economy through job creation, tax revenue, and supporting other local businesses.

● Consumer Choice: Distributors provide consumers with a wide range of choices, including products from small and local breweries and wineries, contributing to a vibrant and diverse market.

● Regulatory Compliance: MBDA’s distributors are committed to complying with local and federal regulations, ensuring safe and responsible alcohol distribution.

● Community Involvement: Distributors play an active role in their communities through sponsorships, partnerships, and responsible alcohol education programs.

● Flexibility: MBDA’s independent distributors can respond quickly to changing market conditions, such as a product recall.

● Local Advocacy: MBDA encourages officials to consider policies that support the growth and sustainability of family-owned beverage distributors, as they are vital to preserving the integrity of local alcohol markets.

By providing officials with an understanding of the diverse role Maine’s family-owned beverage distributors play in their communities, MBDA helps ensure that policies and regulations are balanced and supportive of these local businesses.

Maine Regulator – BABLO

The Maine Bureau of Alcoholic Beverages and Lottery Operations (BABLO) oversees the regulation of the alcohol industry. BABLO’s Division of Liquor Licensing and Enforcement has the responsibility for the licensing of all liquor licensees throughout Maine and the enforcement of Maine Liquor laws codified in Title 28-A of the Maine statute. Alcohol distributors must also have a federal

permit, and these businesses rely on the Alcohol and Tobacco Tax and Trade Bureau to provide clarity on regulations to operate legally. See how Maine’s alcohol regulatory and enforcement landscape compares to other states: Read the study (PDF).

State Franchise Laws

What are Franchise Laws?

The 21st Amendment to the United States Constitution gives individual states the authority to regulate alcohol within their borders. State franchise laws are a key component of this regulatory framework, specifically addressing the relationships between suppliers (such as breweries, wineries, and distilleries) and distributors. These laws are meant to strike a balance between promoting competition, protecting consumer choice, and maintaining responsible alcohol distribution within the state.

Who Benefits?

Maine’s alcoholic beverage franchise laws benefit a variety of stakeholders within the alcoholic beverage industry:

● Alcoholic Beverage Producers: These laws provide protections to producers such as distilleries, breweries, and wineries by regulating their relationships with distributors, helping maintain product quality, and ensuring that their products are effectively distributed in the market.

● Distributors: As distributors are granted exclusive distribution rights in a particular geographic area, this exclusivity leads to stable business relationships and revenue streams.

● Retailers: These laws can help ensure that retailers have access to a variety of beverages from different producers and that the products are legitimate and safe for consumption.

● Consumers: Maine consumers benefit from the stability and variety offered by franchise laws by accessing a wide selection of alcoholic beverages at local retailers.

● Maine’s Government: Maine’s government benefits from alcoholic franchise laws through the collection of taxes and licensing fees. These laws also provide a regulatory framework for the sale and distribution of alcoholic beverages, contributing to public safety and revenue generation.

Taxation

Alcohol is one of the most highly taxed consumer goods in the United States. In addition to sales taxes, alcoholic beverages are subject to excise taxes on both the Maine and federal levels. Excise taxes are applied on a per-unit basis.

Maine has relatively high taxes on alcohol compared to other states. Beer excise taxes are the 12th highest, with distributors being responsible for paying a state excise tax of $0.35 per gallon.

Wine excise taxes are also collected by distributors at a rate of $0.60 per gallon. Sparkling wine has an excise tax of $1.25 per gallon. In addition, there is a 5.5% general sales tax and a 7% on-premises sales tax on all alcohol sold.

Role of the Three-Tier System

The three-tier system has ensured the collection of billions of dollars in taxes at the local, state, and federal levels, creating a reliable and cost-effective system of revenue collection.

This system of checks and balances helps identify tax evaders and criminal enterprises and prevents them from selling to consumers and undercutting local retailers and small businesses. This results in a healthy and thriving local marketplace for consumers to enjoy. This also means tax revenue collected by distributors gets reinvested in local communities to fund schools, law enforcement, and public safety initiatives.

To see more info on the Three-Tier System click [here.]

Quality Jobs and State Revenue

MBDA distributors are a significant contributor to annual tax revenue for Maine. Its Three-Tier System has ensured the collection of billions of dollars in taxes at the local, state, and federal levels, creating a reliable and cost-effective system of revenue collection.

Here’s how it works:

● Tax Revenue Generation: The production, distribution, and sale of all alcohol are subject to various taxes, including excise taxes, sales taxes, and licensing fees. These taxes are collected at each level of the three-tier system. As a result, the MBDA distributors generate nearly $400 million in tax revenue for Maine.

● Local and State Taxes: The taxes collected from all alcoholic beverages contribute to state and local budgets. These funds can be used for a wide range of purposes, including infrastructure improvements, education, healthcare, public safety, and more.

● Regulation and Tax Collection: Distributors ensure that appropriate taxes are collected at each stage of the supply chain and that products are properly taxed and tracked as they move from producers to retailers.

● Job Creation: The beer and wine industry also plays a crucial role in supporting well-paying jobs. These include jobs in administrative, delivery, sales, and warehouse associates and help support jobs in retail, hospitality, and tourism. MBDA distributors employ over 1,250 quality jobs throughout the state. These jobs contribute to local economies and help improve employment rates.

Responsible Alcohol Consumption

Independent beverage distributors, especially those dealing with alcohol, operate in a regulated and unique industry compared to other consumer goods. Here are some ways it is different:

● Impaired Driving: Alcohol is a significant contributor to impaired driving incidents. Independent distributors ensure that alcoholic beverages are distributed to licensed retailers, whom they train not to sell to individuals who may operate vehicles while under the influence.

Public Health: Excessive alcohol consumption can have adverse health effects. Distributors work within the framework of public health policies and campaigns to promote responsible drinking. In addition, MBDA’s distributors participate in a wide variety of programs that promote responsible alcohol consumption and prevent abuse.

Beverage Container Recycling “Bottle Bill”

MBDA is a strong advocate of preserving Maine’s natural resources and elevating consumer awareness about responsible recycling state-wide.

In addition to our efforts to follow green business practices, our members are active participants in the bottle recycling program, ensuring empty beverage containers are delivered to a recycling center, thus keeping our roadsides clean and landfills free of unnecessary waste.

Maine’s Bottle Bill was passed into law in 1978 and since then, MBDA’s distributors have been tasked with building the infrastructure to pick up, process, and recycle returned containers.

To learn more about the Bottle Bill program, click [here]

E-Commerce

With direct shipping of alcohol bypassing the state regulatory system, this proves to be a detriment to Maine’s current system of checks and balances.

Without traditional distribution methods, reliable tax collection has suffered. Traditional brick-and-mortar retailers who have investments in infrastructure, employees, and pay taxes to the state also lose out to electronic sales.

The biggest issue with alcohol e-commerce is the issue of underage buyers. Minors have technology skills that are often more savvy than their parents. With mobile devices, it is easier to order and pay for alcohol undetected.

Political Advocacy

● MBDA is proud to maintain the Three-Tier System and advocate for our independent distributors on legislative, regulatory, legal, and public policy matters. We are dedicated to educating policymakers, licensees, and the public about the societal value of the current Three-Tier System in regulating the manufacturing, independent distribution, and retail sale of alcoholic beverages.

● MBDA’s goal is to provide leadership and service for our members through a favorable economic, social, and legislative environment.

● MBDA advocates for the socially responsible development of the regulated beverage marketplace. We aim to achieve a healthy regulated beverage marketplace while balancing the needs of our members, customers, and communities.