HR 1161–Watching Wine Distributors Eat Their Own

Posted by Tom Wark on Mar 21, 2011

"No legitimate player in the industry feels litigation is an appropriate method for establishing or altering alcohol policy."
Craig Wolf, President, Wine & Spirits Wholesalers Association

The above quote comes from a press release issued by WSWA applauding the introduction of HR 1161. One wonders if WSWA's two largest members, and the two largest wine wholesalers in America, know have been identified as as "illegitimate" by their very own trade association. 

After all, consider…

• In 2001 Glazers Wholesale Distributor sued the state of Kansas saying that state's residency requirement for wholesalers was unconstitutional

• In 2007 Southern Wine & Spirits sued the state of Texas claiming that state's residency requirement for wholesalers was unconstitutional.

• In 2009, Southern Wine & Spirits sued the state of Indiana claiming that state's residency requirement for wholesalers was unconstitutional.

So, according to Wolf, his two largest members and the two largest wine wholesalers in America are not legitimate players in the wine industry.

All this is evidence for three things I've always said:

1. Wholesalers don't think before they speak (or write).

2. Wholesalers support for HR 1161 is more about profit than principle.

3. Wholesalers mistake policy issues for legal issues.

Craig, in the press release, goes on to say:

“We are supporting this legislation [Hr. 11611] in an effort to ensure that policy disputes are resolved by local elected officials rather than unelected and unaccountable federal judges.”

When out-of-state wineries challenge discriminatory state laws prohibiting them from shipping to a state's residents on the same terms as in-state wineries may ship, they are raising a legal issue. When out-of-state retailers challenge a state law prohibiting them from shipping to a state's residents on the same terms as in-state retailers they are raising legal issues. When non-resident wholesalers challenge a state law prohibiting them from opening distributorships on the same terms as state residents, they are raising legal issues.

My advise to anyone who wants to take Wolf and the WSWA seriously when they talk about "unelected and unaccountable federal judges" and when they speak of "policy disputes" is keep in mind that they are making the same argument that many segregationists made when school segregation was being considered by the Federal Court system and which resulted in the beginning of school desegregation with Brown v. Board of Education.

We didn't hear WSWA call the federal judiciary "unaccountable" when Glazers and Southern won their lawsuits. And we didn't see WSWA call for a new federal law "affirming states' rights" when their members sued Indiana, Kansas and Texas.

Make no mistake, HR 1161, which if passed would forever prevent wine retailers from challenging a state's discriminatory laws in the same way wholesalers have used the Commerce Clause to challenge state laws, is about preserving wholesaler profit. It's about assuring that unconstitutional laws wholesalers like are maintained.