H.R. 5034: The Lies, The Facts, The Fictions
With so much at stake for America's alcohol wholesalers and their protected monopoly status that props up unearned profits, it's no surprise they would swing for the fences with all their state-granted political power and attempt to pass H.R. 5034. This bill, currently in Congress, would give wholesaler lobbyists the means to turn back the clock on consumer access to wine, lead to the passage of laws that override federal regulations on alcohol, kill jobs and business that focus on artisan production of wine, beer and spirits, punish and dismantle small specialty wine retailers that serve the consumers that wholesalers won't and override the critical Constitutional principle of a single American economic union…all for the sake of protecting wholesaler profits by giving them unprecedented control and influence over the entire American alcohol industry.
But what is truly remarkable (and likely a result of the wholesalers' hubris stemming from 75 years of being granted government welfare) is their willingness to misrepresent facts, ignore the truth, and mislead in their defense of H.R. 5034.
The recently launched www.hr5034.org website is the creation of the National Beer Wholesalers Association and and appears to be the repository all the misrepresentation, ignorance and misleading ideas supporters of H.R. 5034 could possibly muster.
For the sake of context and setting the record straight, this post address many of the misrepresentations and misleading claims made at the middlemen's disingenuous new website.
ON THEIR HOMEPAGE (http://www.hr5034.org/)
"Today’s system balances competition with public safety to ensure that
consumers can enjoy alcohol without suffering the negative effects of
an unregulated marketplace"
IS THERE REALLY ANY COMPETITION WHEN THE STATE-BASED REGULATORY SYSTEM THE WHOLESALERS LOVE SO MUCH REQUIRE THAT PRODUCERS OF ALCOHOL USE A WHOLESALER TO BRING THEIR GOODS TO MARKET, MEANING THAT WITHOUT USE OF A WHOLESALER A PRODUCER CANNOT ENTER A STATE'S MARKET? IT ALSO MEANS THAT WHOLESALERS GET TO DECIDE WHAT CONSUMERS DRINK, NOT CONSUMERS.
"Unfortunately the effective state-based regulatory system in the U.S. is under attack. Over the past 10 years,more than 25 states have faced challenges in federal courts to their authority to regulate alcohol and their ability to maintain a licensed system of alcohol controls."
THE ONLY CHALLENGES TO THE STATE-BASED ALCOHOL REGULATORY SYSTEM ARE THOSE THAT DISCRIMINATE AGAINST INTERSTATE COMMERCE FOR PROTECTIONIST REASONS. EVEN IN THE WAKE OF SUCCESSFUL SUITS THAT CHALLENGED THE PROTECTIONIST LAWS THAT WHOLESALERS ORIGINALLY PUSHED, THE STATE RETAINED EXTRAORDINARILY BROAD AUTHORITY TO MAINTAIN A ROBUST SYSTEM OF ALCOHOL CONTROLS.
ON THE "LEARN MORE" PAGE (http://www.hr5034.org/learn-more)
"Litigation against the states brought by those wishing to deregulate
alcohol for their own economic interests is of great concern to state
alcohol regulators, state attorneys general, public health advocates
and many others."
WHEN THE ECONOMIC INTERESTS OF PRODUCERS, RETAILERS AND CONSUMERS ARE HORSEWHIPPED BY STATES DOING THE BIDDING OF WHOLESALES WHO RECEIVE MORE GOVERNMENT PROTECTION AND WELFARE FROM THE STATE THAN ANY OTHER INDUSTRY IN AMERICA, YOU MIGHT EXPECT THEM TO FIGHT BACK. AS FOR THOSE THAT HAVE "CONCERN", LET'S RECALL THAT IT'S ONLY A TINY FRACTION OF STATE ALCOHOL REGULATORS, THAT THERE IS NO FORMAL SUPPORT FROM STATE ATTORNEYS GENERAL, ONLY A MERE HANDFUL OF PUBLIC HEALTH ADVOCATES, A SELECTION OF RECIPIENTS OF CAMPAIGN CONTRIBUTIONS FROM WHOLESALERS AND WHOLESALERS THEMSELVES THAT SUPPORT H.R. 5034.
"According to a recent national poll conducted by the Center for Alcohol Policy,
79% of respondents support the right of individual states to set their
own laws and regulations surrounding the sale of alcohol and 87% agree
that state and local laws regarding alcohol regulations should be
decided by lawmakers and citizens, not by judges."
