Wine Industry Kerfuffle Masks Mighty Political Failure

Press releases are interesting tools. They are, even within the wine industry, almost in every case a matter self-aggrandizement. One rarely sees a company issue a release informing the media that “XYZ Winery Sales Suck” or “Administrative Chaos Reigns at XYZ Wine Company”. Rather, press releases are almost always issued to point the media and readers to a virtual smiley face the company issuing the press release has drawn.

What follows is a tale of one such smiley face and the $9.6 million and a disastrous failure it is meant to obscure.

It was a beautiful day in paradise. Sitting at a comfortable table at the Makai Golf Club in Kauai,  sipping a beer in balmy 85 degree weather after finishing a fine round of golf, I did something I hadn’t done since arriving on the Island nearly a week earlier. I looked at my email. Near the top of the mail client was an email from a friend alerting me to a weird little kerfuffle taking place in the wine industry. My friend alerted me to the fact that I was “missing this while on vacation”.

Of course, this was part of the point of being on vacation, but I succumbed and hit the link provided in the email. What I found was a public disagreement between Craig Wolf of the Wine & Spirit Wholesalers Association (WSWA) and Lew Perdue, publisher of Wine Industry Insight.

Apparently, WSWA, the powerful national organization of wine and spirit wholesalers located in Washington, DC had issued a press release touting the fact that Wine & Spirits Wholesalers of America PAC Achieves 95% Success Rate in  [Nov.] Election” Lew Perdue, who aggregates wine news on a daily basis and showcases it at Wine industry Insight took the release and, as is his occasional want to do, re-wrote the headline this way, ““WSWA Millions Buy 95% Success Rate in Elections”.

Lew Perdue sometimes re-writes the headlines of articles, press releases and blog posts that he highlights on his popular news service. He links to the article, news release or blog posts where readers can read the original, but his re-writing of the headline is almost always done to give better clarity to what the story or press release is all about. He’s an old newsman and a professor of journalism.

However, this re-write led to a response from Craig Wolf. In an “Open Letter to Wine Industry Insight Subscribers”, Mr. Wolf accused Mr. Perdue of “misleading Wine Industry Insight Subscribers About WSWA’s Successful Grassroots Activism.” Mr. Perdue duly provided the content of Mr. Wolf’s letter to his readers.

Predictably, Mr Perdue provided a counter-response to Mr. Wolf’s letter in which he explained his re-write of the WSWA press release headline by noting that the original headline “was too long and awkwardly phrased” and did not comport with his own view of the nature of campaign contributions.

This is what I “was missing” while hitting little white balls and cavorting with my beautiful wife in Kauai.

The episode, while unusual, isn’t really that interesting nor that notable…until you start thinking about the purpose of the original WSWA press release.

Why would WSWA announce the success rate of its political giving? Why would it so publicly note that 95% of those candidates to whom it gave campaign contributions won election? Over the past four years, going back to 2009, it never made such an announcement before about its political success rate and it has been giving money contributions to candidates for many years. Furthermore, achieving a high success rate in helping candidates get elected is no difficult task. Just put a list of incumbents seeking re-election on the wall, start throwing darts, and the odds are overwhelming that the names your darts hit will be re-elected to office. Incumbents almost always win re-election.

Yet this year, WSWA chose to publicly tout its rather ordinary achievement in a press release that everyone in America could read. The press release from this national association of wine wholesalers was the equivalent of a national association of wineries issuing a press release announcing that “wineries make wine from grapes in 2012.” Why issue this press release?

The answer is $9.6 million and a colossal failure.

The WSWA-PAC, which is touted as having a 95% success rate, is funded by members of the Wine & Spirit Wholesalers of America—meaning, individual wine and spirit wholesalers across the country. During this most recent election cycle the WSWA-PAC will have convinced its members to contribute $2,000,000 to its Political Action Committee, which is the entity that provides campaign contributions to candidates. WSWA-PAC will have, by the end of this year, spent the vast majority of that $2 million. According to The Center for Responsive Politics, $1.5 million will have been spent on campaign contributions over the past two years, the majority of it given in 2012 in the run up to the recent election.

During this same period, including 2011, WSWA will have spent an additional $2.1 million on lobbying in Washington, DC.

What these numbers and what the press release touting the 95% success rate in helping elect politicians does not account for is a staggering $9.6 million dollars WSWA spent financing the opposition to Washington State’s 2011 ballot initiative that privatized spirits sales—which passed. Let me put that another way. WSWA spent nearly $10 million on a single issue in 2011 and got nothing for it. This failure begs the questions, what did donors to the WSWA-PAC think of this monumental and hugely expensive failure?

But wait, there is more.

Also in 2011, WSWA had its eye on a significant prize in Washington, DC: The passage of H.R. 1161—The Care Act. If passed, this bill would have turned back the clock on direct to consumer wine shipping in the United States by authorizing states to discriminate against direct shippers of wine through the passage of laws that prohibited out-of-state shippers from sending wine to consumers in the state. Additionally, it would have taken the nearly unprecedented step of stripping every single American wine store of its constitutional protections against state-based discrimination by providing that the Commerce Clause of the U.S. Constitution (Article 1, Section 8) would no longer apply to wine stores and wine retailers.

