Last year, a rag-tag coalition introduced a piece of legislation that threatened wine shipments. It’s not even Halloween but the scary news is that, like Poltergeist II, this horror show is baaaaaack.
Now known officially as HR 1161, and unofficially as the Wholesaler Protection Act, the bill seeks to restrict legal challenges to the interstate shipment of wine (and beer and spirits) and keep the legislation that affects wine shipping at the state level. The reason that’s scary is because the judiciary is the consumer’s best ally in the fight to liberalize wine shipments–with more options to purchase wines, many consumers will get lower prices and a better selection than what is available in their local markets. Legislators, desperate for (re)election, frequently accept donations from wholesalers who seek to prevent freeing up trade in wine. The Beer Wholesalers wrote the legislation last time and the text is virtually identical this time.
The Wine and Spirits Wholesalers Association recognizes the threat Read more…
Will this stiff drink, now on the table in Harrisburg, lead to the end of the PLCB? The state-run system that bestows such snappy names on its wine stores as #5801 is in a rough patch. As seen in the picture at right (and the accompanying Times story details), the opening hours of this store are limited and the prices, selection and knowledge of the staff may not be all that great either at some state-owned stores. The new kiosks have bombed. Consumer dissatisfaction may be growing as is chatter about privatization. Even though previous governors have floated the idea only to meet with failure, the stars seem to be aligning for reform. While this is something most Pennsylvania wine consumer would likely raise a glass of hard-to-find wine to, the logic that will carry the day for public officials is about money. Read more…
The August 30 issue of the New Yorker contains a much-discussed profile of the Koch brothers, the billionaires bankrolling the Tea Party and libertarian organizations. But who wants a Tea Party when a Wine Party would be much more fun?
The words “billionaire” and “Koch” are familiar to ardent wine enthusiasts; the book The Billionaire’s Vinegar depicts William Koch, industrialist and disgruntled wine collector, as a lawsuit-wielding sheriff bent on ridding the fine wine world of counterfeits. However, the brothers in the New Yorker story are actually Charles and David who still control Koch Industries; after acrimony came to a head in the family company, they bought out William (and his brother Freddie) in 1983. Litigation simmered among the brothers for the following seventeen years.
Taking a page from his brothers’ playbook, what if Bill were to fund a Wine Party, bent on liberalizing the country’s wine shipping laws? He has already burnished (or tarnished, depending on your perspective) his reputation with high-end collectors. But restrictive interstate shipping laws plague wine enthusiasts in many states. Although there has been a greater liberalization of shipping laws from wineries to consumers in the past five years, laws governing wine retailers-to-consumers remain much more restrictive with only about a dozen allowing the practice. This stifles innovation in wine retail and reduces selections to broad swathes of consumers, while keeping prices high in many markets. Judicial challenges remain the key weapon in this fight and Bill Koch has much experience in litigation.
Further, wholesalers of beer, wine and spirits have initiated a legislative campaign to freeze wine shipping laws as they are. While this effort seems be going nowhere, they will doubtlessly return in the next legislative session and probably be better prepared. Thus having financial largesse on the pro-shipping side would make this a more formidable fight in the legislative arena, where, all too often, money counts for more than votes. But citizen unrest can be fomented with some Champagne bottles sabered as effigies of unblocking the system. Above all, the wine party would not just have to be against interstate shipping laws but could be for many things, such as discussion, eating (come on, who is anti-eating), and, of course, truth!
Bill Koch has already written himself into the story of fine and rare wine in America. By diverting a portion of his wine funds to this more populist approach, he could earn the adoration of Joe Wine Sixpack.
Have you ever met someone and talked with her about a topic, only to find out that–unknown to you–she is a key player in that very topic ? That happened to me about a week ago.
I gave the keynote talk to 250 attendees at the annual dinner of the Boston Patent Lawyers Association. The organizers wanted to tie it into my book, Wine Politics: How Governments, Environmentalists, Mobsters and Critics Influence the Wines We Drink. So for dinner I selected wines that tied in with the first three items in the subtitle and then used those wines to tell stories about the material in the book. (They were the William Fevre, Montmains, Premier Cru Chablis 2007; Domaine Huet, Le Mont, Vouvray (sec) 2007; and Ridge Geyserville 2007.) In the talking about the politics of American wine, I discussed many of the legal tussles, particularly around the issue of direct shipping.
It turns out that the patent lawyers were honoring Judge Rya Zobel of the U.S. District Court that evening. Born in 1931 in Germany, Judge Zobel was vibrant and lively and delivered funny remarks from the podium. Only at the dinner table did I learn that it was Judge Zobel who decided the case Family Winemakers of California v. Jenkins. In that case, she ruled that a Massachusetts law that essentially prohibited “large” wineries (over 30,000 gallons production) from selling directly to consumers was unconstitutional since it effectively barred 98% of out-of-state wine while allowing 100% of in-state wine from being sold directly. In January, that decision was upheld on appeal at the Circuit court; the decision will not be appealed to the Supreme Court.
I opened my remarks by raising my glass on behalf of wine lovers to Judge Zobel!
