Practical Winery
65 Mitchell Blvd, San Rafael, CA 94903
phone: 415-453-9700 ext 102
email: Office@practicalwinery.com
1 · 2
NOVEMBER/DECEMBER 2010
FREE RUN
focused on non-producers – retailers, importers, and even small wholesalers. In fact, the bill represents the wholesalers’ attempt to stymie trends that could apply Granholm’s standards to retailers – eventually allowing direct shipping between wineries and retailers, cutting wholesalers out completely in some cases.
Retailers are currently fighting for such freedoms in federal courts — cases that HR 5034 could essentially bring to a halt. A ballot initiative in Washington State — advanced by the nation’s largest wine retailer, COSTCO — could break the entire government-mandated three-tier system in that state, which is another trend wholesalers want to contain.
In addition to curbing freedoms for retailers, the new draft could also bolster state laws that indirectly discriminate against wineries and other producers by allowing allegedly indirect, “unintentional” discriminatory effects.
Specifically, such provisions may validate state laws applying volume caps. For example, Massachusetts imposed caps that only allowed producers of 30,000 gallons or less of wine to ship direct. Yet all wineries in the state fell below that limit, applying shipping bans to out-of state wineries. A federal circuit court ruled that law unconstitutional in January 2010, but it is not clear how the courts will rule new draft language of HR 5034, and the issue is being debated in other states.
Wholesalers may offer other variations of similar underhanded policies that serve their special interests at the expense of other players. If they do not succeed, expect them to offer yet more legislation to continually chip away until they get what they want.
Prospects for passage
Prospects for the passage of HR 5034 appeared to be low before Delahunt offered his compromise proposal. Key House and Senate leaders — such as the House Speaker, and vineyard owner, Nancy Pelosi (D-Calif.) — were likely prevent a floor vote on a stand-alone bill. Yet leadership positions change, which may occur after the 2010 elections. Compromise language could also reduce opposition.
In any case, this bill could become law without ever gaining “stand-alone” consideration either in a lame duck session or in the next congress.
This one would more likely become law as an amendment to “must-pass legislation,” incorporated without much notice or as a trade-off among members. This risk is higher in the Senate, where lawmakers routinely offer controversial legislation as amendments, even legislation that was never considered in committee.
Not surprisingly, lawmakers in California are concerned about the potential passage of HR 5034. The California Assembly passed a joint resolution (SJR 34) — sponsored by Sen. Pat Wiggins (D-Santa Rosa) and Senator Alex Padilla (D-Pacoima) — opposing the bill this summer. It was delivered to the President and Vice President, all members of the California delegation in Congress, and congressional leaders.
Apparently wholesalers think victory is possible, as they continue to invest and build momentum. As of September 30, 2010, they have garnered 151 co-sponsors in 37 states — constituting 32% of the House of Representatives. They have no plans to back off, nor should their opponents.
   
Angela Logomasini has a Ph.D. in politics and is a Senior Fellow at the Competitive Enterprise Institute and has blogs at both winepolicy.com and weeklywinepick.com.
Footnotes