The alcohol industry has seen huge shifts in recent years. In 2020, the broadening of laws greatly increased how consumers were able to purchase and use their products. Now, according to Reuters, treasury initiatives will finally come into force aimed towards reducing the impact of the big producers and helping out smaller firms.
With a war chest of $250 million to help promote these businesses, there’s a huge opportunity – but also a huge risk. Alcohol law, while broader and easier to identify than before, is full of potholes, and this is something that regtech will help those small operators to plug.
Learning From The Masters
Of course, there are a set of businesses that have been pumping out alcohol long before the high-volume distributors and producers got their hands on it. Vineyards have a long and storied history in the USA, forming the fabric of communities across the warmer southern states.
California is the big name in that regard, but Oregon, Ohio, and Kentucky also produce the popular grape drink. Some of the best wines in the world originate in areas like the Temecula Valley, Napa County, and Sonoma.
Vineyard Regulations
Vineyards have, of course, faced their own struggles with regulation. The most recent of these battles was highlighted by the industry magazine the Wine Spectator, a positive decision that saw the rights of out-of-state wineries enshrined to the same level as that of in-state.
The lesson here? Beware of inter-state legal challenges; when looking to ship, businesses must ensure that they have proper tools in place to ensure that they’re meeting legal stipulations and aren’t risking federal challenges.
Quantifying The Ingredients In The Alcohol Industry
Away from the financial side and back into the matter of production, there are new regulatory challenges for alcohol producers. As highlighted by Just-Drinks, there is a wave of new rules incoming that outline the labeling standards that will be expected of producers – no matter their size.
Mislabelling can result in civil action and the potential for a business to be shut down – alongside the pressing risk of consumers being harmed by a product. As a result, it’s an important time to use regtech to compare ingredient lists with laws and to ensure that the entire process – from plant to bottle – captures allergens.
Marketing Under Pressure For Small Brewers?
According to the UN, a WHO report on the impacts of alcohol marketing has identified huge gaps in the compliance of cross-border alcohol marketing – even when it infringes upon directives in other countries. With laws much stricter in Europe and the Middle East, there is an emerging issue concerning the marketing of beer.
Smaller Brewers and Compliance Demands
Smaller brewers should be mindful. The larger brewers have the legal clout, finances, and sustainability within the market to be able to quickly pivot to new marketing practices and, importantly, eat the cost of adverse findings.
Conversely, smaller brewers can suffer irreparable legal damage as a result of not properly adjusting for compliance demands in the marketing sphere. Looking at the larger players and how they adapt and ensuring that smaller business marketing efforts meet the checklist of what regulations mean in regard to cross-border marketing will be essential.
The Future For Small Brewers
It’s exciting times for small alcohol producers – but with change and excitement will come challenges. Rather than walking into it blindly, it’s essential that businesses start to adapt.
As it happens, what’s required is, in many ways, common sense. Proper labeling, an awareness of marketing practices, and a keen eye on how sales will change from one market to the next.