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Questions about the actual or mere potential payment of slotting fees hung over discussions about convergence between alc and non-alc bev categories and competition from adjacent categories like hemp bevs during discussions at the annual conference of the Natl Conference of State Liquor Administrators earlier this wk in New Orleans. Legally, hemp bev marketers are "not restricted by the same set of rules" that bar trade practices like slotting fees, "not to mention the tax implications and the regulatory regimes we all follow," Wine Institute prexy/CEO Steve Gross commented. As long as that's the case, it's "not a level playing field out there," in his view. And retailers will keep giving space to those brands "as long as they're willing to pay slotting fees and we're not" allowed to, he reasons. Major hemp bev brands may not actually be paying for space at retail, our sibling newsletter Insights Express noted yesterday in reporting on issue. But that doesn't mean certain retailers haven't asked or pressed for slotting fees to stock those products. And even the possibility of legal slotting fees for a product category that competes with alcohol for shelf space, if not consumer purchases, remains a critical sticking point for many industry members and advocates. They pose a competitive threat that can also be seen as a slippery slope worth avoiding by many.Slotting fees may be more common in other industry-adjacent NA products, whether traditional NA categories like energy drinks and mixers or closer-aligned innovations like NA beer and hopwater. If sold by a company that doesn't sell any alc products, there may not be a legal issue even if competitive questions remain. Regulatory issues get stickier as alc bev makers and distributors increasingly sell these products, atty Brian Howie explained during a separate panel discussion at NCSLA.Rehash of Issues as Crossover Bev Space Takes New Shapes Recall, it was at NCSLA's annual conference a few yrs ago where regulators and industry members unpacked various concerns about co-branded crossover products including issues of confusion and appeal to children. The flashpoint at that time was Pepsi's launch of Hard Mtn Dew with Boston Beer. That brand and others mostly did not grow into the major scale players some hoped or feared they would. Concerns about slotting fees remain, tho, as the notion of a "crossover product" has morphed.Consider traditional NA bevs sold by alc bev makers, Brian invited. On beer side, Anheuser-Busch now sells Phorm Energy and Molson Coors has Fever-Tree mixers, Naked Life mocktails and Zoa Energy, just for starters. Plenty of brewers big and small sell hopwaters and NA beers. But NA bevcos "are able to engage in promotional activities at retail" to support competitive products that alc bevcos are "forbidden from engaging in," Brian reminded. That puts them "at a disadvantage," he said, recalling Steve's comments about hemp bevs earlier in the day. And that may be putting it lightly. When playing in those categories, slotting fees aren't necessarily a competitive lever to pull if you can. Many view them as essential table stakes.State Guidance Hard to Find, Issues Tuff to Untangle Some state regulatory agencies offer guidance about whether alc bev producers or distributors can offer things of value to support their non-alc offerings, Brian explained. But most are "completely silent on the issue." He urged "more clarity" from states, since "I don't think we're going to see less of this," he said, but "more."And it isn't always easy for state regulators to parse the complicated issues at play and get to the bottom of figuring out if alc bev players are giving things of value to retailers, for instance. To determine whether promo activity for a cobranded product violates state law, regulators might need to closely examine the contract between an alc bev manufacturer and the NA brand owner, Washington State's Nicola Reid explained. "Cross-promotional types of activities" like holiday displays of whiskey with glassware or sampling programs that "mix a soda with a spirits" product are fairly common and generally allowable. However, paying for the non-alc space in a shared display of both NA and alc bevs gets complicated, especially if both are sold by "the same entity." If a "retailer is receiving large sums of money to place your non-alcoholic product," this regulator sees it as "unreasonable to think there isn't some undue influence" also encouraging the sale of the alc bev product.

POLICY: Convergence & Competition Heat Up Slotting Fee Questions: Hemp, Crossover Bev Concerns at NCSLA

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