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Stuck in the Middle by You
In a new report (PDF), the Specialty Wine Retailers Association (SWRA) notes that liquor wholesalers have been throwing money at state legislators in a largely successful effort to maintain their government-enforced monopolies on the distribution of alcoholic beverages. Those privileges were threatened by a 2005 Supreme Court decision overturning state laws that prohibited out-of-state vintners from shipping wine directly to consumers while allowing in-state wineries to do so. The Court found that such laws violated the Commerce Clause by erecting discriminatory trade barriers. Since then the wholesalers have been urging state legislatures to comply with the ruling not by opening up their markets but by imposing uniform bans on direct shipping. According to the SWRA (whose members want the freedom to buy directly from wineries), those lobbying efforts have been accompanied by a total of $50 million in donations to state political campaigns, an amount that "dwarfs that of any other sector of the American alcohol industry as well as numerous other groups." In Texas, for example, "alcohol wholesaler political contributions were greater than the political contributions of all gambling and casino interests, retail interests, food interests and all business services...combined." This generosity, says the SWRA, "coincides with the enactment of alcohol wholesaler-supported policies in nearly every state that protect the wholesaler." Examples:
• Between 2000 and 2006 Illinois alcohol wholesalers contributed $5,731,776 to political campaigns. In 2007 the Illinois Legislature passed a law that protected in-state alcohol wholesalers by prohibiting Illinois consumers from continuing to buy wine from out-of-state retailers. Wholesalers also convinced the Illinois legislature to force large Illinois wineries to sell only to state wholesalers, rather than direct to retailers has they had been able to do.
• Between 2000 and 2006 Texas alcohol wholesalers contributed $6,976,104 to state political campaigns. The Texas Legislature has passed prohibitions on out-of-state retailers shipping to Texans and limitations on in-state retailers shipping to Texans, both moves protective of and supported by state alcohol wholesalers.
• Between 2000 and 2006 California alcohol wholesalers contributed $4,296,304 to state political campaigns. In 2005 California passed legislation protecting wholesalers from competition by prohibiting Californians from purchasing wine from out-of-state retailers, policy California wholesalers pushed for.
• Between 2000 and 2006 Michigan wine wholesalers contributed $2,099,319 to state political campaigns. In 2005 the Michigan legislature passed a wholesaler-supported law that protected in-state wholesalers from competition by prohibiting Michigan consumers from purchasing wine from out-of-state retailers.
• Between 2000 and 2006 Virginia alcohol wholesalers contributed $2,580,161 to state political campaigns. The Virginia General Assembly passed a wholesaler-supported law prohibiting Virginia wineries from continuing to sell wine directly to retailers and forcing them to sell their wine to wholesalers.
[Thanks to The Wine Commonsewer for the tip.]
|1.10.08 @ 1:49PM|#
But it's for the children! We all know that Skippy would rather order a $30 merlot by mail from California than give his 21 yr. old brother $15 to buy a case of beer. And all Skippy's friends would rather savor the nose of violets and leather than pound down another 12oz of Coors Lite.
Episiarch|1.10.08 @ 1:53PM|#
Many parents receive boxes marked "WINE" from FedEx and then hand it over to their teenage children without asking questions.
|1.10.08 @ 1:53PM|#
I knew Michigan would get mentioned. Wholesale alcolic beverage distribution here is an annual scandal. It never gets fixed. The folks in Lansing would commit Seppaku over this if they had any shame.
kinnath|1.10.08 @ 1:55PM|#
This is, no doubt, the darker side of federalism.
Not really. This is the dark side of government regulated
distribution channels.
Russ 2000|1.10.08 @ 2:00PM|#
This is, no doubt, the darker side of federalism.
It's basically the opposite. State alcohol control was a compromise
to end Prohibition.
Wicks Cherrycoke|1.10.08 @ 2:00PM|#
I have actually seen the distributor lobby at work here in NJ. They have been selling this to law enforcement agencies by claiming that state laws requiring liquor sales through wholesalers prevents underage drinking. But in NJ, the wholesalers have added to their proposed law a provision granting additional money for -- you guessed it -- local law enforcement agencies to "enforce" the law. And just guess how local law enforcement agencies have responded.
|1.10.08 @ 2:01PM|#
Not really. This is the dark side of government regulated
distribution channels.
