Alcohol

Wine Snobs and Suds Swillers Unite!

Legislation oozing its way up the Hill threatens open markets in beer, wine, and liquor.

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The life of a wine snob is a hard one. Every bottle holds peril and promise—the thrill of a buttery finish, the agony of harsh tannins. But life may get harder still, thanks to a new bill to restrict the direct sale of alcoholic beverages to consumers. Even those of us who count ourselves among the Yellowtail-swilling and Bud-drinking masses will face higher prices and a more limited selection of wine, beer, and liquor.

Ever since the Supreme Court's 2005 Granholm v. Heald decision, which opened up sales by prohibiting states from treating out-of-state sellers differently than in-state, wine distributors have been cautiously expanding outside of traditional wholesale monopolies. Naturally, the post-Granholm years have been an anxious time for the nation's beer, wine, and liquor wholesalers. Since the repeal of Prohibition, dozens of states have required booze buyers and sellers to go through a middleman. Those middlemen keep prices high, restrict time and place of sale, and place the whole industry under tight government supervision. In 19 states, that middleman is an official state agency; in many other states, a few powerful state-backed players dominate the market. All that threatened to change when, in the wake of Granholm, states chose, by and large, to open up the direct sales option to everyone rather than cripple their own industries.

But beer and liquor wholesalers realized this liberalization wasn't likely to stop with the grape. Rather than doing the sensible thing—seeking solace at the bottom of a bottle—they decided to soothe those nerves by opening their wallets instead. Members of the National Beer Wholesalers Association and the Wine and Spirits Wholesalers of America have poured $11.55 million down on various federal campaigns over the last four years—an increase of 33 percent over the previous four years, according to the folks at Wine Spectator.

So far, that cash has bought the imperiled wholesalers over 100 co-sponsors on an presumptuous new bill which would protect their monopolies at the expense of some pretty fundamental constitutional principles. The bill is called—I am not making this up—the CARE Act. Also known as the Comprehensive Alcohol Regulatory Effectiveness Act (H.R. 5034), the legislation was introduced in April by Rep. William Delahunt (D-Mass.)

The bill has the impudence of a young beaujolais from a bad year. The legislation would privilege the 21st Amendment, which repealed Prohibition and left regulation of alcohol to the states, over the Constitution's Commerce Clause, which prohibits states from favoring in-state entities in trade. The bill would exempt state booze laws from federal limits—stuff like anti-trust rules and Food and Drug Administration requirements. It would allow states to replace uniform federal standards with their own competing standards for labeling and formulation, making it harder for out-of-state producers to comply with state laws. It would also take away recourse to the courts for sellers or buyers harmed by the new legislation. At present, the burden of proof is on the state to show that it needs to discriminate against outside competitors for a legitimate purpose, such as the health or safety of its citizens. This would be reversed, requiring anyone who wanted to challenge a state alcohol law to first prove that the law has no legitimate purpose beyond protectionism, a nearly impossible task.

The bill's advocates are leaving no rhetorical stone unturned: In June, the Wine and Spirits Wholesalers of America urged their members to write to Congress and explain why HR 5034 is a vital jobs bill. Elsewhere, the bill's supporters have argued that the protectionist legislation is necessary to prevent U.K.-style binge drinking and vomiting in the streets.

It's unlikely that this session of Congress will see significant forward motion on the legislation, but this isn't the sort of bill that goes away. The bill's primary opponent, Rep. Mike Thompson (D-Calif.), who represents California's wine-growing regions, breaks down the voting for Wine Spectator: "There's only a few of us who represent wine country, and there's only a couple who represent distilleries," explains Thompson, "but every member of Congress has two, three, four, five, maybe six distributors [in their district]." Back in April, I blogged about the surest sign that this bill—and the attendant wholesale monopoly protections—are here for the long haul: Warren Buffet recently purchased a Georgia wholesaler, Empire Distributors.

Only about 1 percent of wine sold nationally is direct to consumers. That may not sound like much, but according to a recent report from industry trade publication Wines & Vines, such business amounts to 9.1 million bottles sold last year in Napa alone. And the average price of one of those Napa bottles shipped directly to the consumer: $52.69. The passage of H.R. 5034 will translate to millions of suffering wine connoisseurs, weeping for their lost bottles, and tens of millions of ordinary drinkers stuck with more expensive booze and beer. For once, wine snobs and suds swillers alike have something to toast together: the defeat of this end-run around the Supreme Court's decision to open up alcohol markets to real competition.

