Battle lines draw up over proposed US shipping bill
- Monday 19 April 2010
Producers are mobilizing to kill a new House of Representatives bill they fear would block wineries’ direct shipments to consumers.
The measure, introduced on 15 April, is backed by distributors’ powerful lobby, the Wine and Spirits Wholesalers of America.
As battle lines are shaping up, two Congressmen, a Democrat and a Republican representing key California wine districts, have denounced the bill.
Tom Wark, a Californian who is executive director of the Speciality Wine Retailers Association, warned in his personal blog, Fermentation, that the wholesalers are ‘trying to pass the most onerous consumer wine law since the passage of the 18th Amendment’ to the Constitution ‘and the onset of Prohibition.’
To become law, the bill must go through a complex procedure. Passage in its offered form, or any form, cannot be foretold.
The political battle may take place largely under the public’s radar because it involves constitutional issues that might seem unrelated to economic concerns besetting the nation.
When the Constitution’s 21st Amendment ended Prohibition in 1933, it gave each state full control over regulating alcohol inside its borders.
However, the Commerce Clause, a fundamental Constitution provision, empowers Congress to regulate commerce among the states.
When the Supreme Court declared in May 2005 that states must allow out-of-state wineries to ship directly to customers if their own wineries do so, this landmark anti-discrimination ruling was grounded in the Commerce Clause.
The ruling triggered five years of legal challenges to shipping laws, resulting in legislation permitting various forms of direct shipments in some 37 states.
Such sales bypass wholesalers’ monopolies in standard three-tier regulatory systems, under which producers must sell to middlemen, who sell to retailers.
Wholesalers and their allies in state capitals say their bill would, as the wholesalers’ CEO Craig Wolf put it, enable states ‘to fend off litigation’ that might ‘destabilize or destroy’ states’ regulatory authority.
An aim of the House bill, its opponents say, would be to impede wineries’ and consumers’ ability to bring lawsuits against states’ wine-shipping laws they consider discriminatory.
Mike Thompson, co-chairman of the Congressional Wine Caucus, told fellow Congressmen that the measure would ‘devastate California’s and other states’ wine industries, stunt economic growth, and harm consumers by allowing discriminatory law and regulation to be passed and go unchallenged.’
One result might be reduced choices for consumers, especially from artisanal producers whose wines wholesalers won’t handle.