Ep. 741 Jeff Carroll | Get US Market Ready With Italian Wine People

Thanks for tuning into my new show. Get US Market Ready with Italian wine people. I'm Steve Ray, author of the book how to get US Market Ready. And in my previous podcast, I shared some of the lessons I've learned from thirty years in the wine and spirits business helping brands enter and grow in the US market. This series will be dedicated to the personalities who have been working in the Italian wine sector in the US, their experiences, challenges, and personal stories. I'll uncover the roads that they walked shedding light on current trends, business strategies, and their unique brands. So thanks for listening in, and let's get to the interview. Hi. This is Steve Ray, and welcome to this week's edition of Get US Market Ready with Italian wine people. My guest this week is Jeff Carroll, who is general manager of Avilera. And you'll find out a little bit more about that in a minute, but, Jeff, welcome to the show. Thanks a lot for having me, Steve. I'm happy to be here. And give us a little background on you and how you came to be here Yeah. Absolutely. Yeah. I I've been doing effectively alcohol compliance software for about sixteen years. So coincidentally, I I actually kinda stumbled into the opportunity to work with six eight eight solutions. Which we eventually changed our name to ship compliant in May of two thousand and five. And that happened to be the month that the Grand Home versus Healed Supreme Court decision came down. So that was fortuitous timing. And was with with Ship compliant for eleven years. It was sold to Sobos in twenty fifteen. I left in twenty sixteen. And later on in twenty seventeen, I joined Complete and Rachel Ray at Complete. And was there for about, I guess, a little over a year, and and and then we eventually sold Complete to to Avilera. Really good fit because Avilera is just a really great software company with scalable and and robust technology and complete had been in business in in the Paso area doing wine compliance really for about twenty plus years. So putting those two companies together ended up being a really nice combination. So now you're the general manager of Avalara, and you're the guy who has all the answers when it comes to can I ship this product to this state? Or if not you, the system that Avalara service that Avalar provides. That that's basically it. But let's talk a little bit about history because some of the people listening might not know the significance of Grandholm. We we all do. So put that into perspective and then then and also referenced the Supreme Court. I just saw a headline the other day ducking the issue. That was the headline. Supreme Court ducks ship direct shipping issue. And then news today that Iowa has just approved, retailer shipping into Iowa. So Okay. Yeah. I will try to connect all those. I'll try to connect all those dots. So right. So in in in two thousand five, you had the Grand Hallum Supreme Court decision. I mean, you know, I think the wine industry really has been working at the direct shipping issue for roughly thirty years with with a purposeful strategy. Right? And that strategy included legislation, right, lobbying states to change laws. It included consumer advocacy, right through free the grapes, and I will disclose. I'm on the board of of free the grapes. And then also litigation that there was a, a group that that I think has has been basically disbanded called Coalition for free trade. And that and they took a a litigation strategy and had a successful campaign that resulted in the Supreme Court decision that basically said that states had to treat businesses even handedly. Right? You couldn't allow an in state business to in in in the case of Grand Homes specifically about wineries in Michigan and New York. You couldn't allow wineries to in state wineries to ship to consumers in New York. But prohibit out of state wineries from shipping into New York. So a lot of people thought that changed everything overnight. It it really didn't, but what it did is it became a catalyst. For states to revisit their loss. And, you saw from two thousand five until today, really, just a flood of legislative activity where all these states are creating these systems that allow for direct shipping from wineries. Let and let me, yeah, interrupt you. So the the, Grandholm thing, that was the point that it was, relative to a domestic winery and did not or it's known to now to not include retailers. And as we all know, there's a grant home was about wineries and not retailers. And that's kind of the area that, at least I'm most interested in because we're talking about an imported wine from from Italy. So I'm sorry. Go on. I just wanted to clarify that. Yeah. No. That's a good point. And and I think that that's a a point of of of much debate, right, as to whether Grand Home was was specifically limited to wineries or whether it's Right. Cause they didn't actually say that, but that's the interpretation. Right? Yeah. And then first and I'm not a lawyer. I'm not a constitutional