California wineries battle against alcohol regulation bill

October 3, 2011

National beer and wine wholesalers want legislation to affirm state control over alcoholic beverage sales, but wineries in California and nationwide say it’s an attempt to limit direct sales to consumers, a rapidly growing segment of the wine market. [Californian.com]

The resolution, HR 1161, the Community Alcohol Regulatory Effectiveness Act, was introduced by Rep. Jason Chaffetz, R-Utah at the request of industry wholesalers. It currently has 109 co-sponsors.

Wholesalers depict it as an attempt to rescue state and local control over alcohol sales from “online alcohol sellers, big-box retailers, international alcohol suppliers and professional plaintiffs” that want federal courts to allow them to sell larger volumes of alcohol at low or below-cost prices, the Californian said.

Wineries contend the bill is a disguised attempt to undermine their constitutional rights to engage in interstate commerce, especially direct sales to consumers across state lines.

No state has more at stake than California, whose wines accounted for 61 percent of sales in the U.S. market in 2010 and had a retail value of $18.5 billion, the Californian said. And such totals were registered as the United States surpassed France last year as the world leader in wine consumption, according to the San Francisco-based Wine Institute.

Robert Koch, president of the institute, calls the legislation “the wholesaler monopoly protection bill.” In a statement to the Californian, he warned it would lead to states discriminating against out-of-state wines.

“If this bill became law, it would make it much harder for vintners to get their wines to market. Wineries are being established all over the country and in this time of needed job growth, this legislation would be job-killing. We do not believe Congress should spend valuable time wading into an intra-industry squabble to protect the monopoly distribution system of the wholesaler-middlemen,” he added.

Rep. Sam Farr, D-Carmel, is battling against the resolution he says will economically harm wineries on the Central Coast.

“The Central Coast is home to some of the finest wineries in the world, with a demand to match,” Farr said in a statement. “HR 1161 would severely hurt the ability of our local growers and vintners to get their products to the marketplace, as well as limit consumer access to the wide array of wine available locally and across the country.”