Go here for evidence.
|1.10.08 @ 2:01PM|#
I can't get Bell's beer in Chicago anymore because of these motherf*ckers, or more precisely, because Larry Bell is a businessman with integrity.
Rod Sterling|1.10.08 @ 2:03PM|#
Imagine if you will, a world where you could only buy a desktop computer from a state-licensed retails stored which was requied to buy the computer from a state-licensed wholesaler. Imagine committing a crime for ordering a Dell online had having it shipped across state lines.
T|1.10.08 @ 2:11PM|#
The Texas part is no surprise. The wholesalers have a lock on
the Lege. It has some interesting effects on the retail end, as
well.
But then again, the Texas Alcoholic Beverage Comission once sent
agents into bars to arrest people for being drunk in public. Inside
bars. They only backed down after the resulting public outcry
included statements like "Die in a fire."
Russ 2000|1.10.08 @ 2:18PM|#
I can't get Bell's beer in Chicago anymore because of these
motherf*ckers, or more precisely, because Larry Bell is a
businessman with integrity.
Eric, have you seen his Kalamazoo brand on the shelves lately? I
haven't, though I haven't looked very hard.
Bryan|1.10.08 @ 2:21PM|#
But McCain/Feingold and all CFR should be repealed because we would never see such blatent purchasing of governmental power at the federal level.
|1.10.08 @ 2:27PM|#
But this is, by standard libertarian dogma, free speech. Imagine a world where political contributions were illegal. Sen. McCain, the Washington Post, the New York Times wish we were there. I guess we have to agree with Herbert Hoover: "The trouble with capitalism is capitalists. They're too goddamn greedy."
|1.10.08 @ 2:31PM|#
Imagine a world where political contributions were illegal.
Sen. McCain, the Washington Post, the New York Times wish we were
there.
Oooh yes. MSM orgasms whenever McCain Feingold is mentioned. I'd
wonder why except I'm smarter than a speeding locomotive. Or
something.
squarooticus|1.10.08 @ 2:33PM|#
But this is, by standard libertarian dogma, free
speech.
Exactly the reason why small government is an untenable fantasy:
the money will find its way to the people in power, whether it's
against the law or not, as long as those people have the power to
distort markets. But very few people seem to "get" this.
Kolohe|1.10.08 @ 2:36PM|#
Many parents receive boxes marked "WINE"
Ah, 'wee-NAY'! It must be Italian!
kinnath|1.10.08 @ 2:36PM|#
But this is, by standard libertarian dogma, free speech.
Imagine a world where political contributions were
illegal.
I'll type slowly for you Alan, so you can catch all the
words.
Political Contributions are not the problems.
Government Regulations that provide competitive advantage (nearing
monopoly advantage) for one set of business interests over another
are the problem.
Political Contributions intended to sway the development of
Government Regulations border on graft. That is a major
problem.
|1.10.08 @ 2:46PM|#
It is a little bit disingenious of Reason to whine about the campaign contributions of the wholesalers. It is a free country and they are free to give political contributions just like everyone else. Yes, this is terrible law. Yes it is nothing but a payout to a special interest group. But, the mere fact that the wholesalers are exercising their 1st Amendment Rights by throwing their cash around is not relevent. What is relevent is how stupid and ludacris these laws are.
The Wine Commonsewer|1.10.08 @ 2:49PM|#
You have to get the timing down so that Fed-Ex delivers the
expensive wine just as the box wine runs out. Tricky, but worth
while.
Jacob, thanks for the shout out.
The Wine Commonsewer|1.10.08 @ 2:54PM|#
John, I think it's more like an illustration of the Money
Talks, Bullshit Walks political principle. I don't think
Reason takes a position that campaign contributions per se are
evil.
Since then the wholesalers have been urging state legislatures
to comply with the ruling not by opening up their markets but by
imposing uniform bans on direct shipping
All hail the God of Equality. There were many, including some at
Reason, who predicted that this would be the result of the Supreme
Court ruling.
|1.10.08 @ 3:02PM|#
"All hail the God of Equality. There were many, including some
at Reason, who predicted that this would be the result of the
Supreme Court ruling."
I thought so to. The problem is that I am not sure how that is
illegal under the commerce clause. I am not sure how the Supreme
Court could have gone any farther than it did. The sollution is for
Congress to occupy the field of internstate sales and ban this kind
of garbabe. But, I am not sure they can do that under the 21st? or
whatever amendment it was repealed prohibition. It just sucks.
