How To Serve Wine Lovers AND Pass HR 1161

Congress HR 1161, commonly referred to as the CARE ACT, has divided the alcohol industry, pitting wholesalers (who wrote the bill) against producers and retailers who see the bill as a power grab by wholesalers that will lead to discriminatory state laws aimed at excluding producer and retailers from accessing out-of-state markets and will protect wholesalers from competition.

Wholesalers complain that this is an unfair assessment of HR 1161. They complain that the bill does nothing except preserve the state's right to regulate alcohol.

It's time the entire wine, beer and spirits industry come together to either kill or pass this bill and in the process get back to working to serve markets and customers.

I SAY PASS HR 1161…But in the following amended form:

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled

1. SHORT TITLE. This Act may be cited as the ‘Community Alcohol Regulatory Effectiveness Act of 2011

SEC. 2. PURPOSES. The purpose of this Act is to recognize and reaffirm that alcohol is different from other consumer products and that it should continue to be regulated by the States.

SEC. 3. SUPPORT FOR STATE ALCOHOL REGULATION. The Act entitled ‘An Act divesting intoxicating liquors of their interstate character in certain cases’, approved March 2, 1913 (27 U.S.C. 122 et seq.), commonly known as the ‘Webb-Kenyon Act’, is amended by adding at the end the following:

(a) Declaration of Policy- It is the policy of Congress to recognize and reaffirm that alcohol is different from other consumer products and that it should continue to be regulated by the States. (b) State or territorial regulations may not discriminate against out-of-State or out-of-territory producers or retailers of alcoholic beverages in favor of in-State or in-territory producers unless the State or territory can demonstrate that the challenged law advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.

With HR 1161 amended to read as it does above, I'm sure wholesalers would be able to convince producers and retailers to support it.

One thing I know from reading my user statistics is that wholesalers of beer, wine and spirits from across the country, including their association heads, read this blog. And they do so on a daily basis. Yet, I can guarantee that not a single one will respond to this proposed amended language for HR 1161 in this post for a simple reason: Not only are they generally cowards, but also I've re-written HR 1161 to guarantee that producers AND RETAILERS are protected from state based discriminatory laws.

If one thing is clear, it is that HR 1161 constitutes and all out attack on wholesaler's best customers (Retailers) and through them an attack on consumers. Whenever consumers are given access to wine and beer beyond the paltry selection that wholesalers in nearly every state provide, wholesalers lose. The reason for this is that wholesalers profits rise when selection is curtailed. The fewer products they make available to retailers in states, and through them to consumers, the easier their job is and the lower their overhead is.

This is why wholesalers never innovate. The greatest innovation in the realm of alcohol middlemen in the past 75 years has been cardboard and more fuel efficient vehicles. Wholesalers couldn't innovate their way out of a cardboard box.

The only hope for serving the growing market of wine lovers, for assuring higher profits for producers and importers of artisan wines and for assuring innovation in the wine retailing sector is to pass HR 1161 as written above.


2 Responses

  1. Bobby Cintolo - April 18, 2011

    Haha, great post Tom. Maybe someone will listen to you this time.

  2. John Bell - April 20, 2011

    HR1161 should not be considered for passing in ANY form, including yours, Tom. It is fundamentally flawed. The reasons are eloquently set out by Wendell Lee and Corbin Houchins in the ShipCompliant blog on this subject at:
    Check it out and become informed.

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