lawyer. Right? So I I only go so far, but but that was a topic of of much debate. And that's where, to your earlier question, this whole Tennessee wine decision from a couple years ago comes into play is even though that case wasn't directly about direct shipping, it was more about, I think, total lining more and whether or not they could get a license in Tennessee and and their residency requirements. It did provide a little bit of clarity, or at least most people thought it provided clarity about whether or not these principles of Grand Home apply to other tiers. Like the retail tier and wholesale tier. So so in this case, it was that you had to be the entity had to be a resident of the state in order to get a retail license to, build and run a liquor store. Is that about it? Right. And whether or not that was constitutional. Correct. Okay. And so there's been uh-uh there's been a lot of back and forth. Let let me back up a bit. We were in the middle of connecting the dots and I interrupted you, but two other points you had mentioned free the grapes, which was an interesting organization really basically pushing for retailers to be allowed to ship interstate or compete, you know, in in the modern world that that we live in. I'm talking just post two thousand, not necessarily. You know, post COVID. There's also an organization called NHR, National Association of Wine Retailers headed by Tom Work, who you know quite well. And in fact, one of the things we were talking about, you did a, webinar, I guess, with him a couple of weeks ago, which I thought was brilliant and interesting. Tell us a little about Tom and your association with him. Yeah. No. I've known Tom for a long time. And Tom Tom wears several hats, n a w r is is one of the main hats. He's also a prolific plugger. On the fermentation, wine blog, and he also does communications. And so I've worked with him in various capacities over the year. And, you know, we I think I think we're both kind of industry observers and and and like to chat about what's going on in the industry. And and he's got a lot going on right now with an AWS. And and, you know, so following that Tennessee line decision, you know, they they've also pursued a litigation strategy And you've actually seen some states and and some circuits actually go seemingly go against what the Supreme Court provided in the Tennessee wine case since and and and then they've tried to appeal that a couple times to the Supreme Court. Unsuccessfully, they don't yet have what's called a circuit split. And and I think that the Supreme Court tea leave readers would would say that's usually the most helpful way to to get a case taken up, but they'd like to have this question settled once and for all. So define that term, circuit split. Oh, yeah. So, like, you know, there's, I think, what, nine circuits around the country that's that are made up of multiple states, where you a case escalates first to a circuit court before it before it gets to the Supreme Court. And, again, I'm not a lawyer. So I'm a little bit out of my depth, but if you have the, an opinion in the first circuit, and an opinion in the ninth circuit, if they're at odds with each other. So the first circuit might say, hey, yes, it does apply, and the ninth circuit might say, no, it does not. Then that's where the Supreme Court might come in and settle that difference. Okay. So just recently, one of the cases, I don't remember which one actually was put before the court. I think it's called Grant Circiarari, but don't quote me either because I'm not a lawyer. But then they chose not to take the case and the significance of that was what? Chicken the can down the road? Or Well, yeah. I I think that yeah. It's kicking the can down the road. They're gonna let the courts play out. I've I've heard people say it may take up to ten years. To actually get back to the Supreme Court because they did just root here this Tennessee wine case a couple years ago. And so what that means is that you have some laws on the books that some might consider to be discriminatory that will that will remain in place, in until this case is is perhaps further clarified by the courts. Well, you're talking like a lawyer. You're doing a good job. Sorry. That's okay. And so today in a more practical vacation, and we're recording this on November eleventh, Iowa, said that they will allow, retailers to ship into Iowa. And that was that was a big change. You need to talk about the significance of that. Jeez. I'm embarrassed to say that. I wasn't on my radar. Really? Yeah. I did not see that news. Well, what tell you, I think it's really significant. Be well, compare Iowa and Idaho. Another to Nevada, and, you know, the Idaho changed. Right. Right. Right. Yeah. So so anytime there's a new state added for retailers, that is kind of a a big deal. I I think that since Grandholm happened in two thousand and five, you've seen wineries just add add add add add add states. Right, and and now they're at forty seven states. Retailers have, in in some ways, gone backwards. Some states