Katherine Mangu-Ward is a senior editor at Reason magazine.

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107 responses to “Wine Snobs and Suds Swillers Unite!

  1. Is there a greater disconnect between a man’s public persona and his actual actions than Warren Buffet? The “Sage of Omaha” is now all about kissing the right government ass, and buying the of moats to protect his crappy, unsustainable businesses. He’s becoming a sort of Carlos Slim of the United States, a man incapable of making an honest buck.

    1. He’s been about kissing the right ass all along. He just had to get big enough to where the only ass left to kiss was government.

  2. This is an excellent reason to make your own booze.

    1. Beer and wine? Sure. Anything else? Not so much. I actually checked into the laws regarding making distilled spirits at home. It’s functionally impossible to do and remain in compliance with the law.

      1. Sad, but true. It is legal in New Zealand, however. And it’s probably do-able in Portugal, since there are a lot of companies there that make beautiful copper alembic stills.

        1. Thanks Mr. Penguin, now I have another expensive must have item. Those stills really are beautiful, though.

          1. Almost works of art. While I don’t usually go for the “handcrafted with loving care, blah, blah, blah” stuff, they are really something.

            1. There are much more practical pot stills out there that are all copper and quite nice looking.

              1. The first link in my 5:10 post contains a summary of various still types and the benefits and drawbacks of them.

      2. Hell, I make my own damn likker. And I’ve got a big old wide assed woman, the only kind I’d have. Her hole weighs 40 pounds. That’s my grave marker laying there, it says Popcorn says fuck you.

  3. Argh. Between the corporatists and the statists, it’s wonder there’s anything resembling a free market in anything.

    1. Well, there’s always the black market.

      1. Black markets are nice and tax and coerce free, but harshly inflated pricing due to the risks taken by the sellers.

        1. That’s why black market customers crave runaway inflation.

          1. Black market consumers would only benefit from run away inflation for a short but sweet time frame.

      2. Racist!

  4. I will NOT unite with wine snobs…

    1. What about beer snobs, like me? Or pizza snobs, like me? Or pizza idiots, like ProL?

      1. You’re a pizza doofus, doofus.

        1. You’re a pizza doody-head, doody-head!

          I’m feeling very immature today, because I’m transcribing the math of a custom statistical regression into C# and it’s making my head hurt.

          1. That’ll do it.

            Though I must confess surprise to hear that you aren’t working in machine language. I always figured you thought in binary.

            1. My thought processes are beyond your comprehension, which is obvious seeing as you can’t comprehend the awfulness of deep dish pizza.

              1. If by “beyond” you mean “beneath”, then I agree.

                I bet you’re enjoying a nice deep dish pizza right now, you lying bastard!

                1. Uh, no, I had a tuna sandwich. Made with Genova tuna, of course, because I am also a tuna snob.

                  1. Oh, right, I forgot about that. I meant to try some. I wonder if Fresh Market would have it? There was a nice Italian grocery nearby, but it failed like so many places have these days.

                    1. I have found that it is completely random which grocery stores will have it. Here in Seattle, only QFC carries it, while the more upscale Metropolitan Market does not, nor does Whole Foods or the Asian grocery stores.

                      Check them all.

                    2. I’ll try to find some.

      2. You know, I bet outsider think Hit & Run commenters argue about gold, anarchy vs. minarchy, stuff like that. Not pizza.

        1. Outsiders. Or maybe I dramatically underestimate the number of people lurking at this blog? Maybe it is just one guy who isn’t?

          1. Two. Chad. And that other guy, whats-his-name.

            1. No, even Chad posts here.

            2. Lurker Kurt.

      3. A little Dragon’s Milk on your cereal today, Epi?

    2. How about mead snobs?

      1. Mead? I guess, but no braggots!

        1. Cheers!

      2. There are even Coke snobs. Look at how a thread is guaranteed to get comments if the issue of Sugar vs. HFCS Coke is raised.

        1. ohh… that kind…

      3. Mead snobs need not apply. If you’re buying mead, you cannot be considered a mead snob. You MUST make your own. Therefore any BS sales rules are N/A.

        1. Real snobs make their own, no doubt 😉

          But since my fantasy retirement program involves getting filthy rich selling fine mead to the whole world, these BS rules do grab my attention.

