Clowning Around With Wine
Today, on Capital Hill, we saw what millions of dollars in campaign donations and lobbying buys: Your own congressional hearing to consider creating a exemption from competiton and an exemption from having to adhere to the Constitution.
I swear this is not a joke. But from some of the clownish proposals and Clowns that testified on behalf of these suggestions you'd have thought that the Clowns had rushed Capital Hill.
Today in the Sub-Committee on Courts and Competition, of House of Representatives a hearing was held on "Legal Issues To Consider State Alcohol Regulations". The hearing was held at the behest of the National Beer Wholesalers Association and supported by the Wine & Spirit Wholesalers Association.
The Beer wholesalers are floating legislation that would do the following;
-Exempt States from being sued on the basis of violating the commerce clause with discriminatory laws
-Exempt States from being sued for anti-trust violations.
The Beer Wholesalers and wine wholesalers want congress to pass laws that exempt the states from these kinds of lawsuits. They say it is necessary because without it, we will see deregulation of the alcohol industry and that will lead to bedlam; the kind of bedlam that they claim now exists in the UK where alcohol is less regulated than here.
One of the funniest parts of the hearing was when the wholesalers own expert on the dire consequences of deregulation stated she didn't think there was any similarity between the UK and the U.S. where alcohol deregulation was concerned. They couldn't even get their own expert to agree with that outrageous claim.
Still, let's just be clear what would happen if the beer and wine wholesalers got there way. They would immediately begin lobbying in the various states to repeal any laws that allow out of state wineries and retailers from shipping wine to consumers. And they'd be successful. And even though they'd continue to allow in-state wineries and retailers to ship wine to their residents, there would be no recourse to the courts and the U.S. Constitution that says clearly that it's the FEDS that regulate interstate commerce.
So, while the hearings turned out to be pretty silly and a complete disaster for the wholesalers, it's important to keep in mind their ultimate goal: change the rules in the middle of the game so that they can operate with no competition.
No members of the wine or retail industry showed up to testify, largely, it is believed, because there was no good reason to give these hearings or the wholesalers' request for a bailout from competition, the dignity of a response or any oxygen for the idea that an appearance would produce. However, Representatives Mike Thompson and George Radanovich offered biting and compelling testimony in which they labeled the wholesaler's proposal exactly what it was: Protection for them and screwage for everyone else including consumers.
Most of the speakers, regardless of their position, comported themselves fairly well. The only whack job who showed up was Nida Samona, the Chairperson of the Michigan Liquor Control Commission. I almost felt sorry for her when she claimed the state of Michigan was losing tax revenue by issuing permits and collecting tax revenue on wineries that shipped to Michigan—where before they never collected tax revenue. I really wanted to hear about the math that brought her to that conclusion. Of course, she came to the hearing equipped with no evidence for any of the bizarre charges she made. No surprise there. Her actions and statements on wine shipping are rarely coherent.
Even worse was when she admitted that she and her agency couldn't handle the task of efficiently regulating direct shippers, while her colleagues in alcohol regulation around the country seem to be handling direct shipping regulations just fine. Why you would testify in front of a congressional committee that you are incompetent is beyond me.
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The hearings themselves I do not believe will lead to the outcome desired by the wholesalers who instigated them. But what is important to know is that it takes remarkable amounts of political power to get a congressional hearing to consider your own, special interest proposals—especially when you are asking that congress remove state regulations from judicial oversight by exempting states from being sued. The fact that the beer wholesalers, who are altogether opposed to consumer choice or free trade, are able to accomplish this is still a little frightening.