have kind of leveled down and and prohibited since since Grand Home, right, have prohibited both out of state retailers and in state retailers to ship. And that's fine as long as it's even. Right. Sure. So the forty seven, meaning that domestic wineries can ship to forty seven states, imported wines, which obviously are not manufactured here, have to go through an importer and importers are not allowed to direct ship. We have to go through the three tier system. So the net net is imported wines are don't fall under the same, laws. In that regard. That is correct. And then we come to reality. And reality is, and if you add Iowa to the number, I think it's now ten states that allow retailer to consumer interstate shipping of wine because you knocked Iowa out a a month or so ago and then, Iowa today. I I think it'd be fifteen because it was at sixteen And then both Idaho and Nevada dropped off. We I'm happy to get into those, but, and then if it if it's the case that Iowa added and and I missed that, then then I think that would take it from fourteen to fifteen state for for retailers. Yep. Okay. So, obviously, there's a disconnect there. But the reality is, and I don't wanna get anybody in trouble. A lot of retailers are shipping to a lot of states who are you know, not cited as states where it is permitted for retailers to ship into. A lot of retailers are shipping to twenty, thirty, forty states. And I don't get the how does that work? Well, you know, I think you see different types of business models. I mean, don't get me wrong. Right? There are some some some outfits that are just shipping illegally, right, to states that would require a license with or that prohibit shipping you know, people shipping where they shouldn't be. There's certainly some of that. I would make the case that that's not as expansive as as, you know, someone make it out to be. But but other companies employ strategies, right, that that leverage in state businesses. Right? So you could if you have a, like, you could ship to the fifteen or or fourteen or fifteen retail states from California, but then if you wanna get into New York, and New York isn't a state that allows inter state shipments from California, you could open a retail store in New York, and you could sell you could move product to that store and sell products from that store through the same website. So it's sometimes you look at a site and you see that list of states and you don't always know exactly how it's working behind the scenes. Right. You have to be pretty specific about who's shipping, what, to who, where, under what license. So For example, one I can't remember everybody's model, but there's a whole bunch fifty shades of gray, I imagine, on whether you have a physical retail store in the state or just a license, whether you are a third party aggregator and facilitator That's the word like Amazon does. They don't actually take ownership of the product. It's just more of an affiliate marketing thing. We've got Gopuff coming into the market now and they're they're with their micro warehouses. So there's all kinds of variations on the theme and a bunch of players in it, the Instacart, and all the rest of that stuff, which kinda changed the landscape a little bit with with such subtleties that it's almost impossible to grasp and, in fact, I found to grasp because I've tried to do that, make an Excel spreadsheet. I'm sure you guys do this all the time, and I'm I'm gonna ask you, yeah, but no, really. So it's very difficult for me to give advice to my clients and what they can and cannot do. And at the end of the day, where I default to is, these these are states where retailers are shipping to. I'm assuming that what they're doing is legal through whatever manner they do it. And if they allow us to, we can do promotions. Through them. And that's a way for my clients' brands to be sold through e commerce. There was also an an instance, you may recall, about five years ago now, where the FedEx and UPS, which are the two common carriers that legally carry and deliver, alcohol, the US Postal Service doesn't do it, and that's under discussion. And I think it might even be included in the Zomnebous Act. That you're not the omnibus. This is the infrastructure act. The omnibus was the one that was three years ago where the where the taxes, unwinds, and spirits, and beer were dramatically reduced. But I digress. So the the point here is so many things are changing at that one time when those common carriers said, you know, we're gonna take a hard line here and we are not going to deliver into states where there's any risk to us. And then they told the retailers they can't do it. And there are a lot of people who had really made e commerce a huge part of their business that were basically shut down, you know, in a heartbeat overnight. Yep. Yes. I I do remember that. And and and that's becoming a big issue. Right. I mean, are we going back to that? Because, I mean, basically, we're back to this, the same situation. Hey, somebody might say either at the state or federal level or