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Wine Drinkers Beware: Congress Could Limit Your Consumption Print
House Resolution 1161 could prohibit shipping wine between states. Stop it.
By Tom Wark   |   Monday, 02 May 2011   |   06:07

Tom Wark"Politics and wine." Not a combination many of us contemplate. Wine and aroma … wine and taste ... wine and texture — yes. Wine drinkers are rarely aware of the nexus of wine and politics, but they go together every bit as purely as foie gras and sauterne. And it turns out that if we don't take the time to concentrate on the politics of our favorite drink, we may wake up to discover that the most important aspect of our avocation -- access -- is being curtailed.

House Resolution 1161, known as the Community Alcohol Regulatory Effectiveness Act, is presently sitting in Congress. If passed, it would significantly inhibit our ability to buy the wines we want.

First, some background.

The primary reason the United States Constitution was adopted in 1789 was not to guarantee Americans the right to free speech, religious association, freedom of assembly or a free press. It was to invalidate a number of laws that, adopted to protect local businesses, discriminated against the shipment of out-of-state goods. Such regulations severely hampered economic growth in America.

This problem was addressed with Article 1, Section 8, known as the Commerce Clause of the new Constitution: "The Congress shall have Power to regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes."

Its meaning is simple: The federal government, not individual states, will regulate trade between the states. The Commerce Clause is a guarantee that the American marketplace will not be subjected to interstate trade barriers.

Until recently, numerous states including New York, Texas, Maryland and Michigan banned residents from receiving wine shipped from vendors outside their borders -- blatantly discriminatory. These bans were challenged, and in 2005 the U.S. Supreme Court issued a ruling in the case of Granholm v. Heald holding they were unconstitutional:

"States may not enact laws that burden out-of-state producers or shippers simply to give a competitive advantage to in-state businesses."

The lesson of the Granholm case was that states could ban or allow wine shipments to consumers, but they had to treat in-state and out-of-state shippers equally. For example, if a state allows its own wineries and retailers to ship wine to its residents, it must allow out-of-state wineries and retailers to do the same. This important case held the promise of giving wine lovers in trade-friendly states access to the growing number of wines entering the American marketplace.

To a wine lover, it's imperative to be able to buy different styles and vintages from a variety of sources around the country, retailers who specialize in foreign wines and hard-to-find and collectible bottles, as well as domestic wineries and wine-of-the-month clubs.

Enter H.R. 1161, which would once again allow individual states to discriminate against out-of-state wine sellers. Congress seems poised to hand its right to regulate interstate wine commerce back to the states where discrimination against out-of-state wine sellers would become constitutional.

Why would Congress pass H.R. 1161 and move wine sales in America backward? Because wholesalers prefer it that way. The push behind H.R. 1161 comes from wholesalers, the wine, spirits and beer middlemen who must operate within state borders. They're the ones who make a living by getting the wine from the vintners (as well as the breweries and distilleries) and importers to the retailers. Wine shipped to a consumer from an out-of-state retailer or winery bypasses the coffers of the wholesalers — and alcohol wholesalers are among the most powerful special interests operating in Washington, D.C. Thanks to their considerable campaign donations to Republican and Democratic representatives, they were able to get H.R.1161 introduced into Congress, and it is gaining an alarming amount of support.

This is bad for consumers. Very bad. If passed, you will see a number of states adopt laws that once again discriminate against out-of-state wine sellers and make it impossible or very difficult for consumers to get the wines they want. Instead, they'll have to be content with the often paltry selection wholesalers make available to local retailers.

Don't let wholesalers or politicians tell you what wine you can drink. There's time to defeat H.R. 1161. Here's what to do:

  1. Go to the Free the Grapes website to send a letter to your congressional representative asking them to oppose H.R. 1161.
  2. Join the StopHR1161 Facebook page and stay informed.
  3. Sign your name to a petition opposing H.R. 1161.

Tom Wark has worked in wine communications for more than 20 years and is the executive director of the Specialty Wine Retailers Association.


Photo: Tom Wark.


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This is the most ridiculous law I have seen. New Mexico is up and coming and I think has a population growth in the Santa Fe Area. They should realize that this is a move backwards. They also need to re-consider corkage and come into the present century like the rest of the world.

Karol Bondy Ca and NM resident
a guest , May 07, 2011
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This new law is simply not taking the whole situation far enough in my opinion. States lose out on tax money all the time with online and catalog orders. Why should the alcohol industry be the only benefactors of laws like H.R. 1161? This country needs more lobbies just like the ones who work for alcohol wholesalers. With all of their payoffs and bulling those guys really know how to get things done. Big business as usual with a smile and a smack in the face is the foundation of a healthy economy. Just like water is not wet and the sky is not blue.
a guest , May 06, 2011
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This bipartisan legislation started because 40 state attorneys general who were concerned about growing threats to their alcohol regulatory systems need help from congress from litigation in court. I am not saying it is wrong or right, I am saying these tax dollars are a source of support for state government. And yes, wholesalers of wine and beer might lose revenue if all restrictions are lifted for direct sales. And yes, wholesalers pay plenty for taxes and licensing and get an abatement from our state if sold to another state so they can collect taxes. Should wholesalers and states be demonized because they want the revenue especially in the current economic condition?

