A letter About The Wine and Beer Wholesaler Protection Act

Posted by Tom Wark on Feb 17, 2011

HR 5034, the bill introduced into Congress last year that would have altered the balance of power in the realm of alcohol beverage sales and consumer access to favor middlemen distributors, is still on the mind of many in the wine industry.

Yesterday, as WineBusiness.com reports, associations representing nearly all the wine, beer and spirit companies operating in the U.S. issued a letter to all members of Congress urging them NOT TO SPONSOR any new version of H.R. 5034 that will likely be introduced again this year.

The letter to federal lawmakers noted the following important points:

"The 2010 bill would have invited enactment of discriminatory state laws and protracted litigation. We anticipate its reintroduction this year and strongly oppose this misguided effort. More than 100 businesses and think tanks shared our position in 2010."

and

"We do not believe that Congress should spend valuable time wading into an intra-industry squabble and unraveling a successful regulatory structure to the detriment of consumers, the industry, and the federal interest in a fair, competitive, and orderly marketplace for alcohol beverages. We respectfully ask thatyou refrain from cosponsoring this special-interest legislation and join the numerous groups actively opposing it."

Last year the National Beer Wholesalers Association and the Wine & Spirit Wholesalers of America (WSWA) failed to move the the bill, otherwise known as the "Wholesaler Protection Act" out of the House Judiciary Committee. Significant industry opposition, significant consumer opposition, significant disdain for the legislation offered by the media, controversy over campaign contributions by the National Beer Wholesalers Association reported in the media and wholesaler incompetence in arguing in favor of their protectionist bill led to it dying in committee.

However, there is every expectation that this will will return with a different number attached. I would not be surprised to see a new wholesaler protection bill introduced in late march. In addition, Craig Wolf, president of the WSWA has said in an interview that he expects the bill to be reintroduced this year.

This kind of legislation is radical in the extreme as it has Congress, for one thing, stripping all wine stores in America of thier Commerce Clause protection against discrimination lalid out in Article One of the Constitution, something that congress has one only one time before in its 225+ year history.

The anti-HR 5034 Facebook page counts nearly 15,000 friends. This will grow considerably when a new bill is introduced. Alcohol producers in the U.S. will not support the bill when the legislation is re-introduced. Libertarian and Free Trade think tanks and associations will continue to voice their opposition to the bill. And wine retailers will, again, attempt to express their opposition to a bill aimed had trying to close off their growth and ability to serve American consumers.

Like the signers of this industry letter, American wine consumers and members of the American wine industry need to continue to stay vigilant on this issue.