Alcohol Groups Speak Up In Opposition To HR 5034

Last week several alcohol industry groups wrote a joint letter to the members of the U.S. House of Representatives in opposition to HR 5034, the bill that would essentially accomplish an “end-run” around the 2005 Supreme Court ruling in Granholm v. Heald (544 U.S. 460).  The letter appears in it’s entirety below.

The ramifications of HR 5034 would dramatically alter the landscape of shipping alcoholic beverages across state lines, and would seriously hinder consumers’ access to small production wines to whatever wholesalers decided, in conjunction with lobbyists and state legislators, to offer in a particular state or market.

David Honig

David Honig of Palate Press wrote a thorough analysis of the history of alcohol distribution, and the potential effects of HR 5034, also known as the “CARE” Act (Comprehensive Alcohol Regulatory Effectiveness” Act).  Honig writes:

“…the idea of HR 5034 is to turn over the decision about who gets to buy which wine to the lobbyists for wholesalers, working in concert with an individual State’s domestic wine industry. If the bill passes, consumers will be limited to locally-produced wine, plus whatever the wholesalers choose to buy. Unfortunately, wholesalers tend to buy very large-production wines—the type they can buy by the pallet, rather than the case. Both the consumer and the small and mid-size wineries will suffer as a result.” You can read the entire article here.

This is a complicated issue with Constitutional ramifications.  HR 5034 has been promoted by the National Beer Wholesalers Association (NBWA) and the Wine & Spirits Wholesalers of America (WSWA), and appears to be a “full-court press” by the wholesalers to gain a monopoly of alcohol distribution.

Letter to Members of the U.S. House of Representatives

The letter below was signed by the Distilled Spirits Council of the U.S. (DISCUS), Wine Institute, Beer Institute, Brewers Association and WineAmerica. It reads:

“Dear Member of Congress:

“We, the undersigned beer, wine and spirits associations representing virtually all alcohol beverages produced in the 50 states respectfully request you to preserve the effectiveness of the existing state-based alcohol regulatory system — and support the constitutional principles that protect the marketplace against discriminatory and anti-competitive state laws — by rejecting H.R. 5034.

“The current system of alcohol beverage regulation in the U.S. provides a proven and effective balance between states and the federal government that allows for local flexibility while providing necessary consistency and fairness on a national basis. This allows producers, distributors and retailers to conduct business in an efficient and effective manner that best serves the interests of the American public.

“The National Beer Wholesalers Association (NBWA) and the Wine & Spirits Wholesalers of America (WSWA) seek to dramatically alter the current system of alcohol regulation. With H.R. 5034, NBWA and WSWA want to put brewers, wineries, distillers and retailers at a competitive disadvantage; allow states to unfairly and arbitrarily enact protectionist laws against out-of-state beer, wine and spirits producers; and effectively eliminate federal oversight of alcohol. Specifically, H.R. 5034 would allow states to pass laws that violate the dormant Commerce Clause, federal antitrust laws and any other Act of Congress.

“We fully support existing state alcohol regulatory systems and believe they provide an effective and efficient balance of control that serves the interests of consumers, producers and the marketplace as a whole. We strongly oppose H.R. 5034 and respectfully ask that you refrain from supporting this unnecessary legislation.”

Public Opposition

Since April 20, wine lovers have sent more than 35,000 letters through www.freethegrapes.org to Congress in opposition to HR 5034. For more information on Free the Grapes’ response to HR 5034, visit http://www.freethegrapes.org/index.php?q=content/media_updates.

You can contact your Representative directly and voice your opinion here.