  5. The bill is called?I am not making this up?the CARE Act.

    Does that make its opponants CARE Bears?

    1. Episiarch is on his way to give you a charlie horse for that.

      I’ve been saving my pennies to get started in homebrewing. Hope I can get going sooner than later.

      1. (gives sage a charlie horse for presuming to know when I will administer a charlie horse)

        1. Is that your super power? Seems kind of. . .lame.

          1. I’m like Batman, ProL. My only superpower is my vast intellect. Well, that and also the 80 bajillion dollars I inherited from my parents.

            1. The power of wealth!

            2. I used to think Kerry Killinger was the Batman. He was rich, and his brother is a professor in atmospheric laser physics.

              After the demise of Washington Mutual, I decided that I was in error.

              1. I could alternatively be like Lex Luthor. I do love a completely white suit.

                1. There’s no Lex but Gene.

                2. Speaking of white suits, if I could pick someone to be the 21st century version of, it would be Mark Twain. Without all of the personal tragedy and financial woes, of course.

        2. (boinks Epi’s sister – my only therapy for a charlie horse)

          1. Hey, you’re punishing yourself by doing that. My sister is nuts.

            1. You’re a beer snob, eh? Any brands you gravitate to?

              1. Don’t know about Epi, but I like German weissbiers, the rare moment I drink beer. K?nig Ludwig Weiss is decent.

              2. Dogfish Head, Sierra Nevada, Oscar Blues, stuff like that. I love me the IPAs; the hoppier the better.

                1. Me too, except Sierra’s. Their IPA sucked when I tried it; they may have improved but I’m sticking with their pale ale, which is reeeeally good.

                  1. Try their “Torpedo” IPA. Really good and hoppy. Their Celebration Ale, which is only available in the winter, is also quite good.

                    1. Oh I love the celebration stuff. I’ll give Torpedo a “shot.”

                    2. (charlie horse)

                    3. It wasn’t that bad.

                    4. Yes, do. It’s quite good.

                      The Harpoon IPA is excellent as well.

                      And, Magic Hat has temporarily revived Blind Faith. If you’re somewhere you can get it you should.

                2. I had my first He’Brew last night. Surprisingly good with a fair measure of hoppiness for a brown ale (the Genesis Ale,IIRC).

                  1. I do business with a Belgian guy (the Dutch-speaking variety), and he said that he secretly thinks the U.S. is the king of beer now, due to the explosion of microbreweries over the last twenty years.

                3. most of that dogfishhead stuff is completely undrinkable except for the continually hopped ipa. But it’s really expensive so it must be good.

            2. My new beer crush is with the Lagunitas Undercover Investigation Shutdown.

              Recently, Brickstore Pub and some Taco Mac locations added Lagunitas Undercover Investigation Shutdown Ale. Funny name right? Well, it’s not just a witty name to try to get you to buy. A few years ago Lagunitas Brewery used to have party every week featuring their beers, a band or two, and food. From the sounds of it, a quite good party. Well, the state of California brought out the beverage control board to investigate these parties over the course of 8 weeks. Rumor has it the “undercover officers” enjoyed the party as much as the others in attendance.

              In the end, the California Alcohol Control Board (ABC) sited Lagunitas Brewery for running a “Disorderly House,” an antiquated post prohibition law to crack down on bars being the front for prostitution /drug rings. I have also found reports that an individual was caught smoking marijuana on the premises. (He brought it from the outside according to reports.) So, on St. Patrick’s Day 2005, ABC came through with its threats. Under California law, the brewery could have been seized but received a 30 day shutdown order (later reduced to 20 days.) Apparently Lagunitas was going to be shutting down temporarily to installing new equipment, so it really didn’t affect operations.

              Undercover Shutdown is a strong ale, coming in at 9.0% ABV. It has a taste of a double IPA, but it honestly it doesn’t have the strong taste you expect. It’s a little hoppy, but not to an extreme that an average beer drinker would be turned off from. Shutdown Ale pours light brown/gold, and is slightly bitter at first. It has a mild hop flavor with a hint of grapefruit at the end. I have seen quite a few people try it, and the response has been quite positive.

              1. wow, that was really a wall o text. my bad.

      2. A $100 kit should get you started just fine. And don’t bother with the kits… Just buy “Designing Great Beer” by Ray Daniels and start making your own recipes!

