Wine and Spirit Wholesalers: Profiles In Whining
Imagine being such a whiner that you felt it necessary to issue a press release to say just how much you didn’t like an article that didn’t include your unsubstantiated propaganda. Meet the Wine & Spirit Wholesalers of America, the greatest source of tears and whining in the alcohol biz.
The WSWA’s recent press release condemning a Daily Beast article by Susannah Skiver Barton takes issue with the fact that the WSWA’s position on interstate shipment of spirits was “misrepresented”. But let’s be honest. What pisses off the wine and spirits trade organization that represents middlemen wholesalers is that they can’t spend $17 million dollars on the media to get them to embrace their foolish and unsubstantiated propaganda concerning the interstate shipment of alcohol.
It should be no surprise that the $17 million dollars this national trade association of anti-consumer monopolists would have an impact on legislation concerning spirits shipping. That’s right, in the past 20 months WSWA has contributed more than $17 million to state political campaigns. How much is that? It’s four times more than has been spent on campaign contributions than all the beer, wine and spirit producers, as well as all alcohol retailers…COMBINED.
See that’s the thing about an independent media: It’s really hard to buy them with cash and therefore equally difficult to get them to swallow straight-up propaganda.
The WSWA, as it notes in its press release, is “disappointed with the one-sided reporting on direct-to-consumer (DTC) shipping of alcohol” it perceived in the Barton Daily Beast article. What specific information did the WSWA see that disappointed them so?
“Skiver Barton fails to mention the obvious differences between consumer products and alcohol. Alcohol is not like every other good or product, and consumers know this.”
This is exactly as silly as it reads. Not only is alcohol “not like every other good or product, as WSWA points out, neither are shoes or hair conditioner or bug spray or over-stuffed chairs “like every other consumer good”. This line of reasoning sloppily deployed by WSWA is the same thing they have been shouting about for decades. It comes off just as silly today as it did 30 years ago.
WSWA is also upset that Skiver Barton did not repeat WSWA’s claim that “In a 2019 national survey by the Center of Alcohol Policy that WSWA shared with Skiver Barton, along with…86% of respondents agree that alcohol is a product that needs to be regulated and 82% agree that alcohol is different than other products and should be regulated differently.”
I wonder if WSWA mentioned to Skiver Barton that this 2019 “survey” was commissioned by and published by….wait for it….alcohol wholesalers. But more to the point, Skiver Barton goes to great lengths to not and WSWA knows that direct-to-consumer shipments of alcohol ARE regulated differently than other products. It is unnecessary for producers of shoes, hair conditioner, bug spray and over-stuffed chairs to pay for a license in every state to which they want to ship their shoes, hair products, sprays and chairs. These other products need not submit reports to the states outlining what was shipped to consumers, when it was shipped, how much was shipped, to whom it was shipped and the cost of the shipment. Nor do these other products have to submit themselves to the legal jurisdiction of the states to which they ship their shoes, sprays, chairs and hair products. Nor do these other producers have to obtain adult signatures from the consumers to whom the chairs, sprays, hair products and chairs are shipped.
WSWA in their press release goes to great lengths to note that “Drizly, the leading technology platform that enables on-demand alcohol delivery from local, licensed alcohol retailers, recently acquired by Uber, was deemed a “façade for retailers.”
The fact is, just as Skiver Barton says in the Daily Beast article, that Drizly IS in fact a facade for local retailers. Drizly only delivers what is already in the retail stores local to the person ordering the product. And as SkiverBarton points out, as a result “When it comes to spirits, right now you’re pretty much stuck with what’s available in your area.” What this means I that the only spirits products available to order online from Drizly is the same pitiful collection of spirits products that local wholesalers sell to those local retailers. But what’s really interesting is what Skiver Barton did not note about Drizly and what WSWA does not point out in their breathless press release: WSWA was an earlier investor in Drizly! So much for telling the full story.
WSWA is upset that Bardon does not pass on its claims that DTC shipping “‘increases Underage Access, Increases Access to Counterfeit/Illicit Product, Loses State Tax Revenue, Enables Bad Actors at the Expense of State Businesses, Creates an Uneven Playing Field”
I suspect the reason Barton didn’t include these claims is that she understands that each and every one of them is untrue and are fabrications of the whining minds of the wholesalers who can’t stand the fact that consumers want something more than the crappy selection of spirits wholesalers offer up in states. Think for a moment about the idea that consumers being able to purchase craft spirits from an out-of-state distiller or retailer creates an “uneven playing field”. The alternative to this (which is the reality in most states) is that wholesalers get to pick and choose which distillers may appear on a the shelves of retailers in the states and if a wholesaler in the state doesn’t choose a product, consumers can’t get it. Even playing field? For whom? The consumer?
In the end, it’s somewhat surprising that the Wine & Spirits Wholesalers Association would be so willing to open themselves up to ridicule by issuing this kind of whining press release. The problem is that they have no perspective. The problem is also that booze wholesalers feel entitled after decades of being protected from competition and spending millions on campaign contributions to control the narrative. But they can’t do that with the media. This is precisely why you see so many articles like Ms. Barton’s at Daily Beast that outline just how screwed consumers are with the archaic system of alcohol distribution that does more to keep the rising tide of craft brands out of the hands of so many who would be willing to purchase them if they could only find them.
