Comments Document

Chairwoman Robinson and Members of the Committee: My name is Robert Melvin, and I am the senior manager of state government affairs for the Northeast region for the R Street Institute. I reside in Richmond. The R Street Institute is a nonprofit, nonpartisan public policy research organization. Our mission is to engage in policy research and outreach to promote free markets and limited, effective government in many areas, including public policy related to alcohol and criminal justice issues. This is why HB 1730 is of particular interest to our organization. As you know, the COVID-19 pandemic upended labor markets and businesses around the Commonwealth. Hospitality businesses like restaurants were one of the hardest hit sectors of Virginia’s economy. These businesses continue to face workforce challenges even several years after the forced closures and restrictions imposed by government edicts. Recent reports indicate that restauranteurs still have an inadequate number of staff, including waiters, bartenders, managers and others. Unfortunately, archaic state prohibitions hamper the ability of restaurants and other businesses that hold Virginia Alcohol Beverage Control Authority (VABC) licenses to hire employees who possess certain criminal records. The VABC possesses the power to “suspend or revoke” a VABC license from a restaurant or other establishment if that business hires an individual who has been convicted of a “felony…or offense involving moral turpitude.” The challenge is that these stipulations not only hold back the recovery of the workforce for the struggling hospitality industry, but they also act as a barrier to gainful employment for the formerly incarcerated. Studies have found that recidivism can be curtailed if former inmates are able to obtain meaningful employment. While the VABC can grant special dispensation from these requirements, the process alone still discourages many licensees from hiring individuals with certain criminal records. Ultimately, the question is whether the government should dictate who employers are allowed to hire. Conversations with many restaurateurs have yielded the conclusion that the structure of the system acts as a disincentive because there are perceived challenges with pursuing this process and the risk of a potential license suspension from simply hiring a formerly incarcerated individual is too high. Restaurant owners and other licensees should have the ability to determine who they deem best to hire for a particular position, free of any government involvement. There is a market incentive for these businesses to hire individuals who they deem to be a good fit for a position, and the business owners are certainly more qualified to make that determination than an alcohol regulator would be. As you consider HB 1730, we urge you to recognize the benefits of this legislation. The proposal can help alleviate the workforce shortage in Virginia’s restaurants. This bill will also provide a path to meaningful employment for formerly incarcerated individuals and help them reintegrate into society. Additionally, it will put the power to make hiring decisions back in the hands of the most appropriate individual—the business owner. For these reasons, I strongly encourage you to grant this legislation favorable consideration. Thank you, Robert Melvin Senior Manager, Government Affairs for the Northeast Region R Street Institute rmelvin@rstreet.org

As a very small farm brewery we fully support this bill. Our small scale does not make large distribution companies feasible financially or logistically. However we would greatly appreciate the opportunity to provide our products to other small businesses such as local bottle shops and restaurants as another way to reach customers. A vote for this bill supports getting more Virginia made products to market and allows product offerings beyond the large players in the beer industry. This bill encourages small business and provides a state tax generating platform to do so. As a farm winery as well, it only seems right to afford a similar wholesale privilege to both agricultural based alcoholic beverge types. Thank you for your consideration and please vote yes for HB 2258! Cheers!

To the honorable house committee, Thank you for your work on HB 2258. Stable Craft Brewing is one of many examples in our Commonwealth that have been held back from creating more jobs, adding more to our local economy and having a fair path forward to reach our potential as a craft beverage producer. We also have a spouse that is indeed our distributor, I can attest that distribution is very difficult and believe there is a need for distributors, but we need a fair opportunity over the model that exists now allowing a Virginia product to be held back by the current laws that Travis Hill noted by allowing wine to be distributed with VDACS and not beer. A competitive wholesale distributor doesn't need the hammering effect of the current laws. While I'm pleased these steps are being taken I remain concerned that the wholesalers association can bargain our liberties by stating a spouse can no longer be a distributor. I am aware and grateful for the grandfather clause on this matter in lieu of my concerns. Virginia will see a new dawn, a boom in Virginia born products finally reaching Virginia customers should this bill become law. It will also settle many frustrations of wholesale distributors once more breweries experience what it is really like to compete for sales at the retail level, an awakening if you will to the tribulations of logistic management. But let's be real, wholesalers sell products for the highest bidder with incentives from national and international brands to ensure they reach Virginia customers. It's been my experience that my brand was collected into a portfolio of beers with a major distributor only to control those incentives from other brands by selling our brands after certain goals were accumulated. It's hard to grow when the Beer Franchise Act no longer serves all Virginians. The Beer wholesale association is well funded and it's easy to understand how voting is swayed when time is taken to review VPAP.org. In closing, thank you for supporting Virginia Craft Breweries and allowing all Virginians to have an equal chance for success. Sincerely, Craig Nargi

