Worcester Business Journal

wbjournal.com | August 21, 2023 | Worcester Business Journal 19 By Mark Borenstein Mark Borenstein is a real estate attorney with Worcester law firm Bowditch, who counsels within the food and beverage industry, representing breweries, wineries, distilleries, and restaurants. Contact him at mborenstein@bowditch.com. Massachusetts farmer breweries are often looking for new ways to increase their appeal to customers. One option is to convert their farmer brewery license to a pub brewery license to provide more alcoholic beverage options in their taprooms. Here are 10 considerations. 10) Pour something stronger. Pub breweries may pour all types of alcoholic beverages produced by third parties while farmer breweries are only able to pour malt beverages made by or for them. 9) Multiple manufacturing licenses. Farmer breweries wanting to sell all alcoholic beverages but do not want to convert to a pub brewery will need to obtain additional time-consuming and complicated federal, state, and local approvals. 8) Self-distro. Pub breweries may only distribute through a wholesaler. Farmer breweries may self-distribute up to 50,000 gallons per year. 7) To-go sales limitations. Pub breweries' to-go sales are limited to two gallons of beer per transac- tion. Farmer breweries have no limit. 6. Additional beers on tap. Pub breweries may pour beers produced by other breweries, provided no less than 50% of all beer sold by the pub brew- ery is produced on the pub brewery's premises. Farmer breweries may only pour their beer. 5) Pouring license availability. Pub breweries are required to apply for a pouring license for on-prem- ises consumption, which may not be available due to limits on the number of such licenses. Farmer breweries are eligible for a special type of pouring permit not limited in number. 4) Out-of-state Restrictions. Pub breweries are prohibited from holding certain licenses in states outside of Massachusetts. Farmer breweries with operations outside of Massachusetts should consid- er these restrictions to determine if they are eligible to apply for a pub brewery license. 3) No changes to federal approval. Farmer brew- eries seeking to become pub breweries do not need to amend their existing federal notice. 2) License fees. Farmer breweries and pub brew- eries pay an annual fee based on barrelage. Pub breweries pay $1,000-$3,000 per year while farmer breweries pay $22-$110 per year. 1) ABCC can help. The Massachusetts Alcoholic Beverages Control Commission will allow a farmer brewery to maintain its existing licenses while it applies for its new licenses, so that there is no down time in operations. Cheers to that! K N O W H O W SECURE Act 2.0 and its impact on retirement accounts BY SUSAN SHALHOUB Special to WBJ C ompetition comes in three main forms: Direct competi- tion, where competitors offer a product that addresses the same need; indirect competition, where companies sell the same product with different purposes, such as a real estate company working with residential clients and a realty office serving commercial clients; and replacement competition, where different products in the marketplace could threaten to replace products you sell to customers. A company produc- ing nicotine gum may be a replacement competitor to a company producing cigarettes, for example. Here are ways to tackle competition. More specifically define the brand. By better aligning the brand's image with the values and interests of your target demographic, you will better distin- guish yourself from competitors. "For instance, many winter coats keep people warm, but when buying one, consumers might first shop with brands that match their interests like snowboarding, fashion, or hiking," says Autumn Joyce at CultivateAdvisors.com. Another tip: Represent groups other companies may ignore. Find stellar employees. ey will make a lasting impression on your customers, says the editorial team at Indeed. Efforts should go into not only recruiting great talent, but retaining great talent. Your employees will play a direct role in the perception of your business. For example, do you have a compensation structure that's truly unique and attractive compared to your competitors? ese individuals, remem- ber, will uphold the vision on which the organization is built. Provide the most value. Ways to increase value are many, Samuel imothy of OneIMS tells Forbes. ey include doing more for the same price, better service, a better product, or part- nering with other companies to bring better products and services. "Bringing value could also mean niching down to serve a subset of the saturated market if you notice the submarket is under- served and competition is near nonexis- tent," he notes. "If you do it right, you'll one day grow to take over a bigger piece of the market." 10 THINGS I know about... ... Pub brewery conversions T A C K L I N G C O M P E T I T I O N Nicholas J. Colantuono, a resident of Westborough, is with Franklin retirement and investment firm Johnson Brunetti. BY NICHOLAS J. COLANTUONO Special to WBJ P lanning for retirement takes careful consideration, and today between stock market volatility, the ambiguous future of several banking institutions, and fast-rising inflation, those who are soon to be or in retirement should take advantage of every opportunity to make their hard- earned money last. In response to financial burdens resulting from the COVID-19 pandemic, subsequent layoffs, and an upsurge in early retirements, the Internal Revenue Service signed into law the Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0 late last year. e bottom line is due to a reduction in household incomes coupled with an increase in the cost of our day-to-day lives, Americans were taking money out of their retirement accounts to cover the difference, placing the retirement system on shaky grounds. While SECURE Act 2.0 contains dozens of provisions specific to helping strengthen the retirement system, perhaps none is more impactful than the delay in taking the minimum distribution from 401(k) and IRA accounts. As of Jan. 1, that age increased to 73 (from 72) and will further increase to age 75 starting in 2033. As such, individuals have additional time to delay taking withdrawal of deferred savings from their retirement accounts, which brings up an eye-opening point. While most retirees know distributions from retirement accounts are taxable as income, many are shocked to see the impact that those taxable distributions can have on their other retirement benefits, such as Social Security and Medicare. It cannot be overstated enough: Every dollar taken out of a retirement account is considered income and therefore taxable at the state and federal level. is could affect the take home on your Social Security, your capital gains tax rate, and your Medicare premiums in retirement. SECURE Act 2.0 does away with the so-called stretch IRA, a vehicle for IRA beneficiaries to stretch distributions from an inherited IRA over their lifetimes. If an IRA is le to someone other than a surviving spouse, or a beneficiary within 10 years of age of the decedent, that beneficiary must withdraw 100% of the funds within 10 years of the original holder's date of death and pay state and federal income tax on the distributions along the way. e result of this change is a big tax hit to heirs and increased tax revenue to the IRS. So, word to the wise, IRAs are the least tax efficient accounts to leave to beneficiaries. Another meaningful change allows those with a 529 college savings plan to transfer unused funds into a Roth IRA in the same beneficiary's name without incurring taxes or penalties on the rollover. ese rollovers are limited to a lifetime total of $35,000 and require the 529 plan must have been open for more than 15 years. Ultimately, when planning for retirement, it's important to focus on longevity and factor in both anticipated and unforeseen issues, such as medical costs, a downturn in the economy, the need to financially assist family members, etc. e imperative is to earmark some funds for growth, while building a financial safety net that may include cash, CDs, money market funds, and/or insured vehicles like fixed and fixed-indexed annuities. W W W

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