A Jigger of Blog

Eric Asimov, the NY Times wine reporter, had a piece earlier this week on HR 5034, the Comprehensive Alcohol Regulatory Effectiveness Act of 2010. The Orwellian-named CARE Act would would “severely restrict direct interstate shipping of wine by retailers.” The bill is being pushed in Congress by beer and wine wholesalers who are threatened by online or direct from winery/brewery/distillery sales that leave them – the middle man – out of the money making process.

Yet as welcome as these lifelines are, they may be threatened by a bill introduced earlier this year before the House of Representatives, the Comprehensive Alcohol Regulatory Effectiveness Act of 2010, or H.R. 5034, which has the potential to severely restrict direct interstate shipping of wine by retailers. Direct sales from wineries could be threatened, too, although the current language of the bill appears to focus more directly on retailers….

Opponents, however, including wine and beer producers, retail shops and importers, assert that states already have ample regulatory authority. They say the bill is meant to protect beer and wine wholesalers, who have been cut out of the loop by the rise of direct sales. Wholesalers have set their well-financed lobby to work for the bill and have liberally doled out campaign contributions to supporters.

The industry is threatened that other businesses are able to use internet commerce to break their hold on what Americans are able to use their money to purchase and drink when it comes to wine. Their lobbying arm, the National Beer Wholesalers Association, prominently features a promotional statement on HR 5034 on their website. According to OpenSecrets.org, the National Beer Wholesalers Association is the fifth largest federal PAC this election cycle. They have spent over $3.1 million dollars just in the last two years. Obviously this is a high priority bill for them and they’re spending to get it through Congress.

The most laughable part of Asimov’s article is this:

Wholesalers argue that they are not acting to protect their own financial position but the rights of states.

“Our main concern is making sure states can continue to effectively regulate alcohol and maintain the system that serves the public well by balancing competition with an orderly market,” said Rebecca Spicer, a spokeswoman for the National Beer Wholesalers Association.

Yeah, right. The wholesalers lobby is using a states’ rights canard to appeal to Republicans and Blue Dogs (who make up most of the bill’s sponsors). The “balancing competition” they support is simply a way of using their influence in government to crush competition and reduce consumer choice. This is about a major business lobby using their influence in Congress to try to quash small businesses who provide a meaningful service to consumers: increasing selection and quality of wines on the market. Asimov notes, “The bill, though, which is unlikely to come up for a vote until next year, would clearly mean a narrowing of choices for consumers.”

Hopefully HR 5034 doesn’t get a vote in Congress any time soon, but with 151 cosponsors, I have to assume that it will at some point next year.