Russ 2000|1.10.08 @ 3:18PM|#
John, technically nobody is completely shut out of the markets, therefore there's no violation of the Commerce Clause. The 21st amedment allows interstate regulation at the state level, so most states regulate as far as they can get away with because there's money in that thar regulatin'.
|1.10.08 @ 3:27PM|#
so most states regulate as far as they can get away with because
there's money in that thar regulatin'
Absolutely. Even absent the 21st Amendment, I don't see how this is
any different than laws that prohibit the direct sales of cars or
require a real estate license. As long as you don't discriminate
against out of staters you are good to go. State regulation of
commerce and the amount of money leeched from the economy by people
like Real Estate Agents, Car Dealers, funeral homes and liquer
distributers is one of the least reported and most outragous bits
of corruption in the country.
|1.10.08 @ 3:36PM|#
FYI: You can still get wined shipped to you in Texas. (I had
some delivered before Christmas). The law forbidding it is
currently under injunction.
I have no idea as to the merits of the case.
Obbop|1.10.08 @ 6:25PM|#
The elite's government FEARS you!!!!!!
Their fear is manifested in the laws they pass. Here is a law
banning what MANY of the Founders wrote is a RIGHT of citizens when
a government no longer represents them:
Section 2385. Advocating overthrow of Government
Whoever knowingly or willfully advocates, abets, advises, or
teaches the duty, necessity, desirability, or propriety of
overthrowing or destroying the government of the United States
or
the government of any State, Territory, District or
Possession
thereof, or the government of any political subdivision therein,
by
force or violence, or by the assassination of any officer of
any
such government; or
Whoever, with intent to cause the overthrow or destruction of
any
such government, prints, publishes, edits, issues,
circulates,
sells, distributes, or publicly displays any written or
printed
matter advocating, advising, or teaching the duty, necessity,
desirability, or propriety of overthrowing or destroying any
government in the United States by force or violence, or
attempts
to do so; or
Whoever organizes or helps or attempts to organize any
society,
group, or assembly of persons who teach, advocate, or encourage
the
overthrow or destruction of any such government by force or
violence; or becomes or is a member of, or affiliates with,
any
such society, group, or assembly of persons, knowing the
purposes
thereof -
Shall be fined under this title or imprisoned not more than
twenty years, or both, and shall be ineligible for employment
by
the United States or any department or agency thereof, for the
five
years next following his conviction.
If two or more persons conspire to commit any offense named
in
this section, each shall be fined under this title or
imprisoned
not more than twenty years, or both, and shall be ineligible
for
employment by the United States or any department or agency
thereof, for the five years next following his conviction.
As used in this section, the terms ''organizes'' and
''organize'', with respect to any society, group, or assembly
of
persons, include the recruiting of new members, the forming of
new
units, and the regrouping or expansion of existing clubs,
classes,
and other units of such society, group, or assembly of
persons.
The federal government is allowing MILLIONS of illegals to invade
our country who are causing immense economic harm to America's
working poor. Corporate America is becoming increasingly more
powerful and influential. Yet, according to the government of for
and by the elites YOU, a citizen, have to accept whatever the
government does with NO recourse other than voting...... and there
is sufficient proof that shows to me voting is worthless since the
entrenched power structure ensures that the emplaced elite class
can not be removed.
Several Founders specifically wrote of the people's right to
abolish a government when it no longer represents them.
We are forced to live under an elite's TYRANNY!!!!!!!!!!!!!!!
Tom Wark|1.10.08 @ 7:05PM|#
"John, technically nobody is completely shut out of the markets,
therefore there's no violation of the Commerce Clause. The 21st
amedment allows interstate regulation at the state level, so most
states regulate as far as they can get away with because there's
money in that thar regulatin'."
The issue is that the commerce clause and many of the actions take
under the broad grant of the second paragraph of the 21st amendment
come into conflict.
The Supreme court stated quite clearly that a state may regulate
the sales and distribution of alcohol nearly any way it wants...so
long as it treats in-state and out-of-state entities equally. That
means if in-state wineries can ship to citizens, then out-of-state
must also be able to. If in-state wine stores can ship to their
neighbors in the state, then out-of-state wine stores must be able
to also.