Thank you for the opportunity to speak to HB 2258-Robinson today. I am David St Clair, owner of Swover Creek Farms Brewery in Shenandoah County. I was the first brewery in operation in Shenandoah County and one of the very early Farm Breweries (Limited Brewery) in the state nine years ago. My wife and I run a family farm operation which includes homemade, farm sourced food and beer products. This is a Virginia Century Farm. We offer both wholesome food and beer but also a pleasant area for our tourist and local resident friends to enjoy country life. I presently have to sell all my beer out of my establishment due to my inability to distribute to retail customers. I worked with our Guild last year to help develop a model emulating the successful Virginia Wine Distribution Company, VWDC, that would allow breweries to add an additional retail avenue. A couple quick points about this opportunity. For me, it would mean I can now participate in local events such as the county fair, travel association events, chamber of commerce events. I presently have had to decline requests to represent the our local community because I do not have an agreement with a beer wholesaler. Understand, it makes little sense for a wholesaler to come out to my facility, pick up a keg and deliver it to a one time event. Just to have to go back and retrieve it again. Obviously, the costs associated with this activity would make my product very price uncompetitive. By utilizing a mechanism similar to the VWDC model, I will be able to sell and deliver my one keg to these opportunities as well as get my name and product in places like Bryce Resort and neighboring retailers so travelers and tourists can experience my product or take a memento home with them to remember their experience in the Shenandoah Valley. Additionally, for the mid-sized breweries this bill will allow them to test market their products, while limiting overall start up costs and if deemed successful, will spring them into expansion and subsequent arrangements with conventional distribution. I ask that you approve this bill and pass it along. The benefits of this bill will allow further growth of our farming enterprises and craft brewing industries. Thank you.

To the Honorable Members of this committee, Thank you for your work on HB 2258. Stable Craft Brewing is one of many examples in our Commonwealth that have been held back from creating more jobs, adding more to our local economy and having a fair path forward to reach our potential as a craft beverage producer. We also have a spouse that is indeed our distributor, I can attest that distribution is very difficult and believe there is a need for distributors, but we need a fair opportunity over the model that exists now allowing a Virginia product to be held back by the current laws that Travis Hill noted by allowing wine to be distributed with VDACS and not beer. A competitive wholesale distributor doesn't need the hammering effect of the current laws. While I'm pleased these steps are being taken I remain concerned that the wholesalers association can bargain our liberties by stating a spouse can no longer be a distributor. I am aware and grateful for the grandfather clause on this matter in lieu of my concerns as my spouse owns AgriBev distribution. Virginia will see a new dawn, a boom in Virginia born products finally reaching Virginia customers should this bill become law. It will also settle many frustrations of wholesale distributors once more breweries experience what it is really like to compete for sales at the retail level, an awakening if you will to the tribulations of logistic management. But let's be real, wholesalers sell products for the highest bidder with incentives from national and international brands to ensure they reach Virginia customers. It's been my experience that my brand was collected into a portfolio of beers with a major distributor only to control those incentives from other brands by selling our brands after certain goals were accumulated. It's hard to grow when the Beer Franchise Act no longer serves all Virginians. The Beer wholesale association is well funded and it's easy to understand how voting is swayed when time is taken to review VPAP.org. In closing, thank you for supporting Virginia Craft Breweries and allowing all Virginians to have an equal chance for success. Sincerely, Craig Nargi -- CRAIG NARGI | Founder 2022 International Brewski Competition Best Beer, Best Cider,Platinum,Gold, Silver awards 2022 Virginia Craft Brewers award multiple silver medals 2021 Brewery of the Year Virginia Restaurant Travel Lodging Association 2022 Green Brewery of the Year Virginia Tourism Corporation Member of Virginia Free INDEPENDENT SUSTAINABLY CRAFTED BEER | CIDER | SODA | CULINARY | EVENTS | SUITES Stable Craft Brewing at Hermitage Hill Farm & Stables

HB2258-Robinson Good afternoon, I am the owner and brewer of Chubby Squirrel Brewing Company, a neighborhood brewpub that offers a place of community with neighbors and friends, education to local patrons, and fellowship. We have worked hard to hone our craft in making premium malt beverages, but because we are a small business and do not produce thousands of barrels of beer annually, we are effectively shut out of the marketplace as we are deemed too small by most distributors to work with and have an effective relationship with. Moreover, especially in these difficult times, every penny counts for a small business, and in the current system, it is very unprofitable for a small business to sell their beer through conventional distribution. As many states have adopted similar laws in recent years - or are working towards them - I strongly urge for the passage of HR2258 to allow small businesses to compete in the market place and remove a barrier to entry. This will allow for small breweries to hire more staff, use more quality Virginia malts and grains, provide restaurants with high quality Virginia-made products and overall promote economic growth in the Commonwealth. Moreover, removing barriers to entry is known to grow diversity in industries, which is a known concern by the Brewers Association of America. Allowing breweries to operate on an even footing as other beverages made in the state is good business for existing proprietors, under-represented communities, Virginia farmers, consumers, workers, and the general Virginia economy. Thank you.