TTB or regulatory level. Hey, this is getting out of hand. You guys gotta stop this. And I think what the retailers want, if I can speak for them, just as you say, an even playing field, right, and and and an answer. Can I or can't I and where? I don't wanna run the risk of stepping over the line without knowing where the line is. Yeah. Which is where you guys come in. Right? Sure. Sure. Sure. We can definitely help with that. I mean, I think I let's see. But the couple couple of points that'll try to try to sprinkle in there. So so number one, yes, the carrier issue is is big and important, and we might probably wanna get into fulfillment houses as well. So so what's happening is states are just starting to take a closer look at direct shipping. And they're starting to kind of analyze these reports that they're getting from FedEx and UPS. And what they're trying to do is just determine who the licensee is, right, for all of these packages that are coming into my state. Who's who who's the owner and who's liable and who has to pay the taxes? Who owns the license and who is paying the taxes? Correct. Right? So they're trying to match these up. And then and then if they see something that doesn't look right, see some of the something that doesn't it it looks like a package is coming in without a license, then they'll go to FedEx and UPS and say, Hey, I think this business doesn't have a license. Can you please up shipping, from them, into this state. And so now you see the carriers keeping track of who holds licenses in, in which states, and and they should be blocking for the most part shipment from licensees that do not hold licenses, where a license is required. But then the next level on that is this fulfillment house issue, which is really blowing up right now. It's is and that happened in Tennessee this year where I think it was on the order of sixty, seventy percent of the packages say they're coming from a fulfillment warehouse. That may be located in the state of Tennessee? Well, in in California, for example. Oh, okay. Okay. So fulfillment house in California. Right. Because a lot of California wineries, right, store their their products and and and then these fulfillment houses do the pack and ship. Right, from from their warehouse and the packages look like they're coming from those. Even though that winery that they're shipping on behalf of may hold a valid license in Tennessee and does, in most cases, the agency can't see who that licensee is. Right? So they're looking for additional visibility there. And, you know, in a lot of cases, they've changed their laws to create a license for these fulfillment houses. And then a requirement that the fulfillment house report who's making the shipment. And in other cases, they're they they don't require a license, but they do ask the fulfillment house to report. The whole point of all of it is just to simply make sure that when packages come in, that a, somebody holds a license, b, taxes are paid, and, c, they're following the rules. And that's what Avalara's all about, that it provides the service for these shippers to comply with the law as best they can and as best anybody knows because you guys are kind of the central repository for how to do all this stuff. Yeah. Yeah. Yeah. We're focused on tax and compliance, and and we help we help suppliers mainly, but also marketplaces and retailers and and wholesalers in some cases. But we help in both channels, right, both when products are moving through the three tier system, and there's a set of compliance requirements, when you're moving through the three tier system and in the direct to consumer channel. And that's where it really gets complex in terms of sales and use tax calculation, alcohol tax calculation, filing of these tax, returns, registering products, all that, all the rules associated with it. Those are the the problems that we help solve for for people. Okay. So you used the term marketplaces to find that for me? Yes. It, you know, a fundamental concept in in the world of alcohol is that only licensees can sell. However, you go on to a VAVino or, you know, you know, some of these other marketplaces or delivery apps, and you mentioned Instacart. Right? And in a lot of cases, they don't hold any licenses. So in the eyes of the regulators, those platforms are effectively soliciting sales on behalf of licensees and kind of routing those orders to the the licensees to accept and fulfill. And then the compliance obligation really is primarily on the licensee at that point. So that's what I mean when I say marketplace is is an unlicensed business that's taking orders or facilitating orders on behalf of licensees. Okay. So when you say marketplaces, it's kind of like when I say third party facilitators Yeah. That we used to say delivery within an hour. So further complicating the issue is part of it is interstate shipment and how does that fit under the umbrella of e commerce when e commerce can happen both intra and inter state and depending on how the delivery goes, whether it's done by the retailer himself