WSWA spent hundreds of thousands of dollars attempting to pass this bill into law on Capital Hill. They failed. In early 2012, WSWA announced that H.R. 1161 was off the table and they would no longer look for co-sponsors or passage of the bill.

In this context of disastrous failure and huge sums of money wasted, the recent WSWA press release announcing the success of the Wine & Spirit Wholesalers of America’s Political Action Committee begins to take on a different hue. The press release serves as a reminder to members of WSWA and to those that contributed millions of dollars to wasted efforts that the gang that couldn’t shoot straight can still hit a target, even if that target is pretty large and un-missable….helping re-elect incumbents.

After what might have been the most disastrous year in WSWA’s history, the organization was looking for something—anything—to tout as a success. They needed a smiley face.

The kerfuffle between WSWA and Wine Industry Insight over the meaning of the press release seems largely inconsequential to the reason behind issuing the release in the first place: finding something to celebrate over at WSWA. Yet it is notable that in the past, WSWA was unlikely to either issue a release touting its electoral success or to respond to the kind of poke that Perdue delivered with his re-writing of the press release headline.

What we are likely seeing here is the influence of a new communications team at WSWA.

In October, WSWA announced that political communications veteran Jeffrey Solsby had been hired as the new Vice President Communications and Public Affairs. The announcement noted that WSWA’s communications and public affairs department was being “re-launched” with an effort “to refocus and revitalize WSWA’s internal communications, issues advocacy, rapid response, events and membership marketing, digital communications and media relations efforts.” It was explained that the re-launch would come after “a comprehensive strategic review and audit” of its communications efforts and would lead to ” implementing a new association communications program in the weeks ahead.”

It would have been difficult for new VP Solsby not to look at the results of that “audit” and conclude that WSWA’s reputation had taken a beating in the previous year as well as in 2012 after the announcement that its effort to stall direct wine shipping via H.R. 1161 had failed so miserably. Additionally, it’s no secret that WSWA took a beating across the media spectrum for its blatant and self-serving attempt to derail direct shipping by going after wineries and retailers in such a public way. Anyone could see that some form of image rehabilitation was necessary.

The release of the 95% success rate for campaign contributions by WSWA seems to be along those lines, if not an effort to reassure donors to its PAC that all is ok. The unusual response to Lew Perdue’s re-writing of its press release headline may be evidence that the new communications team at WSWA is on a track to being more assertive in its media relations.

Why does all this insider baseball stuff matter? It matters because an invigorated WSWA is bad for the wine industry and bad for wine consumers. This organization has consistently backed initiatives that make access to wine products more difficult for wine consumers, that make access to markets for wineries and retailers more difficult and that shield a system of wine sales and distribution from needed reforms. It’ important to understand how the politics of wine work and the strategies that propel the industry.

Wine & Spirit Wholesalers of America is a powerful organization coming off a series of failures. How they will respond to those failures and the strategies they will employ to move beyond them are important to understand if the industry is going to be prepared for the defend itself against what will inevitably be a new set of attacks.


11 Responses

  1. larry schaffer - November 27, 2012

    Tom,

    Thanks to you – and to Lew – from bringing this tidbit to light. It illustrates to me that every story has multiple angles to it, especially if you are able to dig below the surface a bit.

    I appreciate your ‘objective’ writing on this, and the fact checking – kudos!

    Keep up the great work and keep informing our industry of what is going on in corners we may be looking at very often.

    Cheers!

  2. Charlie Olken - November 27, 2012

    Thanks, Tom. Great article.

    You sort of glossed over the fact that these folks backed incumbents in safe seats in order to achieve their so-called 95% success rate. In point of fact, backing stone cold, guaranteed winners is indicative of nothing if not of a useless expenditure in that it does nothing to expand their brand.

    We know they aren’t going away, and the emergence of a consumer-based organization to speak for the people who make their industry possible–the consumers–is long overdue and will take on much harder fights than backing shoo-ins and claiming victory.

  3. Carol Doolittle - November 27, 2012

    I wish an investigative reporter would expose the failures of allowing wine to be sold in grocery stores in New York and TN. Probably WSWA is more behind this than we small wineries (who support wine being sold in food stores) can imagine!

  4. Thomas Pellechia - November 28, 2012

    Carol,

    For a national newspaper to become interested or for an investigative reporter to interest a national newspaper in the issue of wine in grocery stores, you have to build nationwide consumer activism first. Right now, it isn’t much of a story to the rest of the nation and to the world.

    The other avenue is to show proof of corruption on a large financial scale involved.

  5. Mike Dunne - November 28, 2012

    Thanks for the comprehensive alert, Tom. And Thomas, the issue of wine in grocery stores is largely local, and to right restrictions in New York and Tennessee will rely primarily on local organization and local exposure, not national. Wine consumers in California aren’t going to be much interested in participating in a national campaign on behalf of wine consumers along the Atlantic seaboard. Fortunately for New Yorkers, they have a newspaper both national and local that could be encouraged to pursue the matter.

  6. Thomas Pellechia - November 28, 2012

    Mike,

    i live in the Finger Lakes, am for wine in grocery stores, and write freelance for three separate local newspapers–not one of them will pay for investigative reporting on the issue.

    I believe for it to make the NY Times buy an expensive investigation, the issue must meet larger, wider requirements. As you say, and as I have alluded to, who cares outside of NY or TN?

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