The $124 Million Wine Fraud
“We can’t support that bill and it doesn’t matter that it’s a good bill for our members. If we do, the wholesalers will kill all the bills we are looking to pass this year.”
This response, from the head of a wine industry association, is not unique. That is to say, I’ve heard it said before; every year I hear it said; it gets blurted out by wine industry associations of all types in many states.
The middlemen box-movers of the alcohol industry are likely very pleased when they hear tell of such statements. It means their campaign contributions to lawmakers are doing the job they were meant to do. Ever wonder just how much money booze wholesalers give to politicians?
According to the Institute for Money in State Politics, since 2006 through 2016, booze wholesalers have given just over $124 million dollars in campaign contributions — Just to STATE-based political campaigns. Compare that to how much money was given to state political campaigns by alcohol producers in the same time period: $20.5 million — and half of that came from three entities: Diageo, The California Wine Institute and Gallo.
The massive amount of donations by booze box movers isn’t just a means of obtaining outsized influence. It’s a hedge against having to tell the truth. Too often, sensible bills reforming the archaic and outdated three-tier system and other alcohol related laws never get even a hearing after the wholesalers visit the chairmen of committees and tell them, “No Hearing!” As a result, wholesalers are not forced to make a public case for their self-serving, protectionist and discriminatory policy positions. And that’s important because their principled arguments always boil down the same thing: “we don’t want to work, we want protection having to earn our place in the system. Please don’t make us work.”
Occasionally, the chairmen of a House or Senate committee is not influenced by wholesaler money and hearings on sensible bills occur. This is when it really gets funny. Every time a wholesaler or their representative opens their mouth to the media or to a panel of lawmakers at a committee hearing they end up making the most outlandish claims about what a direct shipping bill will result in or why producers ought not have the right sell their own products to retailers or restaurants.
The other day in Connecticut, the head of the state’s wholesaler association claimed that if out-of-state retailers were allowed to ship wine directly to consumers, you’d have massive amounts of Jack Daniels flowing over the border. I was watching the hearing and thought to myself, that’s absolutely absurd. Why not just go down to the corner and buy it rather than overpaying due to the shipping costs? Then I realized the proper response was, “So what?” But to the wholesaler representative testifying, the idea that a consumer didn’t buy their wine, let alone their Jack Daniels, from a retailer that obtained it from a Connecticut wholesaler was akin to the apocalypse.
There are a number of bills in states across the country right now that in one way or another reform the Three Tier System or make access to alcohol simpler for consumers. Many of them won’t get a committee hearing because wholesalers will make demands on those that control whether or not a hearing happens. The only way to combat this attempt to prevent wholesalers from embarrassing themselves in public when they are forced to make a case for their own economic protection is sunshine.
Consumers need to pick up the phone and call committee chairs and their state representatives and demand a hearing on these bills. The media needs to be informed of the bills and they need to inform the public about them. It is the only way to combat the hypocritical, anti-social antics of the alcohol box movers.
Remember, $124 Million dollars can’t be washed out by exposure to the light. But its impact can fade.
Untangling the three tier system, aka “regulation”, requires one to believe the idea of free trade out benefits the idea that certain legal vices need to be controlled by the same society they are intended for. The argument itself gets tangled up by self interests. Although I admire and cheer your long campaign, I’m afraid the box movers are going to complicate the argument by adding legal marijuana into the discussion. We all know they are moving there now. I’ve heard that a former Fetzer vineyard in Redwood Valley is being sold to convert it to a cannabis operation. Will the Sauvignon Blanc have the traditional aromas of cut grass or will the grass have a delightful citrus smell. Either way, no one is giving up control anytime soon.