The Flip-Flopping Response to the Supreme Court Wine Case
When you read or hear a group or person issue forth with a non-sequitur, the first thing you ought to ask is, why are they not addressing the point or the issue.
Emma Balter writing for the Wine Spectator has done a really great job of covering the process and implications of the Supreme Court’s recent ruling in Tennessee Wine v Thomas—the ruling that declared states may not abuse their 21st Amendment powers to discriminate against out-of-state retailers.
In her most recent coverage of the issue, she highlights a statement made by the Wine & Spirit Wholesalers Association (WSWA) in response to the June 26 Supreme Court ruling that invalidated the WSWA’s view of how the U.S. Constitution works:
“Since alcohol is unlike any other consumer good, the 21st Amendment was enacted to give states authority to regulate alcohol as they see fit and that authority remains broad,” read a statement from the Wine and Spirits Wholesalers of America. “In exercising that authority, states have enacted the three-tier system to promote accountability, public safety, and economic competition. The vast majority of state alcohol laws are not impacted by this ruling.”
It’s as though the WSWA didn’t notice the Supreme Court issued the Tennessee Wine v Thomas decision. Their statement is a non-sequitur.
For more than a decade the WSWA and its associates at state-based wholesaler associations have been issuing forth with declarations that if states were not empowered to discriminate against out-of-state retailers and other interests with protectionist laws, the entire structure of the American alcohol regulatory system would fall to pieces. These declarations came in press statements, in court cases and in Amicus briefs in court cases.
Prior to the Granholm v Heald Supreme Court Decision that solidified the interpretation of state power under the 21st Amendment as being limited, particularly where discrimination against out of state interests was concerned, American wholesalers and their associations claimed this very type of anti-discrimination decision would destroy the fundamental “Three Tier System” of alcohol regulation. The said the same think in the wake of Granholm and they said the same thing in advance of the Tennessee Wine case.
Here is Craig Wolf, the former CEO of the WSWA, making the claim in a 2009 NY Times article:
“The bottom line is you whittle away at the system little by little, and what you end up with is what you have in England, where cheap alcohol has led to binge drinking through the roof. We don’t have tainted and counterfeit products because of wholesalers. This is the gold standard. These things are going to be lost if regulation is ended.”
In its concluding paragraph of an amicus brief filed in the Supreme Court’s Tennessee Wine v. Thomas case, the WSWA again alludes to the catastrophe that will occur were the Court to, as it finally did, uphold a lower courts ruling that protectionist-inspired discrimination against out-of-state retailers is unconstitutional:
“Durational-residency requirements are a legitimate exercise of state regulatory authority under the Twenty-first Amendment. A decision categorically invalidating those requirements under the dormant Commerce Clause would call into question the validity of the three-tier system itself and start the Court down the path of effectively reading Section 2 out of the Twenty-first Amendment.”
The National Beer Wholesalers Association too warned of dire consequences if the Supreme Court were to rule exactly as it ruled. From its amicus brief in the Tennessee Wine case comes this warning:
“It would be virtually impossible for the Tennessee Alcoholic Beverage Commission to regulate effectively over 640,000 alcohol retailers scattered across the country without a regulatory system that funneled all alcohol being sold in the state through in-state wholesalers and retailers who were subject to audit, control, and enforcement action by the Tennessee Alcoholic Beverage Commission. Similarly, it would be virtually impossible to collect the millions of dollars of taxes levied on alcohol sales without such a system. In short, there would be no accountable, transparent and orderly alcohol distribution market without a three-tier system.“
In the concluding part of the Michigan Beer and Wine Wholesalers Association’s amicus brief submitted in the Tennessee Wine case, we see a dire plea to not let consequences of “great significance” be wrought if the Court sides with non-discrimination:
“The Court’s decision in the present case will likely have great significance with respect to the ongoing attempts to dismantle three-tier systems and, effectively, the Twenty-first Amendment.”
Now all of a sudden, we hear that the state’s authority to regulate alcohol “remains broad and that “the vast majority of state alcohol laws are not impacted by this ruling.”
It’s as though the wholesalers are saying, “Hey….all that stuff we said would happen if you ruled the way you did….just kidding!”
So, to return to my initial thought, why is the WSWA not addressing the issue (which turns out to be that their long-held collection of kooky ideas of what a state may do with its power to regulate alcohol has been thoroughly dismantled). Why are they saying “all is well” after the Tennessee Wine ruling when before the ruling they said the sky would come crashing down if the Court ruled as it did?
It’s a good question. And perhaps someone will ask it of the wholesalers. Clearly, this intellectual turn around is meant to achieve something. I just can’t figure out what that objective is.
What I do know is this: It’s difficult to trust the integrity of a person or organization when they are so willing to change their tune when the winds change direction.