Beer Wholesalers Prepared to Bring Back the CARE Act

In its 2001/2012 Annual Report to Members, the National Beer Wholesalers Association (NBWA) disclosed that they have lined up Washington lawmakers who are ready to reintroduce the CARE Act in the event anyone attempts to file suit against a state challenging its alcohol regulations.

The NBWA Annual Report states:

“While litigation challenges have significantly decreased, key leaders on Capitol Hill remain vigilant and stand ready to take legislative action should litigation threats resume”

Introduced first in 2010 as H.R. 5034, then reintroduced in 2011 as H.R. 1161, the Care Act would have given states Congressional authority to discriminate against out-of-state wine sellers for any reason, including the obvious: protecting their in-state wholesalers from competition and forcing state residents to choose exclusively form the limited selection of wine, beer and spirits that local wholesalers choose to bring into the state for sale.

In March of this year Republic National Distributing President Tom Cole told Shanken Communications that “The CARE Act is officially off the table.” Shanken Communications went on to report that the Wine & Spirit Wholesalers of America, who along with the NBWA were the only industry supporters of The Care Act, met with the Distilled Spirits Counsel of the United States in Palm Beach, Florida in February and decided to pursue a “rapprochement” over the issue (The Care Act) and to work more closely together to advance common interests.

In its annual report, the NBWA don’t disclose who the “leaders on Capital Hill” are that are prepared to re-introduce the Care Act. It’s possible that the statement in the annual report is a face-saving maneuver after the Care Act failed so spectacularly despite the NBWA making its passage its highest priority and expending considerable amounts of political capital and budget on the boondoggle.

Neither the beer nor the wine and spirit wholesalers were ever able to attract additional support from the industry in the three years they were pushing for passage of the Care Act. Beer, wine and spirit producers all opposed the legislation as well as alcohol retailers.  The latest version of the Care Act, H.R. 1161, attracted sponsorship from from only 122 members of the House of Representatives, less than 30% of the total membership of that body. Additionally, wholesalers were never able to find a sponsor for the legislation in the Senate.

Over the past 20 years, beer, wine and spirit wholesalers have worked vigilantly in oppose all reforms to the three tier system, even going as far as to advocate that wineries should only be able to put their products in the hands of consumers if the wholesaler gets a cut of the transaction. Wholesalers have consistently opposed the ability of consumers to purchase wines direct form out-of-state wineries and wine stores, even when the wines are not available in their own state.

They results of their efforts have been mixed. However, recently wholesalers have turned their attention to stopping privatization efforts in those states where the government controls the retailing of wine or spirits. Wholesalers spent millions of dollars in a failed attempt to stop privatization effort in Washington State for example.

There can be little doubt that more law suits will be filed against states that still blatantly discriminate against out-of-state businesses in an anti-competitive effort to protect politically connected wholesalers doing business in those states. State franchise laws, anti-warehousing laws, anti-direct shipping laws aimed at retailers and residency requirements are all bound to come under attack via litigation efforts in the coming years, if not sooner.

Again, the threat issued in the recent National Beer Wholesalers Association annual report may be entirely empty and an attempt to save face with members who saw millions of their dues wasted on a futile effort that was walled up by trade, media and consumer opposition.


5 Responses

  1. gregory graziano - October 15, 2012

    As long as the large liquor, beer and wine wholesalers lack 100% control over alcohol sales in this country they will continue to push this unfair act. They are scum!

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