with one of themselves, with one of their people delivering into a house in a local area, an apartment in a local area, or through a common carrier. Not different sets of Absolutely. I guess they are. Different sets of rules and regulations that apply to each of those. And so that's where some of the refinement in these third party facilitators and marketplaces comes because the way they're structured allows them to do, a certain number. Yeah. Yeah. Absolutely. And I So there's e commerce, and then there's interstate shipment and they're related, but one does not, you know, overarch the other. Yeah. I was just gonna say I think that's an important point. Like, we think about econ e we we tend to use these terms pretty low. Equate them. And they're not. Yeah. Yeah. We we we use these terms loosely. And and to me, e commerce can, you know, in in the world of alcohol, there's really at least two channels underneath that. One would be direct to consumer shipping And and to to me, that's that's more. Typically, from a winery, it's going across state lines. It's your as you mentioned, it's using a FedEx or a UPS, a common carrier, to deliver the package versus, you know, intrastate delivery, which a lot of these businesses and and marketplace apps are using, like, if you look at, like, a drizzly or, you know, an Instacart or whatever, they're they're really making deliveries on behalf of local retailers that have the privilege of delivering within the state or within that geographical territory. Okay. So a lot of the Italian people that I work with find find the whole three tier system complicated. Interestate shipping is too Well, in in the presentation that I did, I I kinda use an umbrella metaphor. You know, here's here's the umbrella, which is the overarching thing, e commerce, and the DTC direct to consumer I define as direct from a domestic winery to a consumer, either inter or in trust state, and try not to use DTC to describe sales from a retailer to a consumer either in a state or us. Now that's my definition. But the problem is that's not everybody else's definition. And so when you say DTC and I think e commerce, we're not necessarily talking the same thing. It takes something that's already confusing and makes it more so when we're trying to make it more understandable. Yeah. And and you and I are in the thick of this, Steve. Right? Like, we we see it and we talk about it all all day long, and we don't even have common definitions. Imagine imagine being a regulator or a legislator, right, and these things get confusing in there. It tends to be a lot of conflation of these different concepts. And that's why I do think over the coming years, you'll probably see some additional legislation to get a little bit clear on on some of these definitions and what's allowed. Yeah. I was I had I had the chance to read some of, the the the I don't know what you would call it. Minutes from whether they're hearing sorry. Minutes from whether they're hearings or a lawsuit or whatever it happens to be. And it is so clear that many of the people who are on the deciding side have no concept of the three tier system and all the legal things that apply and append to that. So it's kinda like the blind leading the blind or the blind leading the clueless. There's a lot of different concepts to keep track of. Right? And and I think you you hear, like, legislators in particular get confused about what is a fulfillment house? What is a marketplace? What is a winery and a retailer? You know, and and all these things that we we use every day isn't apparent necessarily to the general public, maybe to your your clients in Italy and and to the legislators in particular. Well stated. I I'm I'm I I I'm a little bit cut to the heart of it that and and everybody is well meaning because the legislators are looking out for the things that are their responsibility, which is legal compliance, taxes, mostly TTB for making sure that the American populations protected from false advertising and bad product and all that kind of stuff. So one of the things that I've been getting involved in lately is to just to add complexity to complexity is The issue in e commerce, meaning I'm only talking about retailers now using third party facilitators, who owns the data, meaning who owns the relationship with the consumer. And I've always known it was there and it was an issue, but in one of the interviews I did with someone a couple of weeks ago. Actually, it was I won't even name it because I don't wanna get anybody in trouble here. But they were distinguishing between a third party facilitator, which helps sell bottles, and another service where the individual retail store owns the customer relationship. They have the data, and they can then re market to those people. And that helps him build his business. So that becomes really, really significant. And it's, I think, I have found it is overlooked. So I've I in the slide I showed at the at the conference, I put e commerce into, like, six different buckets. Just, you know, to really con confuse everybody. I