Wednesday, June 23, 2010

Big Business and Our Government

There is currently legislation pending (House Resolution 5034) which, on the surface doesn't appear as anything menacing.  But after being educated of the potential implications, you may disagree.  The bottom line is this: Wine wholesalers are trying to limit how you can obtain wine.

Over the past few years, legislation at the state level that limited what and how wines can be purchased from other states was overturned by the ruling of the 2005 Granholm v. Heald Supreme Court decision.  In a nutshell, states could not discriminate against wines being shipped in from other states.  This allowed the consumer to order wines directly from wineries in other states, and have that shipment delivered directly (by UPS or Fedex) to their house.  This was a win-win for both small boutique wineries and consumers.  The wineries could sell wines throughout the United States without paying additional fees to wholesalers or dealers, and consumers did not have to pay additional costs.

Wholesalers make money by purchasing from wineries at a low cost, and then adding their "commission" to the price.  Subsequently, they sell it to wine, liquor, and grocery stores.  Wholesalers unfortunately limit choices for consumers because they usually only purchase wines produced in large quantities, and that are most known by the buyer and therefore likely to sell quickly.  For the consumer, this means fewer higher-quality wines that are produced in limited production.

Currently, H.R. 5034 has been submitted to the House of Representatives (Federal level) by the National Beer Wholesalers Association (NBWA), with support from the Wine & Spirit Wholesalers Associations (WSWA).  This piece of legislation makes it so states do not have to worry about their laws discriminating against any other states' wine.  Thus while it doesn't affect shipping wine directly, it does allow the state to pass legislation limiting the import of wine into said state however it wishesTo translate:  Individual states could choose to only allow wine purchase through distributors.

This will really hurt those small boutique wineries, as while they may make great wine, the only people they can sell to will be whoever comes by the winery tasting room, or people in the same state.  Many of them will have to close their doors.  Online retailers will of course also be affected.  The only ones who benefit would be the wholesalers.
So, if you have ever ordered wine from a winery, purchased wine from an Internet retailer, used Wine.Woot, are a supporter of free enterprise, or wish to keep your local small wineries in business, you might want to consider contacting your Congressman and telling them to vote against H.R. 5034.  A good place to start would be to learn more by visiting STOP H.R. 5034.