  6. Thread jack:

    http://www.siouxcityjournal.co…..4a3a6.html

    Sheriff owned.

      1. Apparently broke the site. Anyhow, Judge Bennett is the man.

    1. I feel sorry for the poor sap who has to teach that Constitution class. Your typical community college student taking required courses is bad enough, but to have someone in there because of a court order is raising the bar considerably. I bet the sheriff blows off the class and then threatens the instructor to get a passing grade.

  7. (D-Mass.)

    My incredulity is too large to fit in this space.

    1. Delahunt is the guy that decided Amy Bishop killed her brother “on accident”.

      1. I heard she really turned her life around and got a PhD from Harvard.

  8. BTW, is that picture from the Huckabees’ after-party?

  9. God I hate people

  10. Caption Contest!

    “I know that prize in here somewhere!”

    1. If you try, you too can ruin a caption.

  11. The legislation would privilege the 21st Amendment, which repealed Prohibition and left regulation of alcohol to the states, over the Constitution’s Commerce Clause, which prohibits states from favoring in-state entities in trade.

    Stop right there, pal!

    You know the score: if you’re not constitutional text, you’re little law!

  12. Hahaha. Well, all of you who pity poor me for living in California are not laughing so much anymore. My state furnishes most of the worthwhile wine this country drinks, and I will be unaffected by these regulations within my state. I’ll just have to limit my craft beers to local California outfits like Sierra Nevada, Anchor Steam, Red Tail, etc.

    1. I do like me some Sierra Nevada. I’m not sure I’ve seen Anchor Steam in the Seattle area. Never tried Red Tail.

      There’s a brewery out of Portland called Full Sail that makes a tasty pale ale and IPA also.

      1. If my beer addled memory serves me correctly, Brouwer’s over in Ballard has it. And I’m pretty sure I picked up a six pack at the Haggen in Lake Stevens (or was it Mukilteo?) Try it, it’s excellent.

        1. Bouwer’s has a lot of good stuff. The food isn’t too bad either.

      2. Also, Full Sail is out of Hood River, Cretin!

    2. I don’t spend much on the stuff, but the best $12-15 California wines I’ve tried come not from Napa but from San Ynes, and I’ve done better still in central Texas.(*)

      As for craft beers, as I’ve had better brews from Illinois, Missouri, Kansas, and New Mexico then from California. The outfits you name don’t suck, but…

      ‘Course, few people the states are a patch on the Belgiums…unpasteurized dark ales strong as wine…damn.

      (*) A whole herd of little vineyards have open in south central Texas in the last decade. Some kind of “Things White People Like” effect, I guess. Anyway they are all cheap, and run the gamut from “What is this dreck?” up to surprisingly good. If you’re near New Braunfels look up the Rock Creek Winery.

      1. Agreed on the Santa Ynes Valley. Napa/Sonoma I think are a bit overrated. I generally like the California Central Coast wines better, so Santa Ynes up to Monterey, with a fair amount of my leisure/vacation time spent in Solvang and Paso Robles.

        As for beer, we have a number of good microbrews in the state, enough to satiate my thirst for bold beer without needing to pay extra for the imports of the Pacific NW or the heartland.

        In the meantime, I’ll have to see if I can find any Rock Creek at my local wineshop before this ridiculousness becomes binding law.

        1. Perhaps I spoke too strongly. I’ve only had a few “real” micro brews from California. I don’t spend much time in the sate these days. I have tried those macro-micro-brews, and they are truly not bad. I get to the bay area and Santa Barbara from time to time. Anywhere I should check out?

        2. Mendo and Sierra Foothills, as well as Santa Cruz Mountains. That’s where the interesting wines come from. Sorry.

      2. Damn straighten the Belgians. There is nothing better in my book than an unfiltered Triple or Golden. I do enjoy an appreciate many microbrews from the US, too.

  13. For sure, there are bad parts of this law, but I need to break this down because some of these things don’t seem so bad…

    “The legislation would privilege the 21st Amendment, which repealed Prohibition and left regulation of alcohol to the states, over the Constitution’s Commerce Clause, which prohibits states from favoring in-state entities in trade.”

    To me, states SHOULD be the ones managing the alcohol industries within them. The feds should step in ONLY when states act in a protectionist manner. (Which may be a lot in this case, but they should not be involved otherwise.)

