Money, Power and Wine—A Tale of $4.9 Million

Worrying that money might control politics is akin to being concerned that Burgundy is overpriced. That horse has left the barn.

But what's true and what matters where money and politics is concerned is that money buys access to the halls of power, that place where policy is enacted and where money buy protection. What's interesting, and what this post is ultimately about is that staggering amounts of money dedicated to politics, while often getting its way, doesn't always get its way.

Case in point, the campaign contributions of American beer and wine wholesalers. The figures are in for 2011.

The National Beer Wholesalers Association (NBWA) in 2011 gave $1,786,500 to political candidates and political Political Action Committees (PACs) in 2011. This is a staggering amount of cash to devote to buying the attention of congressional lawmakers. But to appreciate just how staggering it is, you have to put it in context. Of the $1.786 million donated by the NBWA in 2011, $1.5 million of that went directly into the campaign coffers of individual politicians. Consider where this put the NBWA in comparison with other contributors to federal candidates.

Top20PacThe NBWA were the 3rd largest campaign contributor in 2011 behind only Honeywell's PAC and the PAC associated with the National Association of Realtors. Take a look at this list of top contributors to candidates and look who the beer wholesalers outdid. Again, staggering.

Then there is the Wine and Spirit Wholesalers of America (WSWA), the national lobbying group for wine and spirit wholesalers. The WSWA gave $942,000 to federal candidates and Federal PACS, $695,000 of which went directly into the coffers of politicians.

But wait, there's more. The WSWA and the NBWA report spending $1,245,000 and  $930,000 respectively on lobbing activities in 2011. The vast majority of these lobbying expenses pay for their in-house efforts. However, both wholesaler associations hire outside first to help them lobby lawmakers.

In addition to their in-house lobbying activity, the NBWA utilized the services of The Eris Group ($240,000), Mehlman, Vogel & Castagnetti Inc ($180,000) and Rafaniello & Associates ($120,000) to help influence lawmakers to protect their interests.

The WSWA does the majority of their lobbying with in-house resources, but also spend on outside lobbying firms to protect their interests, including Capital Hill Strategies ($200,000) and Williams & Jensen ($200,000)

Between the NBWA and the WSWA, $4,903,500 was spent on campaign contributions and lobbing federal lawmakers in 2011.

What do they want for this remarkable amount of cash?

The #1 priority of both the beer wholesalers and the wine and spirit wholesalers in 2011 was passage of H.R. 1161, The Community Alcohol Regulatory Effectiveness Act. Introduced in 2011, H.R. 1161 would give individual states the right to discriminate against out-of-state businesses for purely protectionist purposes. It would strip wine retailers of their long held Constitutional Commerce Clause protection against state-based discrimination and give states the ability to easily turn back the clock on winery direct shipping. All these things have been long-time goals of wholesalers who have fought for this kind of anti-consumer and anti-commerce protection for decades.

For all their efforts and all their cash, the alcohol wholesaler lobby has managed to gain 117 sponsors for the bill in the House of Representatives, no hearings on the bill yet and no sponsor of the bill in the Senate.

It can't be said that wholesalers have only been spending campaign contributions and lobbying efforts on an attempt to squash competition via H.R. 1161. They also have lobbied to effect tax policy, on LIFO accounting regulations, to stop Congress from granting the Post Office the ability to deliver wine, to see instituted policy allowing engine interlocking devices on the cars of convicted drunk drivers and to persuade the Federal Trade Commission to reverse its positive attitude toward direct shipping of wine.

Still it's notable that the wholesalers' primary policy objective, passing H.R. 1161, is still in limbo. The bill is currently awaiting a hearing in the House Judidiary Committee as well as a sponsor in the Senate. Whether either of these things will happen in 2012 or if the bill will die by the end of the current session of Congress is unknown.

That said, with nine months left in the 2011/2012 election cycle, both the NBWA and the WSWA are well on there way to breaking each of their previous records for campaign contributions in a single political election cycle going back to 1990.


All figures for this article were sourced through OpenSecrets.


12 Responses

  1. Lisa Duff-Khajavi - March 15, 2012

    Thank you Tom for your tireless updates and your work with SWRA. What a massive imbalance of power!

  2. Tom Wark - March 15, 2012

    Lisa: Thank you.

  3. Roger Beery - March 15, 2012

    Thanks Tom. It is breathtaking, isn’t it?

  4. Marcia M - March 15, 2012

    Rather stunning who they outspent in that list (especially considering the lack of results to date).
    You’d think the post office would itself be lobbying like crazy to get the right to deliver (at least) wine considering their dire financial straits.
    Nice post, Tom!

  5. what are the best wine clubs - March 16, 2012

    Politics are so discouraging sometimes. I believe anyone who wants to sell wine should be able to do so freely.

  6. Michael Kaiser - March 16, 2012

    What the wholesalers didn’t count on was the grassroots effort by the wine, spirits and beer industries and their consumers who came together to fight the so-called CARE Act. We may not have their money, but we have a grassroots network they can’t match.

  7. Tom Wark - March 16, 2012

    Do you really think they didn’t count on this opposition? The folks at NBWA and WSWA are pretty smart. We both know that. I don’t think they overlooked the likely opposition. I think they think their insider advantage can overcome it. It’s also true, however, that In-Bev has been pretty active in opposing the CARE Act.

  8. James McCann - March 16, 2012

    You are vastly underestimating their “grass roots” ability… do you know how many people work for WSWA and NBWA companies?

  9. Michael Kaiser - March 16, 2012

    I actually do think they completely underestimated the consumer response.

  10. Tom Wark - March 16, 2012

    The Wholesalers have no contact with nor a good understanding of the consumer mindset. It’s not their audience. So it may not be surprising. However, as I said above, the folks at NBWA and WSWA are pretty smart and I have great respect for their accomplishments. They know how to wield a blunt instrument as well as anyone.

  11. David Vergari - March 16, 2012

    To coin a phrase…this kind of money doesn’t talk, it uses obscene language!

  12. Joe Jensen - March 19, 2012

    I encourage all of you to differentiate between the large corporate industrial distributors like SWS and Wirtz and the small 1 to 10 person operations that sing the praises of small to medium sized producers and fight the battle every day against the corporate industrial wholesalers and their corporate paymasters like Gallo and Constellation!
    Most wineries need a small wholesaler to get out in the market and sell their wines to the local buyers and consumers who care and want more than marketing program wines!
    Joe Jensen
    Compass Wines and Spirits
    Chicago, Illinois

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