Distributors Push Bill In U.S. House To Block Interstate Sales

Source: OpenSecrets.Org

There is currently a bill in the U.S. House of Representatives that would give states more authority to regulate alcohol, which in turn would block interstate sales of beer and wine.

“The Comprehensive Alcohol Regulatory Effectiveness Act of 2010 would declare it congressional policy that states have primary authority to regulate alcohol. The legislation, filed in April, has 125 co-sponsors in the House, though no companion bill has been filed in the Senate.” — Carrie Levine, The National Law Journal.

Naturally, putting such a squeeze on the open market would limit competition, raise prices, and economically impair small vintners and brewers.

The National Beer Wholesalers Association is lobbying heavily in favor of the bill and has already contributed to the coffers of bill cosponsors. The NBWA claims they’re only trying to ensure states have better control in defending their alcohol laws, but bill critics claim that the NBWA is only trying to limit competition. Jonathan Yarowsky, lobbyist for the Beer Institute, states that brewers believe the bill “would lead to a protectionist and anti-competitive system that would hurt consumers.”

The beer industry isn’t the only one up in arms about this bill. Reps. Mike Thompson (D-St. Helena) and George Radanovich (R-Mariposa), who head the Congressional Wine Caucus, wrote to their colleagues that the House bill would “devastate California’s and other states’ wine industries, stunt economic growth and harm consumers by allowing discriminatory law and regulation to be passed and go unchallenged.”

Small wineries are especially susceptible to this legislation, which could potentially take away their ability to offer wine clubs and other direct-to-consumer services. These channels allow them to service their patrons better than they might be able to through the traditional distribution system.

Backers of the bill have thrown out the typical arguments about how direct sales pose a threat to public health and also make it easier for children to gain access to alcohol — the same basic arguments that seem to come up when it comes to the shipment of alcohol.

This bill also has liquor producers campaigning against passage. Some allege that states might alter definitions of certain spirits, such as Kentucky Bourbon, and even dilute some styles. They’re also concerned about states requiring particular labeling standards, and regulating how brands are allowed to advertise.

The bill is still in committee.

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