Wine Wholesalers Have a Good Cry

It appears the wine & beer wholesalers in Illinois are concerned they are being portrayed as the "Bad Guys" in legislative battle there that could lead to many of the state’s wineries going out of business if the wholesalers have their way.

Say it with me…."Awwwwwwwwwwwwwwwww"

Jim Rinella, president of Rinella Distributing of Quincy, claims that recent rules allow out of state wineries to ship to Illinois consumers and that there is no guarantee that these wineries would pay the taxes that are due on such sales.

To put it bluntly, Mr. Rinella is full of it. California wineries have been able to ship wine to Illinois for years under reciprocity agreements that were in place between the states. Nothing has changed in that regard. What’s changed is that the wholesalers have learned that recent court decisions dictate that states may no longer allow in-state wineries to sell to RETAILERS and RESTAURANTS, while out-of-state wineries are prohibited from this. And that’s why the Illinois wholesalers are trying to use their influence, gained via campaign contributions, to stop Illinois wineries from selling directly to RETAILERS and RESTAURANTS. If they allow that, then they must allow out-of-state wineries to do the same.

Meanwhile, you’ve got representative Lou Lang of Illinois carrying the wholesalers’ water on this attempt to kill the Illinois wine industry. Lang introduced the bill that would stop Illinois wineries from "self distribution" and force them to use wholesalers. Yet when I asked Rep. Lang if there was any provision that would force wholesalers to represent wineries, since they would no longer be able to represent themselves, he stuttered and said "I believe that has been discussed." Of course, Lang’s bill has not been amended to assure this occurs. And why would it, the wholesalers have no desire to be forced to do anything.

And we are supposed to cry for poor Jim Rinella who is bothered the wholesalers are being called the "bad guys"? My goodness, they are lucky that "Bad Guys" is the worst thing they are being called. I know some people who might call them "Industry KILLERS" and "CORRUPT from head to toe."

But it’s Lang who really deserves this kind of name calling. Lang pulls out that old claim that he’s concerned that minors will get their hands on the wine if it’s allowed to be shipped directly to consumers. Someone should remind him that consumers in Illinois have been able to obtain wine via the Internet for years. Where was Lang and his concern for all these years? Did he know..

1. 99% of all wine that ends up in minors hands first goes through his patrons (wholesalers) hands?
2. Supreme Court Justice Anthony Kennedy completely dismissed the notion that minors getting wine via the Internet is a problem?
3. Bill O’Donaghue, Chief Legal Counsel for the Illinois Liquor Control Commission, says that in his two years in that position he’s seen not one case of minors getting wine via the Internet?

Of course Lang knows all this.

He also knows that the alcohol distributors, who are pushing this winery-killing legislation, are among his biggest campaign contributors. Pretty simple math.

This anti-winery, anti-competitive legislation in Illinois is nothing more than a case of politicians willing to kill off small business for the sake of preserving their own cash flow. I’m not sure what Rinella and other wholesalers are crying about: They are getting what they paid for.

Posted In: Shipping Wine


5 Responses

  1. St.Vini - February 15, 2006

    As always Tom, good stuff.

  2. Steve Rezonja - February 16, 2006

    TOTALLY RIGHT ON!!! How do you get the Wall Street Journal, NY Times, Washington Post, LA Times, etc, etc, to print your article. It’s about time the public finds out what’s really going on.

  3. taylor - May 5, 2006

    I’m a wine lover and am all for the CA wine in any state. Tom get a clue, do some solid research, and quit being so arrogant. I’ve done little reseach so I am qualified to comment. 1st on bashing the corrupt MR. Rinella. After minimal research I found that this corrupt industry killer happens to be one the upstanding members of his community: He’s responible for recessitating a man back to life less than 10yrs ago, for the past 5yrs he has been the president of the Red Cross in his county (in this time he has raised Millions of dollars and put them into a new facility), and has been associated with numerous successful non-profit organizations. Instead of spending his time bashing others he has been helping them. What was really said in the article you attempted to quote Rinella from was: Jim Rinella, president of Rinella Distributing of Quincy, said the system of beer and liquor distributors was set up after the end of prohibition so that states could control the flow of alcoholic beverages. Manufacturers have relied on distributors to get their product to retailers and the Illinois Liquor Control Commission oversees things.
    That system has been short-circuited by recent rules that gave wineries an opportunity to sell and ship directly to consumers. Rinella said direct sales become a problem when huge wineries in California and elsewhere can ship their products to Illinois with no real fear that the Liquor Control Commission could go beyond state boundaries to enforce rules.
    “Some of the big wineries are going to be reputable and pay state tax on whatever they sell, but what about some of the other places that wouldn’t pay?” Rinella said.
    Rinella said he’s not opposed to Illinois wineries. In fact, he hopes proposed legislation will ensure that Illinois winemakers stay in business by preventing huge wineries in other states from flooding the market with direct delivery wines.
    Rinella said other state laws take a back seat under the current system and under Bost’s proposal. For instance, direct shipping of wine does not recognize dry townships where alcohol cannot be sold. In Pike County, the Pleasant Hill and Griggsville areas are dry for beer and liquor but have no way of stopping direct shippers.
    “Why can they sell in those areas and I can’t?” Rinella asked.
    Local wine makers say their products are not the same as beer and liquor, but Rinella said federal and state laws lump all intoxicating beverages into one category that requires a distribution system between producers and retailers.
    My God, the man wants to remain competitive in the alocholic beverage game but is subjected to different rules. He wants his local wine makers to be able to exist and not get swallowed up bc of the change in the bottom line. GET A CLUE. Don’t chastise someone you know anything about. what your motive???

  4. tom - May 5, 2006

    First, no federal law requires any wholesalers. That tier is the creation of the state.
    Second, I’m pretty sure my position on this is clear as are my reasons for holding those positions.
    But to be clear, some wineries don’t want to rely on wholesalers. Why shoul they? Did you know if a winery sells its wine via a wholesaler instead of themselves they immediatelyl take 30 of the profit away from the winery? If a winery can do this for themselves without the help of a wholesaler, why should they be foreced to work with a wholesaler?
    I know you’ve reseached this a litte…you should research it a lot.

  5. taylor - May 11, 2006

    I believe the issue at hand is taxes being paid. Wholerships ensure taxes being paid as well as protect the profits wineries make. They do so by providing a buffer between them and chain retailors who would surely use their abilty to lean on price to drive it down. Also you attacked the integrity of Mr. Rinella, but you failed to have a rebutle on to the comments I posted on that. So you indirectly you do acknowledge that you did so unjustly and being that majority of your blog was focused on this one can conlude that the entire blog is full of bs.

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