I'M SHOCKED, SHOCKED I SAY, THAT THE "CENTER FOR ALCOHOL POLICY" IS AN ARM OF THE NATIONAL BEER WHOLESALERS ASSOCIATION AND THAT IT WOULD CONDUCT A POLL THAT FINDS RESULTS SUPPORTING THOSE THAT FUNDED THE POLL. DOES IT GET ANY MORE ILLEGITIMATE?
ON THE "FACT V. FICTION PAGE (http://www.hr5034.org/fact-vs-fiction)
"FACT: This bill does not address direct shipping or
any specific state alcohol law. It does not preempt a state law that
allows direct shipping. It does not mandate a direct shipping law where
there currently is not one. The bill does PROTECT a state’s wine
shipping law if someone were to challenge it in court by providing the
shipping law with the same presumption of validity granted other state
DISINGENUOUS IN THE EXTREME. AND WHAT'S WORSE, THE WHOLESALERS KNEW THIS WHEN THEY WROTE THIS. H.R. 5034 GIVES STATES THE ABILITY TO PASS LAWS UNCHALLENGEABLE IN COURT THAT WOULD DISCRIMINATE AGAINST OUT-OF-STATE WINE SHIPPERS. AND WE KNOW SUCH LAWS WOULD BE INTRODUCED INTO VARIOUS STATES SINCE WHOLESALERS HAVE SEEN TO IT THAT SUCH LAWS HAVE BEEN INTRODUCED INTO STATE LEGISLATURES FOR THE PAST 20 YEARS. IN FACT, H.R. 5034 WOULD ALLOW STATES TO PASS LAWS THAT MAKE CONSUMERS RECEIPT OF A WINE BY IN-STATE SHIPPERS LEGAL WHILE MAKING RECEIPT OF A WINE BY OUT-OF-STATE SHIPPERS PUNISHABLE TO A GREATER DEGREE THAN RAPE, HOME INVASION OR SELLING COCAINE TO CHILDREN.
"Fact: Protection of a state’s power to regulate alcohol is not an “industry food fight.”
"FOOD FIGHT" MAY BE THE WRONG WORD. BETTER TO CALL THE INTRODUCTION OF H.R. 5034 WHAT IT IS: AN ATTACK ON THE ENTIRE ALCOHOL INDUSTRY AND CONSUMERS FOR THE SAKE OF PROTECTING WHOLESALER PROFITS. IT'S NO COINCIDENCE THAT BREWERS LARGE AND SMALL, WINERIES, SPIRIT PRODUCERS AND IMPORTERS, RETAILERS, WINE EDUCATION ORGANIZATIONS, WINE CONSUMERS AND FREE TRADE ORGANIZATIONS ALL OPPOSE H.R. 5034.
"This bill does not amend or alter the Federal Alcohol Administration
Act (FAA Act) which provides federal guidelines in many of these areas"
NO IT DOESN'T "AMEND" THE FAA ACT. IT OVERRIDES IT ENTIRELY. TO QUOTE FROM H.R. 5034: "NOT WITHSTANDING THAT THE STATE OR TERRITORIAL LAW MAY BURDEN INTERSTATE COMMERCE OR AN ACT OF CONGRESS, THE STATE LAW SHALL BE UPHELD…" THIS CLAIM BY THE WHOLESALERS THAT H.R. 5034 "DOES NOT AMEND" FEDERAL REGULATIONS ON ALCOHOL IS A STRAIGHT UP MISREPRESENTATION. IT'S LIKE SAYING "I DIDN'T KICK THE DOG, BUT RATHER HIS RIBS FELL ON TO MY BOOT".
"It is the intent of this language to make clear the congressional
support for the holding in Granholm-prohibiting state laws
that allow an in-state winery to do something a similarly situated
out-of-state winery cannot do. Language that bars facial discrimination
is included in the bill to codify this prohibition"
I HAVE GREAT FAITH IN THE WHOLESALERS' ABILITY TO MISLEAD. BUT THIS GOES BEYOND EVEN MY EXPECTATION. THE INTENT OF H.R. 5034 IS PRECISELY TO OVERTURN THE GRANHOLM V. HEALD SUPREME COURT DECISION THAT DID AWAY WITH PROTECTIONIST STATE ALCOHOL LAWS. MORE IMPORTANTLY, THE VERY LANGUAGE OF H.R. 5034 GIVES STATES THE EXPLICIT RIGHT TO DISCRIMINATE AGAINST OUT-OF-STATE WINE SHIPPERS. ALL THE STATE NEEDS TO DO IS OFFER THE FEEBLEST OF JUSTIFICATIONS. READ FOR YOURSELF: "STATE OR TERRITORIAL REGULATIONS MAY NOT FACIALLY DISCRIMINATE, WITHOUT JUSTIFICATION, AGAINST OUT-OF-STATE PRODUCERS OF ALCOHOLIC BEVERAGES IN FAVOR OF IN-STATE PRODUCERS." ONE OF THOSE "JUSTIFICATIONS", THE BILL STATES, IS MAINTENANCE OF THE "STRUCTURE OF THE STATE ALCOHOLIC BEVERAGE DISTRIBUTION SYSTEM." IN OTHER WORDS, DISCRIMINATION IS OK AS LONG AS THE DISCRIMINATION IS WRITTEN INTO THE STATE'S ALCOHOL BEVERAGE DISTRIBUTION LAWS. FURTHERMORE, NOTE THAT WINE RETAILERS ARE NOT EVEN COVERED BY THIS DUPLICITOUS LANGUAGE ON "JUSTIFICATION". THE STATE NEEDS NO JUSTIFICATION TO DISCRIMINATE AGAINST OUT-OF-STATE RETAILERS.
