Issue link: http://winesandvines.uberflip.com/i/66135
EDIT OR' S LET TER Speak Out Against the CARE Act Wineries should make sure the wholesalers' bill dies again T he CARE Act is back in Congress this year, and Wines & Vines still doesn't care for it. Wineries, brewers, dis- tillers, retailers—even beverage importers—are speak- ing out against the cynically misnamed legislation that would give wholesalers much more influence over al- cohol sales in individual states. We think the bill now named House Resolution 1161 (known as HR 5034 in the last session of Congress) is bad for consumers, is in- herently anti-free market and most of all is bad for our many, many readers that sell wine direct to consumers. We encourage everyone involved in wine production to get informed about this bill, if they are not al- ready, and to let their elected offi- cials know that wineries and grape- growers are against it. The bill failed to get past committee in the last Congressional session. Let's make sure it fizzles again this time. Here is why it's important that HR 1161 does not become law. What the legislation intends The CARE Act supposedly stands for Community Alcohol Regulatory Ef- fectiveness. The beer and wine whole- salers who back it are using their old tactic of posing as the protectors of underage youths and proponents of states' rights. What the wholesalers are really doing is protecting their virtual monopoly as the distribution chain for beer and wine. The bill would enable states to U.S. Rep. Jason Chaffetz, a Republican from Utah, authored HR 1161. Its sponsors are almost evenly divided between Republicans and Democrats. It is difficult to say whether this year's CARE Act stands a better chance than the previous version. It does have fewer sponsors, and with more Republicans in the House, more represen- tatives may understand how anti-small business the bill is. Wineries and their partners, the grapegrowers, should make sure that HR 1161 dies on the vine again this year. Heroics are not required. Speaking View Video up is. All winery owners and sup- porters in the winemaking commu- nity who agree with the arguments against HR 1161 need to contact their representatives and ask them to oppose the bill. Understand that the wholesalers have an inside track with members of Congress, having cultivated rela- tionships for decades and spent mil- lions of dollars on campaign contri- butions. Still, wineries have a lot of clout of their own. Wine Institute and WineAmerica are all over this issue, lobbying the key representa- tives who will decide if the bill will come to a vote, and presenting the many logical arguments against it. Middlemen want to protect their turf enact protectionist and anti-compet- itive laws that would limit consumer choice, harm vintners, brewers, dis- tillers, importers and retailers. HR 1161 would strip away Com- merce Clause protections that allow regulated interstate shipment of wine to consumers, upend decades of settled case law and under- mine federal authority over alcohol. The beer wholesalers are using the legislation to fight off big against wineries that ship direct to consumers. Democracy in action Individual winery owners, winery employees, grapegrowers, consum- ers, retailers—all of those who may have to pay more and jump through more bureaucratic hoops if the bill passes—should contact their representatives with personal messages against HR 1161. It's de- mocracy in action: letting the law- makers know what the majority of people want, and not letting the few with the most money set government policy. The Wall Street Journal said it well in an April 27 editorial: "It's chain retailers who would like to buy beer direct from the brewer- ies. For wine wholesalers the primary incentive is the same—mon- ey—but they are not so much fighting retailers as protecting their turf against wineries that ship direct to consumers in their states. Peanuts for the wholesalers Wholesalers already handle about 98% of the volume of all do- mestic wine sold. Direct-to-consumer wine shipments only ac- count for about 1% of sales. That number is peanuts for the big wholesaler companies, but DtC sales can mean the difference be- tween success or failure for thousands of small wineries. 10 Wines & Vines JUne 2011 hard to imagine Congress giving states the authority to prohibit Am- azon or any other online retailer from shipping its products directly to consumers. Yet that's exactly what they're trying to do with wine. Sounds to us like a case of sour grapes that deserves to be stomped." Keep in mind that even though the Congressional sponsors of HR 1161 presented it as a way to protect the public, it is really intended to put more money in the middlemen's pockets by doing an end-run around the U.S. Supreme Court and pre-empting the Constitution. Let's take care that the CARE Act doesn't become law.