The problem for consumers is that the enormous influence purchased
by state alcohol wholesalers-to the tune of $50 Million over six
years-has resulted in state lawmakers claiming, "The supreme court
decision ONLY applied to wineries...not to retailers...we can ban
out of state retailers and still let our in state retailers
ship.
That's a bit like saying Brown V. Board of Education applied to
little African-American Girls, but you can still discriminate
against Hispanics. That's the kind of crazy interpretations many
lawmakers are willing to buy into in exchange for their annual
infusions of cash from alcohol wholesalers.
Tom Wark
Executive Director
Specialty Wine Retailers Association
WoohooILoveYouGuys|1.10.08 @ 8:03PM|#
You people all rock and roll! I really enjoyed reading the
thread. Kudos to the Libertarians among you. I can't believe how
FARKED up this country is with what really is corruption.
JLRW
|1.10.08 @ 9:13PM|#
add this to the list...
http://www.akronnewsnow.com/blogs/NickOnWine/itemdetail.asp?ID=6022
"The State of Ohio has botched the wine laws again! Beginning
October 1st, it will be no longer be legal for Ohioans to purchase
wine shipped in from out of state from any winery producing more
than 150,000 gallons a year or approximately 63,000 cases. That
eliminated at least 100 California wineries from direct shipping to
consumers in Ohio. "
|1.10.08 @ 9:16PM|#
Tom Wark
Executive Director
Specialty Wine Retailers Association
go fark yourself
Obbop|1.10.08 @ 10:13PM|#
Tom Wark
Executive Director
Specialty Wine Retailers Association
Now THERE'S an unbiased opinion source!!!!
|1.10.08 @ 10:59PM|#
"Tom Wark
Executive Director
Specialty Wine Retailers Association
Now THERE'S an unbiased opinion source!!!!"
It's unlikely anyone will confuse me with being unbiased, so well
done in recognizing that.
However, if by pointing out my stake in this matter you want to
suggest that my analysis of the Granholm decision and the impact of
campaign contributions on alcohol policy is off mark then it might
be interesting to see how you actually come to that conclusion. I'm
always willing to listen, read and discuss with good
intentions.
So, have at it. But if all you've got is a mind to point out that I
have irons in the fire, I really think that should have gone
without saying.
I look forward to your breakdown of my analysis.
Tom Wark
Specialty Wine Retailers Association
TrappedEastOfTheBigMuddy|1.10.08 @ 11:13PM|#
But then again, the Texas Alcoholic Beverage Comission once sent agents into bars to arrest people for being drunk in public. Inside bars. They only backed down after the resulting public outcry included statements like "Die in a fire."
Ahhh. The understated approach. One of the things I really
appreciate about that state.
I can't tell you what a hellhole I thought Texas was, growing up
there. Then I moved to California, and later Virginia and Alabama.
All those places are even worse is one way or another. Alabama may
be worse in every way.
New Mexico is mostly better. I'd like to get back there,
someday.
The Wine Commonsewer|1.11.08 @ 1:27AM|#
I have no idea as to the merits of the case.
The merits of the case are simple. If you can order wine online and
have it shipped to you without John Law getting his panties in a
bunch, then you are right on. If not, then we have what is called
an interference in the market by government.
The Wine Commonsewer|1.11.08 @ 1:34AM|#
farker and obbop, WTF is wrong with you?
Do you believe in free markets or are you just chota heads?
|1.11.08 @ 3:13AM|#
I guess I am more fortunate than the usual alcoholic. I don't have to worry about which vintner is cheating who. For years I have simply stolen booze when I was thirsty. From the local supermarket, the package store, and even from my senile neighbor, who always leaves her back door unlocked. I walk into her house, take what I want and then leave. She is a great neighbor.
|1.11.08 @ 8:22AM|#
sorry, not much sympathy from me here. I'm from Alberta Canada,
where the wine stores were recently privatized. Guess who controls
the distribution and variety of products? The Government. Can you
special order? Yes. Is there any guarantee you can get it in
Canada? No. Will you be taxed out the wazoo?
Most definitely ! We have 1, count 'em, 1 distributor for the
entire province, which leads to shortages of product on shelves .
How much money does the province make from booze? At least a
billion dollars. How about beer in supermarkets/quicky-marts? Where
do you think you are, the US? Next thing, you'll be asking for
buses that run past 10:30 pm
J B
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