As a consumer and sometime retail employee, I am always grateful for your fearless parsing of the realities of our system which remains a captive of interests of the 2nd tier. Seven years ago I thought I would have no trouble continuing the Moscatel tonico (cheap Moscatel de Setubal and tonic with a slice of orange) habit I developed traveling through Portugal. I spent months trying to get one of the two (JM Fonseca or Bacalhoa) into Colorado. Retailers were helpful, but we always dead-ended at the distributors and wholesalers. These people didn’t have the vision or imagination or creativity to understand that they could “make a market” and introduce a new, “sessionalble” long drink perfect for summer in the US. But they were great at making excuses for why Moscatel “wouldn’t work” in Colorado.
Statutory Authority and Responsibility
In 2000 the Homeland Security Act rendered functions of the Bureau of Alcohol, Tobacco and Firearms (ATF) into two new organizations. This Act created TTB.
Under the Act, the TTB is responsible for administration and enforcement of:
Federal Alcohol Administration Act, 27 U.S.C. chapter 8 (FAA Act), including The Webb-Kenyon Act, 27 U.S.C. section 122.
Federal Alcohol Administration Act
The FAA Act provides for regulation of those engaged in the alcohol beverage industry, and for protection of consumers.
The Webb-Kenyon Act prohibits the shipment of alcohol beverages into a State in violation of the receiving State’s laws.
However, while ATF (TTB) is vested with authority to regulate interstate commerce in alcoholic beverages pursuant to the FAA Act, the extent of this authority does not extend to situations where an out-of-State retailer is making the shipment into the State of the consumer.
May the Statutory Authority shut up all this propaganda against out-of-State retailer shipments?
So, the conflict b/w the States Police Powers over public health, morals, and Economic welfare vs the Federal’s Govts. powers over interstate commercial commerce.
Delegated Federal powers (Interstate Commerce clause) vs the reserved rights of States guaranteed by the 10th Amendment.
Interstate commerce interests collide with states’ Police interests. Interstate Commerce power vs Local Police power.
(1913) Webb-Keyon Act (pro and con)
1. Responding to Anti-Saloon League complaints that it was impossible to enforce state prohibition laws in the face of a flood of interstate liquor shipments.
2. The main purpose of the Union of States vs the original confederacy of states was to relieve the commerce between states of the burden of local jealousies.
Taft’s veto or Webb-Kenyon Act – re: Interstate commerce clause
“It was certainly intended by that clause to secure uniformity in the regulation of commerce between states. To suspend that purpose and to permit the states to exercise their old authority before they became states, to interfere with commerce between them and their neighbors, is to defeat the constitutional purpose.”
The Webb-Kenyon Act was the “solution” that Congress, and later SCOTUS confirmed 7 to 2, that domestic state interest is of higher importance than interstate commerce interest.
But here’s the crux of the question in “State interest”. See, the 10th gives states all the powers not enumerated in the constitution. BUT the commerce clause IS enumerated.
“Our problem is whether Congress has any discretion whatever to yield to the state police power at all, in any event; in other words, whether it has the power to GIVE the state police interest recognition as superior, where in its judgment it decides that, in fact, it is superior. “
If the commerce clause is shown to be of a superior compelling interest in this situation, then would it be the case that anything up for sale in one state is up for sale in all states? It’s a good question.
Let’s try some examples. Could Washington State Apple growers be prevented from selling their Apples in New York State? No. Why there’s no compelling public safety issue at hand.
Could Oregon and Washington Prevent California wines from entering their markets on the ground that it has been found that CA wines have higher potential Alcohol and Oregon, and Washington State are trying to prevent drunk driving? I don’t think so.
So, how do you stop one state’s laws from legalizing marijuana become 50 state laws? I guess Congress must carve out a rule….and we’re back with and Webb-Kenyon Act and the 21st amendment.
BUT Granholm v Heald ruling said it was unconstitutional for a state to allow direct to consumer wine shipments from in-state shippers but not from out-of-state wine shippers.
So, the question suddenly becomes. Does a state allow in-state liquor stores to ship wine and liquor shipments directly to its residents? If yes…… the commerce clause should prevail. If no, then perhaps Webb-Keyon Act prevails.
The question of the validity of the acts could be challenged again – post-Granholm and a modern understanding of the commerce clause in liquor shipments.
You didn’t get the point. In 2000 ATF has received a number of requests from various States for their assistance in the enforcement of State alcoholic beverage laws. The ATF responded with the Ruling that while they will take administrative action against a basic permit where a basic permittee ships alcoholic beverages into a State in violation of the laws of that State, they will not enforce any state law under Webb-Keyon Act when an out-of-state retailer will do the same. After 2000 this authority was moved to TTB.
Jeremiah S re: Statutory Authority and Responsibility.
Umm….currently in case you haven’t heard the OSHA Covid-19 statute is being challenged in the 6th Circuit. What’s the connection? Law or a regulatory agency
The OSHA statute being a challenge in court may lead to the striking down of the horrible Chevron doctrine that SCOTUS handed down in 1984, which basically said that administrative agencies are the best place to interpret their enabling statutes (TTB).
See, liberals can’t help but shoot themselves in the foot. Conservatives have been wanting to rid the Chevron doctrine for decades and this may be the case that does it in?
So, Jeremiah if you think the interstate commerce clause is going to be left to the decision-making authority of TTB rather than courts…
…..you’re as mistaken as Biden administrative OSHA ruling….which by the way OSHA is 0 for 6 in court rulings.
Lawlessness reigns in the country? This is true.