Over the past weeks I’ve talked some in this space about HR 5034 and the negative affects it could have both on my business as well as on the wine industry in general. I know that although this law would in fact cripple the only growth area of the wine industry in the United States (small family owned wineries dependent on shipping directly to consumers) I have to be concerned when I hear Tom Wark who is not only one of the three most influential wine bloggers on the planet, but also the President of the Specialty Wine Retailers Association say that he gives this bill a 30% chance of passing.
To me, although I’m interested in politics, being a registered independent means that I feel like politicians from both sides should be not only willing to hear my cares and concerns, but even court my vote. My local representative in the House of Representatives is Duncan Hunter, who fits largely with the image of San Diego politics 30+ years ago, being intensely pro military (a very good thing) as well as being extremely conservative socially (personally, I like moderates best).
I wrote him an email explaining my side of the story which can be summed up in the following points:
-Wine already faces more strict shipping regulations then guns or ammunition.
-Does it logically make sense that an under-age drinker wants to wait 2 days to obtain their alcohol, even if we discount the fact that all common carriers (Fedex, UPS, etc) require a person 21 years of age to sign for the shipment? Wouldn’t it be easier to pay that same 21 year old person to buy the alcohol from the local grocery store?
-The national wholesalers behind the bill have not been able to show a single study to show that direct shipments of wine lead to underage drinking.
-Although the stated intent of this lawsuit is to stop lawsuits fighting state specific shipping regulations, the same sponsors of this bill are currently challenging California’s shipping law in court in this state. If lawsuits shouldn’t be used by consumers fighting for the freedom to choose their own wine, why can the industry use them?
Please don’t misunderstand my points, I am not asking for the rights to ship to any consumer anywhere without regulation. I’m simply asking for the right to apply for a permit, pay taxes and deal with consumers interested in my wine and wine clubs. I believe that freedom of choice should extend to as many states as possible. If Utah’s consumers do not want to approve direct shipment of alcohol, I can understand that completely, but New York State should not be allowed to violate the commerce clause by allowing their in state wineries to ship to consumer in the state, while not allowing out of state wineries to do the same.
I’m not even saying that I think distributors should go away completely. We deal with some of these folks on a daily basis and some of them provide an incredible service and the widely distributed wines offer people an entry into the market and help to create a market of consumers that my company, Uncorked Ventures focuses on servicing as their wants and needs change over time. To be even more clear, there are distributors that do an outstanding job including some of the people at Monterrey Bay, TGIC and even Southern Wine and Spirits. The employees that we deal with in those companies don’t see my company as a threat, one of the wineries we represent makes 650 cases of wine a year. Many distributors can’t represent anyone who makes under 10,000 because of their wide distribution channels.
Although I was quite impressed to have received a response from Mr. Hunter I was somewhat disappointed at the content, simply because it seems to include a number of talking points taken directly from the wholesalers.
|April 28, 2010
Mr. Mark Aselstine
11779 Stoney Peak Dr, Apartment 626
San Diego, CA 92128-6432
Thank you for contacting me with your concerns regarding H. R. 5034, the Comprehensive Alcohol Regulatory Effectiveness (CARE) Act of 2010. It’s good to hear from you.
As you are aware, the CARE Act clarifies the intent of the 21st Amendment in granting states primary authority to regulate alcohol and reaffirms Congress’ support for state-based regulation. It is my understanding that this legislation was introduced in response to the number of lawsuits challenging state regulations and not in an attempt to prevent small businesses from directly selling their product to the consumer.
You may be interested to learn that the House Judiciary Subcommittee on Courts and Competition Policy recently held a hearing on the legal issues concerning state alcohol regulation, which you can review by visiting http://judiciary.house.gov/. Please be assured that as this matter is further discussed, I will keep your thoughts and concerns, closely in mind.
Thank you again for contacting me. Should you have any additional questions or concerns, please do not hesitate to let me know.
Please visit my website at hunter.house.gov to sign up for my e-newsletter and receive electronic updates.
The bold is my addition to bring your attention to a part which sounds pretty familiar:
According the Wine and Spirits Wholesalers of America:
America’s regulated three-tier system is – hands down – the best beverage alcohol distribution system in the world. It stimulates innovation and competition and provides consumers with unprecedented choice and variety, requiring reasonable and appropriate regulations promoting temperance, ensuring effective state and federal tax collection and creating a safe and orderly market distributing beverage alcohol.
It is important that states retain their constitutional power to regulate the distribution of beverage alcohol and are able to fend off litigation, which serves to destabilize or destroy that authority. Although we may oppose direct shipping and self-distribution as a matter of policy, our goal is not to overturn existing state laws. We simply believe the proper forum for resolving legitimate differences over these issues is in the state legislatures – not the courts.”
I will additionally point out that aside from the obvious inconsistencies which come up in the Wholesalers statement (how do you have adequate choice when there are 5 national distributors and 6,000 wineries in the United States?) I also wonder why using the courts would be used for such things like integrating schools, the death penalty and literally every social issue of our time, but somehow alcohol distributors and certain states should be exempt from those same challenges.
My overall frustration comes mostly from the fact that the Supreme Court just decided this exact issue in 2005 in GRANHOLM V. HEALD in which the court decided that State or territorial regulations may not facially discriminate, without justification, against out-of-state producers of alcoholic beverages in favor of in-state producers.”
I don’t think it’s asking too much to have a state prove why they need to break the commerce clause before they are allowed to do it. If they can break it with impunity, what does that say not only for the judicial branch of our government, but the Constitution itself?
Mr Hunter, all we’re asking for is a fair playing field, one which is already accorded to our competitors which are based outside of California.