thought it was simplifying things. But really, in my mind, from a retailer's point of view, there's there's only two buckets. Who owns the data? And if it's the retailer, that implies and infers and confers certain rights and responsibilities. And if it doesn't, then those things change. At the end of the day, I think, if I can speak for you and Tom, the n a w r and the idea of of freeing some of this stuff up, the original one for free the grapes is let us compete. Let the individual retailers. We wanna keep the individual retailers in business and US. They perform a really important service of advising and counseling consumers, you know, I'm having spaghetti. What should I have for, you know, for the wine with that as well as convenience where a individual store in comparison to, an online or a virtual store is differentiated as an inventory. Obviously, there's physical limitation on how many SKUs or bottles can fit into an individual store, and we have the, the, what do they call it, the infinite aisle online the long tail. Can you comment on that? Yeah. Yeah. I I think that's an important issue. Yeah. About who owns the data. And and and it's tough because I think if you think about it, if I if I put the compliance lens on it, right, the and you put yourself in the shoes of the regulators, they think that the licensee, aka, the retailer, is making this sale. Right? And so from their perspective, why would the retailer not own that data? But at the same time, yeah, I I imagine that some of these third party marketers or or marketplaces may put restrictions on what they're able to do in terms of remarketing to these customers. So that's a tricky one. And, yeah, that that may play out in the future. I'd I wouldn't be surprised. Okay. You dodged that one here for me. And so thank you for that. So when, when other complication, okay. So I I have a a client in London, and we were exploring e commerce who can do what. And they couldn't look at that data because the e commerce providers look for your, IP address. And if you're in Connecticut, it only shows you the inventory that's available in Connecticut, which might be a completely different set of items that are available in Colorado, California. And I can see why consumers get, confused, but more importantly upset. Meaning they taste the wine that they've had somewhere, and then they say go to their retail store, no, we don't carry it. They can't order it in their state, and they can't have it delivered, and that gets them all frustrated. That's not cool either. Right. Yeah. No. And you raised an important point earlier, right, which is that when we're talking about these forty seven states that allow wineries to ship, we're talking domestic wineries. And and we're talking in a lot of these states, especially the ones that have changed our past laws recently that they do put a restriction on the making sure that those products were produced by that winery. So what does that mean that imported wines are x excluded. Right? So imported wines just do not have that same level of access. And from a consumer standpoint, yeah, if they're looking to get a direct shipment of imported wine, you're gonna have a really hard time. You're gonna be primarily limited to those states, those fourteen or fifteen states that allow retailers to ship, assuming the importer moves it to a retailer, right, makes that sale through a wholesaler or directly. You're limited to those states, and so it's it's tough sledding right now for imported products. Well, there's one thing that happened that I thought was particularly telling. I don't know if it if people realize what was going on and plan for it to happen, whatever. When, that omnibus bill passed back in two thousand eighteen, I think, in December of two thousand eighteen, where federal excise taxes on wine beer and spirits were dramatically reduced by ninety percent. That didn't get a lot of visibility to the general public, but it changed the financial calculations of everybody in the business, and it freed up quite a bit of margin for those who are able to follow where it was and how do you get a piece of it. But What I thought was particularly interesting, those reduced taxes were applied not only to domestic wineries and spirit producers, distilleries, and breweries, but also imported. That was the first time that one of those laws took into account imported wines and spirits. Do you think that was planned or did was that just something that happened and nobody was paying attention? Oh, man. I don't know if I am an expert on that one in in in terms of how that played out. Let's speculate. Well, I I mean, I know that there's Navi, the the, you know, the the National Association of Beverage importers and and and they're they're well connected and and they certainly have a purpose and and they're they're at the table. Right, in a in a lot of these discussions. And I know that there was quite a bit of collaboration on on that with the Craft Beverization Act. I think that's what it was called. And so so presumably, yeah, importers were