As I write, wine lovers in our country are united on a single front that has nothing to do with what’s in their glasses, but rather, what might not be, if some beer and wine wholesalers get their way. A bill known as H.R. 5034 snuck onto the floor of Congress last month with bi-partisan support. If passed, laws would tighten state governments’ control over alcohol sales by allowing wholesalers to restrict interstate commerce. In simple terms? Consumers would no longer be able to purchase wine, beer, or spirits directly from any of the nation’s 6,700 wineries, breweries, or distilleries. In even simpler terms? Remember that Finger Lakes Riesling you fell in love with on your honeymoon? Well, say buh-bye to getting it delivered directly to your door.
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Tom Wark, head of the Specialty Wine Retailers Association, described H.R. 5034 as “the most onerous consumer wine law since the passage of the 18th Amendment and the onset of Prohibition.” But this isn’t the first alcohol-related bill since then.
In 2005, the Supreme Court case of Granholm v. Heald ruled that states cannot discriminate between in- and out-of-state wineries in matters of direct-to-consumer (DTC) wine shipping. The Granholm decision argued that the 21st Amendment, which ended Prohibition and put states in charge of alcohol regulation, does not trump the Constitution’s Commerce Clause, which prevents states from restricting interstate trade. Immediately following Granholm, 27 states allowed DTC wine sales. Today, 37 states, including Virginia, plus Washington, D.C., allow residents to order out-of-state wines—about 83 percent of the American wine-loving population.
So why, five years later, are we at risk of a complete reversal of this decision? Written by the National Beer Wholesalers Association and endorsed by the Wine and Spirits Wholesalers of America, H.R. 5034 argues that alcohol is unlike other consumer products and should not fall under the Commerce Clause. Opponents to DTC claim three main reasons: 1) to prevent frivolous lawsuits, 2) to keep tax dollars in-state, and 3) to save our youth from underage drinking and our alcoholics from debauchery. If you just spit your last swallow of direct order wine across the room, then you aren’t alone. Kind of ridiculous to think that minors are busy ordering Napa Cabs off the Internet and waiting a week for delivery. Drinkers will continue to drink whether H.R. 5034 passes or not. Minors will continue to use fake IDs or pay someone of age for a case of Bud from Kroger just as before. And alcoholics, with all due respect, might sooner drink a bottle of Listerine than wait around for a case of booze to be delivered to their doorsteps.
The nerve struck amongst the more than 21,000 American wine drinkers who have written letters to Congress is the threat to our freedom of choice as consumers. In a naked attempt to protect their own monopoly by insulating themselves from competition and preserving their place in the middle of the three-tier system, wholesalers would not only reduce our choices, but in turn, restrict commerce. Small wineries (including many of Virginia’s own) face insurmountable odds in building a distribution network. While wine production has increased 500 percent in 30 years, wine distribution has decreased by 50 percent. There are too few distributors to support the number of wines in existence, and as a result, many wineries depend on DTC and self-distribution to stay in business. And, because in the last 10 years or so, the distribution business has consolidated to the point where six wine and spirits distributors now control more than 50 percent of sales in the country, we witness, once again, big business rearing its giant head in an industry where bigger most definitely isn’t always better.
If you want to take action, visit www.freethegrapes.com for instructions on how to send a letter Congress.