    “The bill would exempt state booze laws from federal limits?stuff like anti-trust rules and Food and Drug Administration requirements.”

    Well, we certainly don’t want any companies colluding to block competition or raise prices, but keeping the FDA out sounds like an improvement.

    “It would allow states to replace uniform federal standards with their own competing standards for labeling and formulation, making it harder for out-of-state producers to comply with state laws.”

    Now, wait a minute. So wide-sweeping federal standards are good now? When did this happen? States SHOULD set their own standards. States with the least restrictions will naturally attract more trade and prosper. Next I suppose you’ll recommend federal education standards so students can more easily take classes in out-of-state schools.

    “It would also take away recourse to the courts for sellers or buyers harmed by the new legislation.”

    Since I’m not a lawyer, I don’t know enough to comment on this. But from where I’m standing (being a damn-near-capital-L-Libertarian) this seems more like a mixed bag than a pile of shit. (At least how it was explained in the article.)

    1. As things stand the States are in charge. The Supreme Court decision said (correctly) that they cannot favor in-state businesses over out-of-state businesses in the matter of mail-order and internet sales. That’s straight ahead Commerce Clause and should never have been in question. And under those (entirely proper) conditions most of the States have decided to prefer the consumer over the wholesales by letting people order wine by mail. This is an attempt to dodge that ruling by Federal fiat.

      And the whole business is desperately wrong-headed because an act of Congress can not change the meaning of the Constitution. The process for changing the Constitution is spelled out in the document.

    2. As an individual thats been working for a small winery in Sonoma I can tell you this bill is all bad. The Commerce clause is inexistence to lubricate the flow of commerce across state lines, I believe issues like this are what the founders intended it to be used for.

      “To me, states SHOULD be the ones managing the alcohol industries within them. The feds should step in ONLY when states act in a protectionist manner.”

      The states are already doing this, certain states like Georgia require lifetime exclusive rights when you sign with a wholesaler. Meaning they can and do promise you sales, make one purchase and never order again, leaving you all but locked out from reaching customers in those states. They do it so that their competitors can’t have your brands. I can only imagine what will happen if the bill becomes law.

  14. If I can no longer get my Vincent Arroyo of August Briggs wine I may just go postal. Those are some of the best wines in the whole world (and lord knows I am trying to taste as many as i can).

    I’m gunna take you to the looney bin! I’m goin’ to the brewery

  15. Lucky for me I live near the Tennessee state line. I can buy liquor and wine in Tennessee without paying Alabama sin taxes, then run it back across the state line. Rumor is you can buy booze online too and have it delivered.

    I can also commit the sin of gambling in Tennessee by buying lottery tickets.

    Alabama Christians hadn’t been able to catch me yet! Yee Haw!

  16. Oh wow, OK thot of sense dude.

    Lu
    http://www.web-anonymity.au.tc

    1. Things to add to my todo list:
      – Fix spell checker
      – Sync name and signature values
      – Write logic to compare author’s name and apply reference to “Dude” or “Babe” appropriately.

  17. I’ve seen a Reason article obliquely in favor of an application of the Interstate Commerce Clause – surely the End is Near.

  18. It could be worse. You could live in Pennsylvania and have to give a blow job to get a bottle of wine in a grocery store.

    http://www.pennlive.com/midsta…..nerie.html

  19. If any of you think that there is a free market in the beer, wine and booze industry, take another look at your state’s alcohol laws. What do you think the deal was, when Prohibition was repealed, to “free” up the markets? Not a chance. The deal was the Feds voted to repeal the 18th and wouldn’t stick their fingers in the ratification voting in exchange for large contributions from the folks who, by state law, were given geographical monopolies on sales and distribution, thereby keeping prices about 80% above “free market”. “Open market”; my word, what ignorance.

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  21. I live in Massachusetts and we are a backwater nation wrt the free market and alcohol. A state where you can get married if you’re gay, but you can’t friggin’ have a bottle of excellent Sonoma syrah shipped to your front door over the web. I’m fine with anyone marrying whomever they choose, and I’d like to be able to shop for wine online the same way I shop for shoes.

    1. You can’t even get it at the grocery store. Hell, they only just allowed Sunday sales statewide last decade.

  22. Delahunt? Isn’t he retiring? Ah, that’s a mighty fine job you have lined up afterward there Bill. Will you be a consultant or a direct hire for the state alcohol monopoly?

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