On April 15, a motley coalition of first-year and retiring members of Congress from both parties introduced a bill. The proposed legislation would restrict legal challenges to the interstate shipment of wine. Tom Wark, head of the Specialty Wine Retailers Association, described it as “the most onerous consumer wine law since the passage of the 18th Amendment and the onset of Prohibition.” Wine Spectator obtained a copy of a draft bill written by the National Beer Wholesalers’ Association and compared it to H.R. 5034 and deemed them “largely identical.” (See the bill’s text here.)
Of course, bills get introduced all the time as fobs to political contributors and then they don’t make it very far down the arduous path to becoming law.
We have devised a threat-meter for this particular bill. Normally a bill like this would have zero chance in becoming law before the 111th Congress adjourns. But right now we are one notch above zero (neck level) with a “high shoulder” rating. Why? A few reasons that all boil down to the deep pockets and skill of those behind the legislation.
One worrisome aspect is that in order for the bill to become law, it must get voted out of committee. The bill has been assigned to the House Judiciary committee, chaired by John Conyers from Michigan. Tom Wark has described Michigan as one state whose elected officials are “completely controlled” by wholesalers through their campaign contributions. (Michigan was the losing plaintiff in Granholm v. Heald, the 2005 case that liberalized wine shipments.) Indeed, the National Beer Wholesalers Association was one of the top 5 donors to John Conyers for the past two election cycles.
Hopefully, legislators will see this as the gross overreach that it is on the part of distributors. It would be great if reaction from wine enthusiasts turned the initiative in to the wholesalers’ last stand, legislatively. But that is unlikely.
We will keep you posted here if the threat level changes. You can also join the Facebook group Stop HR5034 (over 1,500 members already) for updates. And in case this bill does go anywhere, hit the comments with your thoughts about who we can send a huge amount of corks to–or other possible steps to effectively make our voices heard.
RH.R.5034 – Comprehensive Alcohol Regulatory Effectiveness (CARE) Act of 2010. Sponsors are Rep. Bill Delehunt (D) MA; Rep. Howard Coble (R) NC; Rep. Mike Quigley (D) IL; Rep. Jason Chaffetz (R) UT
Over on HuffPo, there’s a piece up about the Red Bicyclette/faux pinot saga. Jacqueline Friedrich, author of the guide The Wines of France, posted this comment as a reply. As it touches on some issues that astute readers will remember from Wine Politics, I reproduce her comment here with permission:
1) As a previous post-er said, rightly, Pinot Noir is a grape. It is not an appellation. Read more…
Friday was a rare moment in the legislative sun for the subject of wine direct shipping in the Maryland, where, as we discussed, is a felony to ship wine. Consumers and wine industry experts gave testimony before a committee. Tom Wark, executive director of the Specialty Wine Retailers’ Association, who was there writes via email: “Huge turnout in favor of shipping. Largest contingent of consumers I’ve ever seen at such a hearing. Yet, there is pessimism. The chair said what we all knew…that it was unlikely to pass. Distributor opposition, the “minors” red herring and fear of job losses.”
On Friday afternoon, Adam Borden resigned as executive director of the pro-reform group. The Baltimore Sun reported that he had lobbied aggressively for the cause–even calling a delegate’s mother–and ruffled some feathers. They quote him as saying he was resigning because he didn’t want his style to hurt the cause. His resignation letter is reproduced here in full after the jump.
Some key contacts:
Marylanders for Better Wine and Beer Laws and their page On Facebook
Delegate Dereck E. Davis, Chair, Economic Matters Committee
Senator Joan Carter Conway, Chair, Education, Health and Environmental Affairs Committee
House Bill (80/141); Senate Bill (26/47) Read more…
Maryland, the home of the Fightin’ Terps, threatens to turn its wine lovers into perps: The laws governing these five and a half million residents make it a felony to order wine online and have it shipped to their homes. To purchase wines, consumers residing Annapolis, Baltimore or along the Chesapeake must buy from a local store; comparison shopping through retailers on the internet or ordering directly from a winery is illegal. (Small wonder neighboring DC is the thirstiest non-state in the nation.)
Maryland is also home to 38 wineries today. Seeking to jump-start the domestic wine industry after Prohibition, the US Department of Agriculture turned to this mid-Atlantic state, opening an experimental winery in Beltsville, Maryland. Even though it was not long-lived, today’s wineries follow the early trail blazed by the Feds. The only problem: they cannot ship their wines to consumers in-state or out-of-state. In a recent survey (pdf), all but one winery respondents found this to negatively affect their business.
The keys to reforming the laws that have kept Marylanders locked out of the wine cellar for several decades may be within reach. Although the legislation has been introduced every year since 1981, Adam Borden, executive director of Marylanders for Better Beer and Wine Laws, says that this year it has majority support in both houses.
But the legislative path is not without roadblocks. Who has screwcaps big enough to stand in the path of this legislation? Senator Joan Carter Conway, chair of the Health and Education committee, threatened to stifle the bill in committee despite six of nine members being co-sponsors. But today, a committee in the House will hear testimony on the issue.
Robert Parker, Maryland’s best-known wine consumer, will not be testifying today since he is traveling, according to Borden.