What’s Wrong With Wine and Alabama?

Posted by Tom Wark on Apr 19, 2012

Consider this scenario:

1. Wineries are required to sell their wines exclusively to wholesalers

2. Wholesalers are not required to distribute the wineries' wines

3. Wholesalers won't represent and distribute the wineries' wines.

We are talking here about Alabama.

The ten wineries in that state asked for a simple exemption from this absurd scenario: "Allow us to sell our own wines to restaurants and retailers, please, since wholesalers won't and they represent the only way we can get our wines to market"

Yesterday, House Bill 149 was voted DOWN by the Alabama House Committee on Economic Development  7-6. The bill will die. The Gadson Times, reporting on the committee vote noted this:

"At the pre-legislative break committee session, Gulf Distributing lobbyist Steve Windom said the three-tier system is responsible for thousands of jobs that would be jeopardized by a break in the chain.

"The committee vote protected the status quo. “I want to see them compromise on a system that doesn’t endanger the three-tier system,” said Rep. Joe Hubbard, D-Montgomery, who voted against Nordgren’s bill.

"The unstated fear is if small wineries can distribute their product without a middleman, small breweries and then larger alcoholic beverage producers will attempt to bypass distributors, eliminating jobs."

I write about this story not because it is news (this kind of sordid and unethical state-generated protectionism at the expense of small businesses for the sake of paying of campaign contributors is common place not just in Alabama, but across the country). I'm writing about this because it is perhaps a perfect example of what's wrong with alcohol beverage regulation in America.

The Alabama House Committee that voted to undermine small business, farmers and increased revenue for the state did so in the service of a system of regulation that has evolved from one that honors the fears and concerns of alcohol's dangers understood at the outset of the Post-Prohibition era, to one that plays no role other than to stifle competition, ingenuity, and innovation for the sake of protecting the pocketbooks of unnecessary and incompetent middlemen.

Then again, this is the state that celebrates "Jefferson Davis Day" every June and flies a flag that highly resembles the Confederate Battle Flag. I mention this for no other reason than to note the state has allegience to more than just the prinicple of protecting campaign contributors.

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Update: Alabama wineries call for boycott of beers distributed by the wholesaler opponents of legislation allowing them to self distribute their wines.