"Over half the states have been sued challenging their alcohol laws. The
lawsuits have attacked items such as commonsense safeguards that
require a face-to-face transaction (needed for I.D. checks) to buy
IN FACT, FACE-TO-FACE TRANSACTIONS ARE NOT NEEDED FOR I.D CHECKS. WE KNOW THIS BECAUSE STATES HAVE WRITTEN LAWS THAT HAVE GONE UNCHALLENGED THAT REQUIRE I.D. CHECKS TO BE MADE AT THE POINT OF DELIVERY OF THE WINE.
"Unelected judges should not set alcohol policy; this responsibility
rightly rests with individual state legislatures, as guaranteed under
the 21st Amendment to the U.S. Constitution."
JUDGES NEVER HAVE SET POLICY. STATE LEGISLATURES ALWAYS HAVE. THIS IS THE BIG LIE THE WHOLESALERS TELL. JUDGES MERELY TELL THE STATE WHEN THEY HAVE REACHED BEYOND WHAT THE 21ST AMENDMENT ALLOWS. AFTER THAT, THE STATE LEGISLATURES, IN EVERY STATE WHERE LITIGATION HAS AFFECTED BADLY CRAFTED LAWS, WENT ABOUT LEGISLATING A FIX. SURELY THE WHOLESALERS DON'T MEAN TO SAY THAT STATE ALCOHOL LAWS SHOULD IN NO WAY BE REQUIRED TO ABIDE BY THE PRINCIPLES IN THE U.S. CONSTITUTION. WHAT NEXT, WILL THE WHOLESALERS ARGUE THE 21ST AMENDMENT GIVE THE STATES THE RIGHT TO PROHIBIT WOMEN FROM BUYING ALCOHOL? WILL THEY ARGUE THAT STATE LAWS BANNING AFRICAN-AMERICANS FROM BEING DISTRIBUTORS IS LEGAL UNDER THE 21ST AMENDMENT?
"State laws that raise concerns can and should be addressed in the state legislature."
LUCKY FOR AMERICANS IT WASN'T THIS ATTITUDE THAT RULED THE DAY WHEN JIM CROW LAWS WERE IN PLACE. THE WHOLESALERS WOULD HAVE ARGUED THAT THE RACIST "SEPARATE BUT EQUAL" PHILOSOPHY HAD NO BUSINESS BEING LITIGATED AND THAT WE SHOULD WAIT FOR THE LEGISLATURES THAT ENACTED THE RACIST LAWS TO OVERTURN THEM WITH NEW LAWS. WE HAVE COURTS PRECISELY TO ADJUDICATE CONCERNS WITH THE FAIRNESS AND CONSTITUTIONALITY OF STATE LAWS. BUT OF COURSE, WHOLESALERS KNOW THIS. THEY TO HAVE BROUGHT STATES TO COURT OVER ALCOHOL DISTRIBUTION LAWS THEY DIDN'T THINK WERE FAIR OR CONSTITUTIONAL. IT APPEARS THAT WHOLESALERS DON'T LIKE THE COURTS INVOLVED WHEN THE DECISION DON'T GO THEIR WAY.
The hypocrisy, misleading notions and disinformation being featured at the wholesalers website supporting H.R. 5034 is staggering. However, they do the right thing when they invite readers to sign up for emails that will deliver "the latest developments". I urge all readers to sign up for those emails.
In the mean time, please checkout the website that spurred the wholesalers to launch their own: http://www.stophr5034.org. It is published by the Specialty Wine Retailers Association and upon reading through it, you should find yourself feeling much cleaner and less soiled than after wading through the misrepresentations of the new wholesaler-sponsored website on H.R. 5034.