at the table and that that they they were included and but but I I I'm speculating. I don't have a lot of background on how that played out. Yeah. Well, I I'm I'm reading into it that there's a crack. It's a little one. Maybe it's just a hairline crack, but at least the the idea is now on the table that and it is that something that can then be pointed to that, okay, this was made and it applied to these people. Why doesn't this do it? Yeah. And and this is where I'm also not an expert. Getting out outside of my depths, but I've heard others make a case that, you know, certain international trade agreements like WTO, right, might might have a an issue with with some of these laws that don't allow for the imported products, but it but I I really shouldn't go there because I'm not an expert. Well, we're all kinda getting into that now. The resultant edge of that with, you know, cutting the, tariffs, punitive tariffs, for the UK and the scotched industry just got hammered. I heard they were down, like, twenty five percent. It was the number I saw, because the taxes were applied just to those things and had nothing to do with the issue at hand, which was, I think that one was Airbus. No. It was the UK thing. So I don't think it was air Airbus. They had another thing that somebody was pissed off at somebody else about. And they said, yeah. So, okay. England. Scotland. Yeah. Let let's put a tax on Scotch. That'll hurt them. In France, so we'll put a tax on why. Yeah. That that that's what'll hurt them. And and then it it kinda just all escalated to not make any sense at all and yet here they were. So they just removed the UK thing. Does that, or the UK punitive tax on, spirits? How does that affect Avilera and how do you guys adapt to changes like that? Well, I mean, first of all, we're we're primarily focused with state issues. State regulatory compliance. And so I I know that this has been the whole tariff issue. It's been a really big issue, especially for groups like the distilled spirits council that that they've been hard at work. And and so it's good to see those get lifted because I know that that was challenging for for them and for for a lot of their members and for just a lot of distilleries around the around the country. And so And people who couldn't get the product they want, and we're now paying, you know, twenty five percent more. Yeah. Yep. Yep. That has been an ongoing challenge. So I think there's a lot of relief in a lot from a lot of, people about those those getting removed. Okay. I'm gonna ask you a question that's related to what we're talking about, but not smack in your wheelhouse or my wheelhouse. We've had COVID made some incredible changes in the industry, particularly in the on premise, but now, you know, on things are not coming back to normal, but they are progressing forward. So we're just today was reported. Inflation was six point eight percent. I don't know what period of time, whether it's a month or something, but it's a significant thing now. We never had to deal with it. We haven't had to deal with it for thirty years. It's gonna have a dramatic as dramatic an impact, I think, on the beverage alcohol industry as the CBMA did in reducing taxes. Do you have any eye ideas? Can you put in your crystal ball and say what impact is inflation going to have in the industry? Oh, man. No. I I I would probably I'm gonna touch that one. I would probably stay away from that. I I'm gonna be light on the economic theory stuff. So, no, I would probably stay away. Well, I will put this into the conversation. I'll ask my own question, and that is I've seen this happen that because of the CBMA drop and because the federal tax is put into the hierarchy, if you will, if you're going down of, you know, here's your x works price at the factory. And here's your, you know, late in price to the importer importer to distributor, distributor, to retailer, and all that. If you lower the number higher up on that chain, it frees up a lot of margin and movement to put things in. Now we've got inflation coming back at the end. There's a lot of people that are, especially exporters that heard about CBMA haven't looked into it, don't know about it, and should be. Yeah. I think it did have a sub financial impact. I am not gonna comment on how the inflation is going to kind of reverse some of the things that that put into place, but Okay. You're really making me working. I'm sorry. I'm sorry. It's okay. It's fine. It's fine. It's fun. I've I had mentioned earlier, I listened to the webinar. You and Tom did a couple of weeks. It was like early October. So I thought it was great. Same kind of thing. You guys tend to agree a lot more, I think. We tend to agree on on quite quite a lot of issues. Yes. Okay. So now put your okay. Here's what I think as the GM of an important part of this whole equation. Out of what we just talked about, somebody listening. What what's the most important thing that we talked about that they can take, action on to improve their business. Well, I think that this marketplace issue is is is pretty