$90 Million—The Cost to Defend the Three Tier System
Why do wine and beer wholesalers deliver up more campaign contributions than all wineries, distillers, brewers and retailers combined?
Are the middlemen wholesalers more generous? Do they have money to burn? Do they have more to lose in the arena of politics? I think clearly the answer is, Yes. But most importantly is the issue of what they have to lose.
Below is a list of total contributions to state (not federal) candidates and state ballot initiatives for the past decade. Again, these are the totals given to state candidates. It’s at the state level where most of the action (political and regulatory) happens, not in Washington, DC.
| Year | Wholesalers | Wineries Distillers | Brewers | Retailers | Total |
| 2002 | $11,048,281 | $4,299,753 | $3,518,172 | $531,637 | $19,397,843 |
| 2004 | $11,137,050 | $3,835,473 | $4,802,401 | $537,370 | $20,312,294 |
| 2006 | $19,426,154 | $3,983,516 | $3,669,310 | $1,334,336 | $28,413,316 |
| 2008 | $12,321,689 | $3,667,620 | $3,414,865 | $661,880 | $20,066,054 |
| 2010 | $22,664,027 | $3,004,541 | $4,557,816 | $2,532,316 | $32,758,700 |
| 2012 | $13,146,454 | $2,607,803 | $3,368,866 | $1,045,700 | $20,168,823 |
| Total | $89,743,655 | $21,398,706 | $23,331,430 | $6,643,239 | $141,117,030 |
In the past decade, the Middlemen have given nearly $90 million to politicians and to ballot initiative campaigns. The vast majority of their donations to go incumbents. But what stands out here is just how much the Middlemen contributions dwarf those of all other members of the industry—brewers, wineries, distillers and retailers.
The primary goal of this largess is to keep the mandatory wholesaler rule in place. That’s the regulation in place in most states that require producers to only sell to wholesalers and the related rule that retailers and restaurants only buy their inventory form wholesalers, not from producers or their peers. Keep in mind, despite the fact that in most states producers and retailers are REQUIRED to do business with wholesalers, wholesalers are NOT REQUIRED to do business with producers or retailers.
Wouldn’t you spend whatever it takes to defend this kind of rigged game?
If you are interested in the $13 million figure that wholesalers spent in state-based elections in 2012, the breakdown of how much was spent by state is below:
| TX | $2,853,316 |
| IL | $1,761,702 |
| CA | $1,010,445 |
| NY | $922,877 |
| FL | $761,169 |
| OH | $624,819 |
| NC | $586,038 |
| IN | $451,505 |
| MI | $450,189 |
| GA | $431,021 |
| OR | $369,189 |
| TN | $354,018 |
| WI | $329,080 |
| WA | $299,958 |
| MA | $218,955 |
| PA | $180,180 |
| SC | $177,053 |
| MO | $174,357 |
| NV | $169,300 |
| OK | $109,866 |
| KS | $102,897 |
| WV | $70,300 |
| MD | $68,505 |
| IA | $64,750 |
| AR | $57,124 |
| KY | $54,950 |
| NH | $50,100 |
| AL | $49,500 |
| NM | $48,035 |
| RI | $39,050 |
| NE | $36,801 |
| ID | $32,786 |
| AZ | $31,373 |
| UT | $23,050 |
| MT | $22,060 |
| DE | $19,675 |
| CO | $19,450 |
| VT | $18,400 |
| VA | $15,900 |
| ND | $13,200 |
| NJ | $12,900 |
| MN | $12,030 |
| ME | $11,531 |
| LA | $10,250 |
| MS | $10,000 |
| CT | $8,850 |
| SD | $7,250 |
| AK | $500 |
| HA | $200 |
All figures were taken from “Follow The Money: The National Institute on Money in State Politics: http://www.followthemoney.org
What do you suppose accounts for the spike in 2006? Were more states trying to pass direct-shipping legislation, or something similar? It would be interesting to see a breakdown there, and walk it back. . .
Hi Brian,
In 2006 there was a ballot initiative in Massachusetts that, if successful, would have allowed food stores to sell wine. Wholesalers dropped about $4 million into the effort to stop that. That’s about $4million more than they normally give in an election cycle in Massachusetts. The Wholesalers won.
Tom,
now you have the opportunity to get into the distribution game at the ground floor. There is talk about using the three tier system for legalized pot sales.
Your opportunity is to outline the “correct” or “consumer friendly” structure for sales of a substance that I will assume you would agree may need to or will be controlled by state and local goverments. Is the proper way to allow sales of legalized marijuana the same as, say, laundry detergent? Or is there a compelling, rational, need for the state or local goverments to control that sale?
Curious as to how Tom Wark would structure this new (and possibly hugely profitable) industry segment.
check the prior shopping chronicle of the consumer which will give an exemplar about the thing that the customer may like to go for. Do this work in a pungent or sharp pain way so that it’s not only advantageous for the vocation but also beneficial for the client so that it becomes satisfied with the deals and increases credit in the company.
[…] Wark: “Why do wine and beer wholesalers deliver up more campaign contributions than all wineries, distillers, brewers and retailers combined?” (Because of the rents!) The North Carolina microbrewery […]
[…] Wark: “Why do wine and beer wholesalers deliver up more campaign contributions than all wineries, distillers, brewers and retailers combined?” (Because of the rents!) The North Carolina microbrewery […]
[…] Wark: “Why do wine and beer wholesalers deliver up more campaign contributions than all wineries, distillers, brewers and retailers combined?” (Because of the rents!) The North Carolina microbrewery […]