New Wine Bill In Congress Takes Aim at Consumers
As promised, America's beer and wine wholesalers have again convinced a congressman to introduce what can only be called the "Wholesaler Protection Act".
What was hr 5034 last year is now HR 1161. Representative Jason Chaffetz (R) from Utah is the main sponsor. HR 1161 is identical to the second version of last year's bill.
If passed, HR 1161 would give states complete protection from legal challenges if they pass laws that:
-Discriminate against out-of-state retailers from shipping wine into a state to consumers
-Only allow wineries of a certain size to ship in wine
-Give locally made wine, beer and spirit products tax exemptions while charging them to out of state products
And this is just the start of the kind of anti-consumer, anti-free trade laws that wholesalers have long pushed for and often received.
The problem is that the three-tier system gives local wholesalers HUGE market protection that leads to unearned profits that result from protection from competition. These profits are then used to pour millions of dollars on to state legislators who then do their bidding. Out of state wineries and retailers can't compete with that and the wholesalers know it. By passing HR 1161 they assure there can never be any court challenges to laws that without HR 1161 would be subject to a challenge on Commerce Clause grounds.
It's as though the wholesalers are admiting that without state-mandated welfare, they can't compete in a free market and they are willing to screw consumers, wineries, retailers, distillers, and brewers in order to keep their cushy, unearned, state-protected profits.
What can you do?
1. CALL YOUR CONGRESS PERSON NOW—THIS MINUTE—AND TELL THEM "DON'T SUPPORT HR 1161—"THE WHOLESALER PROTECTION ACT".
2. JOIN "STOPHR1161" ON FACEBOOK AND HELP SPREAD THE WORD THAT THIS BILL WILL SEVERELY REDUCE CONSUMER ACCESS TO WINE AND GIVE WHOLESALERS AN UNFAIR ADVANTAGE OVER THEIR COMPETITORS.
3. IF YOU ARE A MEMBER OF A WINERY, BREWEY, RETAILER OR DISTILLER ASSOCIATION, MAKE SURE THEY ARE MAKING THEIR VOICE HEARD BY THEIR CONGRESSPEOPLE AND THE MEDIA.
Craig Wolf, President of the Wine & Spirit Wholesalers of America said this while applauding the introduction of HR 1161:
"It is important for our supplier, importer and retailer partners to understand that we don’t consider this an ‘intra-industry’ squabble. This is not ‘us versus them.’ After all, no legitimate player in the industry feels litigation is an appropriate method for establishing or altering alcohol policy."
He's right. THIS IS NOT AN "INTRA-INDUSTRY" squabble.
It is a Consumer vs. Wholesaler battle since in the end it is consumers who will be most hurt by this legislation. This is the legislation that paves the way for wholesalers to use all their might to force consumers to live in the wine commerce world of the 1930s and to force them to choose from fewer and fewer products that only they provide.
If you are a consumer, winery, distiller, brewer or retailer and you want something to get angry about and fight…HR 1161 is it.
One would have thought that Washington had a few more pressing problems right now, maybe a budget?
But it is easier to take on the consumer of fine wines,after all, everyone drinks beer, if they want some White Zinfandel just run down to the supermarket.
Once again a great piece. Thanks for keeping us informed. Based on my kids’ ability to get all the booze they wanted in college before they were of age, I don’t see that the wholesalers have a very good track record for protecting society from the evil grape, etc. For young and under-age drinker wine ranks a distant 4th to hard liquor and beer as the drink of choice. Leave us Wineeauxs alone. Free the Grapes!!!!
Thanks for all of your hard work in this area, Tom. Hopefully we can mount strong opposition and gather a broad coalition of interested parties as everyone but wholesalers stand to loose in this bill.
I’ll be staying tuned and spreading the word, it’s time to rally the troops!
For crying out loud, they’re at this again? Ridiculous. It would be nice if these wholesalers and Congressmen kept consumers’ best interest in mind. Will it ever end?
I’m confused, man. Specifically about this:
“Give locally made wine, beer and spirit products tax exemptions while charging them to out of state products”
Even if this bill was passed, couldn’t an argument still be made that the above condition is unconstitutional as it violates free trade? I’m no lawyer but I imagine this would be a difficult one to defend in court even if the bill is passed.
Now, I am certainly hoping that this bill dies a quick and violent death, but I’m also trying to get a handle on how big of a threat it really is.
Joe,
HR 1161 allows states to pass any kind of protectionist or discriminatory law regarding wine retailing that they want without any fear of being challenged in court. So, a state could easily pass a law says in-state wine stores may ship to residents, but out of state wine stores may not. And this could not be challenged in court. However, a state could also allow out of state retailers to ship into a state, but charge the retailer a fee for each shipment that in-state retailers need not pay.
In fact, because HR 1161 literally strips all wine retailers of their Commerce Clause protection against state based discrimination (only the 2nd time in 220+ years any industry has suffered this) the state could pass ANY discriminatory law concerning wine retailers that they choose to and no challenge in court would ever succeed. Bottom line: HR 1161 is devastating for wine retailers.
Thanks, Tom.
I cannot imagine this would get passed, but certainly applaud the reaction to kill it!
Hi Thom
GREAT blog, very out spoken! Great read will definately be following your page from now on.
I am a young South African winemaker, I was considering starting my own blog, it will be a little different. Would it be possible for you to send me an mail as I have a few questions to ask you.