big. Right? I I do think that you're seeing massive investment when you look at Uber. Just saw minibar delivery got bought. They didn't say how much, but, you know, I'm sure it had at least six zeros. Yeah. Yep. Yep. Minibar reserve bar. You saw Uber acquired drizzly. You saw Vivino raise lots of money. I mean, there's been a quite a bit of, investment coming in, and and it does feel like that's kind of shifting where where some of these platforms are going to start to become a little bit more dominant. And and I think the industry is gonna have a little bit of catch up to do in terms of how how regulation works. And one thing that we talk that we get a lot of questions about in our businesses, these market there was another Supreme Court case wayfair versus South Dakota that changed a lot of things related to sales tax collection. And now marketplaces in in almost all states have an obligation to collect sales tax, above a certain threshold. And so how that kind of impacts the alcohol regulation and how the money flows and who pays taxes is getting a little bit complicated and hard to understand for people. And so we've been making a point of of of getting a lot of blog posts and webinars, and we're gonna actually be doing one on this particular topic in December, I believe, to just help educate both marketplaces and licensees that are participating in marketplaces about how to do this compliantly without putting your business at risk. Cool. So why don't you give us your email address to our listeners where they can go to participate or listen in on on these webinars and maybe hear some of the ones like the one you you did with Tom last month? Yeah. Sure. Absolutely. My my email is jeff dot carol at avallero dot com, j e f f dot c a r r o l l at avallero dot com, and and avallero dot com. We've got, you know, blog and webinar resources and all kinds of, you know, tools that can be used to help understand this stuff. So so that's a great destination. It's just kinda going to our website and browsing those tools. And that's my recommendation to a lot of people. And there's so much to unpack. You'll never understand at all. But at least you'll be able to get straight answers of the most current information the legislation and how things are done there. And that's a big challenge because if you look it up in Google, it might be something from three months ago. Well, you know, yesterday, you couldn't ship to Iowa. Yeah. And then and then another thing I would say is we have a partnership with Wine Institute, and and we kind of, co host and maintain this compliance rules portal. And that's a Wine Institute dot compliance rules dot org. And that's where you're gonna see state by state breakdowns of all the rules, how to get licensed, the the returns that you need to file, and any developments. Right? Anytime there's a change to a state, you're gonna have a state alert there, and that's a free resource. And so that is for wineries. Right? But it's got a ton of information on there about how to comply and what the rules are and all of that stuff. It's a great resource. Good. Say it again. What what what was it? Wine institute dot compliance rules dot org, or you can just get there from wine institute dot org. Wine Institute. Yeah. I've I I visit a couple of times. I have some really good maps that list, say state, sales taxes and, you know, someone, where what states you can sell wine in supermarkets. That's always a lot of question and a point of an issue of of interest from a lot of our export producers because, you know, in some countries like UK, most of the wine is coming through supermarkets. That's not the case in the US and specifically. It's illegal in New York. So that's why I try and tell people, look, there's things you can do in California that are illegal in New York and vice versa. It's a state based thing. This is not one country. It's fifty two different regulatory entities. That's right. Exactly right. That's reality. And everyone listening, that's what we have to deal with. Okay. Jeff, I wanna thank you for participating and recording this with me. It's been illuminating, and we probably made a couple of mistakes there. So I, I'm gonna give a disclaimer here. We're not lawyers. We're just talking about stuff that we read and that's interesting related to online business in the US. Steve, thanks so much for having me. It's been a real pleasure. It's it's always a pleasure talking to you. So that was Jeff Carroll GM of Avilera. We'll see you soon on the circuit. Sounds great. Thanks so much. This is Steve Ray. Thanks again for listening. On behalf of the Italian wine podcast. Hi, guys. I'm Joy Livingston, and I am the producer of the Italian wine podcast. Thank you for listening. We are the only wine podcast that has been doing a daily show since the pandemic began. This is a labor of love and we are committed to bringing you free content every day. Of course, this takes time and effort not to mention the cost of equipment, production, and editing. 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