Would it be easy to track private sales of alcoholic beverages from one state to another within your proposed system? I would love to offer some rare wine from the wholesaler I WORK FOR and sell them on eBay but it would not be legal.

Let's get really weird: The supreme court just decided that corporations are 'people' and can politically advertise without controls let's extrapolate so wholesalers can now sell to any state.

Rather than attack or name call someone it is more constructive to add comments directly in support of your argument. I voice my support for a change and I relay my restrictions in my industry and personal life and play the devil's advocate and you could care less.
a guest , May 05, 2011
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I am Not in favor of this bill
a guest , May 04, 2011
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Tom, thanks for the well written and articulate article. Keep up the good fight, all wine lovers aware of this legislation are united in opposition (not to mention producers!). Pay no attention to the "guests" behind the curtains, I guarantee they are in on the take. If not, I challenge you, guest, to come out from your anonymous hiding place and have a real conversation. Thanks again Tom.

-Wes Cook
www.bottlescene.com
a guest , May 03, 2011
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Guest:

Who ever suggested that wholesalers don't perform a needed function. More importantly, who ever suggested that wholesalers should go away??

However, in most states the use of wholesalers are MANDATED. That really needs to go away. If wholesalers' services are useful, they will be contracted for by suppliers without the need for a state mandate that they be used.

You are tossing up a red herring by suggesting that all will fall apart if wholesalers go away.

As for Tax payments to state, wholesalers have been trying to justify the state law that requires they be used between supplier and retailer for a long time by asking, "who will pay the taxes". Today retailers and suppliers are quite adept at paying taxes to the state and feds. suppliers and retailers are both quite adept at filing reports with the states and feds. The state will get their taxes if the use of wholesalers are de-mandated.

But that's not the point of this opinion piece. The point is that wholesalers are lobbying right now to STRIP wine retailers of their Commerce Clause protections against state-based discrimination. If this happens I promise that consumers will have less access to wine as they will have less access to wines from out of state retailers. Without access to out of state retailers, consumers are forced to purchase wines from local retailers that are, by law, supplied by local wholesales. And we know one thing for sure. Local wholesalers only provide retailers in a state with a SMALL FRACTION of the wines that are available in the American marketplace.

Sorry, I think your response is a bunch of BS.

Tom Wark...
a guest , May 03, 2011
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If there weren't middlemen, wholesalers, then selection for the average wine comsumer would be far less than it is today. Period! Sure, they like there system so Costco isnt ordering directly from a winery, but this isnt all about the wholesalers greed. Who is going to deliver that case of craft beer from a state 2000 miles away over to your neighborhood bar that you like to drink it? I guess THEY will be buying direct for your enjoyment. I think not. You are trying to pinpoint this issue on the wrong place. The government wants its taxes, all taxes. If you are buying wine from an out-of-state winery who are you paying tax to? And this is the Wholesaler's fault? Sorry, I think this article is a bunch of BS.
a guest , May 03, 2011
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Guest,
Rest assured, I am saving my sympathy.
a guest , May 03, 2011
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Save your sympathy for someone who wants it. This is about taxes not your selection restrictions and happiness. Congress doesn't sit around and wonder who we should persecute next like 'let's get the wine drinkers.' They worry about funding the government. Tax discussions are held on a billion blogs.
Now ask yourself 'What causes congress to limit my selection?' Everyone else pays their taxes as do we however reluctantly. And since you realize it, repeal our taxes while you are at it-they are really the same. Get PA and NH (and WY i think) open to private wholesalers think of THEIR selection. Be fair not selfish. You are not peculiar or one of a kind when it comes to taxes. However set up the taxable, practical system and I am with you all the way.

And when it comes to middlemen making money I am right there with you just not for healthcare and gasoline.
a guest , May 03, 2011
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a guest:

To answer your question, Yes. Consumers are worried about having their access to the wines they want curtailed as a result of HR 1161. You'll forgive me if I don't have that much sympathy for wholesalers, given that in virtually every state retailers and restaurants are REQUIRED to buy their inventory from Wholesalers.
Tom Wark...
a guest , May 03, 2011
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It is discriminating if State taxes are not collected and hard to monitor taxes being collected properly. Your complaint also allows for entities to sell in a state without having to pay overhead, get a retail license, wholesale license, rent etc. As a wholesaler in MA we pay for licensing from every state for which we sell to a wholesaler. Pennsylvania is State controlled as is NH and hard to sell, We have extreme difficulties getting free samples shipped from Europe and California which we still pay taxes on.
You are worried about your selection? These are restrictions on the industry without new congressional influence
a guest , May 03, 2011

busy
Last Updated on Monday, 02 May 2011 09:39
 

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