Someone Has To Tell The Truth

Posted by Tom Wark on May 3, 2005

I‘ve been waiting a couple of weeks to respond to these set of comments by Juanita Duggan. I figured  finally that the best way to do so was simply comment with the ugly truth.

You can get more of the Ugly Truth about Juanita Duggan here.

Prepared Remarks for Juanita D. Duggan
              President and CEO, Wine & Spirit Wholesalers Association and strongest public
proponents of stopping all direct shipment of wine to consumers
at the2005 WSWA Annual Convention and Exposition
              April 11, 2005, Orlando

WITH COMMENTARY BY FERMENTATIONS (IN ITALICS)

            

Let me ask you the same question I asked a roomful of police chiefs in Albuquerque last year: What would you do if you saw a guy parked near a school with his trunk open, putting bottles of alcohol in brown paper bags, and handing them out to kids? Their answer – lock him up, of course. But you can only lock him up if you can find him. And chances are you can’t find him if he’s selling that same alcohol on the Internet.
Actually, if the wholesalers saw this happening they would like file a lawsuit since the guy handing out alcohol to kids didn’t have a license and was infringing on their market
            

As an industry, we have always understood our moral obligation to ensure that this sort of thing does not happen – that we know who is selling what to whom, in what quantity, and that alcohol is not put into the hands of people who are not supposed to drink. It’s the right thing to do.
This goes a long way toward explaining why most of the alcohol that kids get their hands on has come from liquor stores where it came directly off wholesalers’ trucks.            

And how do we do this? By controlling distribution 
and by requiring face-to-face transactions where IDs are checked by someone licensed to sell alcohol at retail. Controlling access to alcohol is our moral obligation.
I’m pretty sure what Juanita meant to say is "controlling the market for alcohol distribution is our moral and financial obligation"

That’s why you, the members of WSWA, have made an enormous investment in this message.
That investment in stopping direct shipment of wine to consumers of legal age comes to the tune of over $1 Million in campaign donations and hiring lobbyists who will work for anyone with a buck.

You have recognized the need to take a stand because the issue before the Supreme Court, before state capitals and before the industry is one of morality. Again – it’s the right thing to do.
Does anyone reading this actually believe that the Wine & Spirit Wholesalers Association would spend over $1 Million on a moral crusade? Or does it seem more likely that this money is an investment in the future of their business?

It is a stark choice between regulated versus completely unregulated sales of alcohol. It is not about the ease of a faceless transaction or expediency for the consumer.
This doesn’t explain why Juanita is on the Advisory Board of New Vine Logistics, and company in the business of sending wine direct to the consumer through faceless transactions. I wonder how much money is in it for her and her cronies?

It is almost unthinkable that anyone would advocate for unregulated sales of alcohol. Yet that is the very question before the Supreme Court. And when the case was argued, the justices showed an immediate understanding of what is at stake.
Indeed they did. They brushed aside the vast majority of the arguments made by the wholesalers’ shills who sullied the Supreme Court of the United Sates with their presence there on behalf of the hypocritical wholesalers.

Justice Kennedy told lawyers arguing for the wineries,"The rationale is sweeping." His quote says it all: "I just don’t know if the in-state licensure system, which is the cornerstone of the three-tier distribution system, can survive under your rationale."
You know in his heart of hearts Justice Kennedy was thinking, "God, we can only hope it doesn’t"

Regardless of what the Supreme Court decides, the moral questions surrounding our industry transcend any specific outcome.
Translation: when they rule against us we’ll spend even more money at the state level to convince money grabbing legislators to ban all direct shipment.

WSWA stands firmly on the moral high ground. So do the American people.
It’s doubtful that Juanita Duggan could identify the moral high ground if it she were sliding down its slippery slope.

Consider the recent presidential election that turned on the question of values and morality. Voters made it very clear they want to be able to protect their families from some elements of American culture. Just as they always have, they once again validated the rationale for controlling alcohol.Is Juanita making a comment on Gay Marriage? Or did she see a debate between Bush and Kerry on the issue of direct shipping that no one else did?            

Commerce has a morality. Each industry conducting commerce has its own morality. It’s not just dollars changing hands and walking away with a profit. There’s a choice to be made between moral and immoral behavior.
I wonder what form of commercial morality Juanita held strong to when she was shilling for the cigarette industry before going to work for the alcohol wholesalers?            

In our industry, our moral center is controlling access to alcohol. And wholesalers are the essential element of that control.
Perhaps the first truthful words she’s uttered in this speech. It is clear that the wholesalers believe it is their moral imperative to control the wine sales in America. Why else would they be so against the ability of an adult in New York to call a winery in California and buy a bottle of wine they can’t get because no wholesaler in New York will sell it simply because there’s no money in it for them?            

Now this may be counterintuitive for other industries, but alcohol is different. The fact is the economics of the sale and distribution of alcohol in the United States derive from our unique moral legacy.
It is also counterintuitive to the Constitution of the United States
            

If we depart from that moral legacy, we lose our legitimacy.
That horse has left the barn.

That legitimacy is the result of the American public weighing carefully the risks posed by easy access to alcohol versus the benefits. The system makes perfect sense. It’s the right thing to do.
The system does make perfect sense to a wholesaler and a wholesaler organization that is working as hard as as possible and spending millions of dollars to create and protect monopolies.
            

And that’s precisely why we need to preserve it.It’s not sales or margins that are at stake. It’s our moral credibility.Divorcing ourselves from the moral center is a recipe for disaster.
Again she gets it wrong. It is precisely sales and margins that are at stake in the battle over direct shipping. Why else would they spend over $1 Million on campaign contributions to any one who would take their money, on lobbyists and lawyers? Moral Credibility?

For some industries, disaster comes in the form of the trial lawyer. Here too, the three-tier system is our best defense. As you know, a class action suit against suppliers in California was recently dismissed. Part of the rationale was that our regulatory system prevents suppliers from selling to the public. It is nothing less than our industry’s liability protection. I ask you… what is the protection for a supplier who sells and delivers directly to a consumer, particularly to a minor?
Well, that liability is their license to do business in the state they sold it to a minor.

It is a privilege to represent you. You are right to believe in this. The people who stood on this stage are evidence of just how deeply rooted the support for this notion is in our country.
You can buy anything in America…even support for a clearly unconstitutional, hypocritical, anti-consumer, self serving position on shipping wine direct to the consumer.

The public supports controls on alcohol access and the public expects it. It’s the right thing to do.
She’s right. That’s exactly why such controls are in place and working perfectly well in states that allow direct shipping of wine to consumers.

It is not always easy to stand up for what you believe in the face of challenge. But in the end, our message will prevail if we stay true to our moral center.
This is very unlikely.