Wine Wholesalers Have Jumped the Shark on H.R. 5034

Posted by Tom Wark on Jun 14, 2010

It appears that wine wholesalers have jumped the shark where H.R. 5034 is concerned.

It has been two months since America's alcohol wholesalers have attempted to radically change the rules of alcohol regulation with their introduction of H.R. 5034, the bill that would overturn the 2005 Granholm v. Heald Supreme Court decision and allow state governments to pass discriminatory legislation, stop direct shipping and write laws that need not conform with any federal laws.

Why the wholesalers would want the states to have such unprecedented control isn't too hard to understand. They control the state legislatures through their state-mandated place in the middle of the three tiers that exempt them from having to compete for business and allow them to control the flow of all alcohol into the marketplace. They want to see continued and extended regulations that allow them a free ride.

Well, I have a feeling their campaign to place producers and retailers under their thumb isn't working out the way they wanted. How do I know this? They are now claiming that H.R. 5034 is a "jobs bill".

At the Wine & Spirit Wholesalers of America website a system has been set up that allows wholesalers to send letters to legislators urging them to support H.R. 5034. The pre-written letter that WSWA wants their members' employees to send off has this language:

"My job and the jobs of my co-workers are wholly dependent on strong state-based regulation of alcohol. In an unpredictable economy with rising unemployment, I am fortunate to work for a family-owned company that provides a well-paying job with good benefits.  Unlike many other industries, my work cannot be shipped overseas and is dedicated to serving our local community. By supporting the CARE Act, you are protecting and promoting high-quality American jobs like mine"

When the wholesalers resort to sending a message that can fairly be called the most deceptive argument they've yet used to sell this bill, you know they feel they are in trouble.

The wholesalers who wrote this language know a variety of things, among which are…

1. Nothing that has resulted from the Granholm v. Heald Supreme Court decision or any other litigation has cost wholesalers any jobs.

2. If H.R. 5034 passes, wholesalers will immediate introduce and see passed laws that outlaw direct shipping to a number of states that will put WINERIES and RETAILERS out of business and that will cost many jobs.

And yet, they still are able to sling about the kind of language cited above.

This is clearly a desperate measure that can only be accounted for by understanding that they didn't think though this bill before getting it introduced, they somehow deluded themselves into thinking they would not face the kind of massive opposition to bill they now see on display, and they didn't think they would have to go back to their supporters in the House of Representatives and explain how all they said about the bill could be challenged by just about every branch of the alcohol industry that looks at this proposed law.

If the alcohol wholesalers do get the hearing in the House Judiciary Committee they seem to want, they are going to get pounded. In fact, that hearing may result in the most devastating public spanking they have ever received. And that's saying something.

There are any number of people who will testify at this hearing who will provide enormous embarrassment for the wholesalers if they try to offer up H.R. 5034 as a "job saving bill."

What's worse, the primary argument the wholesalers have made for the bill, that litigation has prevented state government from regulating alcohol, is so clearly and easily proved wrong that I hesitate to believe they'll even make this argument. Particularly when it is blazingly clear that since the Granholm v. Heald decision, states have passed massively more regulations where direct shipping is concerned than ever existed prior to that decision.

So what can the wholesalers say in these hearings? Will they argue that states should forgo the revenue they now enjoy as a result of direct shipment? Will they argue that it's the wholesalers and not consumers who are better positioned to determine what products consumers want? Will they argue that the massive amount of litigation that will result from H.R. 5034 is a good thing?

I'm guessing their best bet is to simply come crying before the Committee and tell the truth: "We..sniff, sniff, we don't think we should have to compete for business on a …sniff…sniff…level playing field. Please protect us from having to work for a living."