No on HR 5034!
I haven’t yet addressed the issue of HR 5034, now going through the U.S. House of Representatives, because it seemed complicated, and I didn’t want to take a position until I understood the details.
I wanted to try and see this from the distributors’ point of view. There may be a case in favor of restrictions on alcohol sales of the kind they’re trying to push through in 5034. After all, alcohol isn’t your average consumer product, it’s a drug. If it gets into the wrong hands, it can cause lots of pain. So I didn’t want to have a kneejerk reaction and just say, “All distributors are jerks,” even though my initial instincts were strongly in favor of direct shipping. Sometimes, instinct needs to be tempered by informatio, and gathering information takes time. In the end, though, I’m coming out against 5034, because the arguments in favor of it are very weak, and they don’t stand up to intellectual scrutiny.
Most of what I knew about 5034 came via Tom Wark, who’s blogged extensively against it at Fermentation. As Tom explained it to me, 5034 was a sort of end run around the Supreme Court’s famous 2005 Granholm v. Heald decision, in which SCOTUS said (I’m paraphrasing) states cannot prohibit wineries from other states from sending in their wines to consumers, if those same states allow their own wineries to disseminate wines. It was a basic issue of fairness, but also seemed to comply with the Commerce Clause (Article I, Section 8, Clause 3) of the U.S. Constitution, which gives the Congress — not the separate states — the power to regulate interstate shipping.
That was a good development, especially for smaller wineries, who had found themselves locked out of the distribution system. The smaller wineries wanted to be able to ship their wines directly to customers anywhere in the country, especially in the age of the Internet; and Granholm v. Heald seemed to give them that right (although when I interviewed Ken Starr, who successfully argued the case, he told me it would be many years before there was unfettered wine shipping across U.S. states, and boy, was he right).
Tom also explained to me that 5034, if enacted, “would give states the ability to enact discriminatory bans on wine shipping,” reasons too complicated to get into. Bottom line, according to Tom: “The law encourages and will result in states… passing bans on direct shipping that cannot be challenged in court.” (Disclosure: Tom is the paid executive director of the Specialty Wine Retailers Association, which is very anti-5034, and so he’s not exactly unbiased. But I am.)
I always operate on the theory that you can figure out what’s up with an issue by seeing who’s for it and who’s against. So who’s in favor of 5034? Let’s start with the Wine & Spirits Wholesalers of America. In a press release last April, they “encouraged members of Congress to support state-based regulation of alcohol and look beyond the mischaracterizations and misinformation being circulated” by its opponents, like Wark and SWRA. They took a states-rights position — the kind that conservative red states always take when they want to be discriminatory — and said 5034 would “place the burden in litigation where it should be: on the plaintiff challenging a state alcohol law.” That’s pretty much the same flimsy argument that opponents of Brown v. Board of Education used in the 1950s: the Federal government doesn’t have the right to desegregate public schools, and if a black family doesn’t like a school’s admission policy, they can sue that school board in court. If not for Brown v. Board, we’d still have segregated schools today.
WSWA also argued that 5034 doesn’t violate the Commerce Clause because it “does not expand state legislative or regulatory authority into what is currently and appropriately federal jurisdiction.” This seems to me to be disingenuous, an Alice-through-the-looking-glass playing with words. WSWA says that the Federal government, through agencies like TTB, FTC and FDA, remains free to regulate alcohol “in such areas as labeling, advertising and food safety.” Okay, but if the Feds can regulate in those areas, why can’t they regulate interstate shipping? Totally bogus argument.
Finally, WSWA asserts 5034 “does not favor any segment or tier of the industry.” Puh-leeze! Everybody knows 5034 favors wholesalers. Who’s kidding whom?
Who else is in favor of 5034? Well, there’s the National Beer Wholesalers Association (NBWA), whose position is a carbon copy of WSWA’s (and for similar reasons). Then there are 5034’s backers in the Congress, about 100 of them. There’s ample evidence that WSWA and NBWA have contributed boatloads of money to their supporters, as for instance here and here and, especially, here, where you can draw direct lines between WSWA’s main contributors (all the big distributors) and individual congressmen who are beneficiaries of its largesse (and by the way, this isn’t a partisan issue: Democrats and Republicans alike take campaign donations from WSWA and NBWA).
So what we have is a collection of odd bedfellows lined up in favor of 5034: wholesalers, distributors, and the politicians who take their money to run for election or re-election.
Now, who’s against 5034? Like I said, there’s Tom Wark and his Specialty Wine Retailers Association. No surprise there, since their members are smaller wineries and merchants, and their slogan is “wine without borders.” Also against the bill is Free the Grapes!, which is a leading group in favor of direct interstate shipping of wine; various state legislatures (including the New Jersey Senate, where my cousin, Sen. Loretta Weinberg, voted to open up interstate wine shipping); the Wine Institute; Family Winemakers of California, and many congressmen from wine-producing districts, including Rep. Mike Thompson, who represents the North Coast.
For me, the good guys are against 5034 and are in favor of the free, unfettered shipment of alcohol, to and from adults, throughout the 50 states. Isn’t that as it should be in America — isn’t that as Thomas Jefferson intended? I don’t want to say those in favor of 5034 are bad guys, because I’m sure they’re good people who are simply trying to protect their economic interests, same as all of us do. But I’m siding with those trying to defeat 5034. It’s a bad bill. Please call your Congressional representative and urge him or her to oppose it.