More on Maryland: Del. Davis Chimes In

Posted by | Posted in Wine Politics | Posted on 03-31-2011

This past Sunday, as regular readers know, I had a short oped in the Washington Post commenting on the move by Maryland lawmakers to legalize the direct shipment of wine from out-of-state wineries but not out-of-state retailers.

That day, I received a long email from Maryland Delegate Dereck Davis, who chairs the House Economic Matters Committee. I strongly criticized Del. Davis in my piece, and he took issue with most of what I wrote.

His note was thoughtful, and his argument deserves to be heard. And I very much respect his engagement with me on this. So with Del. Davis’s permission, I’m publishing his letter in its entirety. Unsurprisingly, I disagree with most of what he’s written. So once you read his letter, check out my rebuttal below the fold.

I hope that this is educational – and once again, I urge all readers to “like” the American Wine Consumers Coalition on facebook. Wine consumers desperately need an organization like this to take root.

First, let me be clear about my position on campaign contributions: I have NO issue with them. In fact, I’m a hardcore libertarian on this issue – meaning I believe that any restrictions on political spending are restrictions on political speech.

Here’s why: Businesses are affected by political actions. And businesses have profits to protect. Most industries are happy to rent seek, manipulating the legislative process to quash competition. With so much money at stake, money will always find a way into the process as businesses attempt to influence lawmakers. If not through direct contributions, then through advertising. If not through advertising, then through lobbying. If not through lobbying, then through massive PR campaigns, well-funded advocacy groups, and the like. If you want to get the money out of politics, you first have to get the politics out of money.

And it’d be impossible to link campaign contributions directly to a piece of legislation. For exactly these reasons, though, the average consumer has a much harder time getting his or her voice heard by legislators. Money does, undeniably, buy access. Maryland’s wholesalers and retailers organize fundraisers, solicit additional contributions, and make it a point to interact with their elected officials as much as they can. They see this interaction as part and parcel of their job.

Not surprisingly, lawmakers turn to these generous patrons to become “better informed” about issues concerning those businesses. Lawmakers take their phone calls. So lawmakers like Del. Davis can hear all about how this bill will “hurt” mom-and-pop liquor stores.

Your average consumer, of course, can’t afford a lobbyist. Typically, your average consumer isn’t attending political fundraisers. Because there’s no money on the consumer side of things, consumers can’t donate $260,000 to politicians over just a couple of election cycles.

Business interests like liquor distributors, retailers, and wineries can all afford lobbyists because money is at stake. Consumers are left out in the cold. Is there anything even remotely equivalent with wine consumers? Of course not.

Del. Davis concluded his letter to me by writing, “they don’t print enough money for me to sell out my constituents.” I believe him – and I don’t question his integrity. But he must recognize that money does buy access. Did he meet with any registered lobbyists representing consumers?

Second, Del. Davis is right about why I excluded Del. Charles Barkley’s campaign contributions. Barkley has received very little money from the groups representing Maryland wholesalers and retailers. The reason? Del. Barkley has only chaired the Economic Matters Committee’s subcommittee on alcohol since January. That’s right – he’s only had a major role in regulating alcohol in Maryland for three months! And he has spent most of his career not on the Economic Matters Committee (which is what the wholesalers and retailers care about), but on the Appropriations Committee.

Third, Del. Davis describes Del. Barkley as the “lead sponsor” on HB 1175 (the direct shipping bill that excluded retailers). When introduced on February 16 of this year, HB 1175 had two sponsors: Del. Davis and Del. Barkley. Here’s the bill, as filed on Feb. 16.

Fourth, throughout his letter, Del. Davis suggests that this issue just doesn’t warrant his attention. “I had little to no involvement with any of these bills,” he writes. “The Economic Matters Committee had too many other important issues to deal with than to get bogged down with this issue,” he continued.

Why doesn’t this issue warrant his attention? Thousands of consumers have made their voices heard about this issue, and Del. Davis’s committee is responsible for determining which alcoholic beverages Maryland residents can drink. Being a legislator means having to grapple with issues that may not be of personal interest, but are of interest to one’s constituents.

For several years now, thousands of wine consumers in Maryland have begged their lawmakers to legalize direct shipping. Yet time and again, lawmakers have listened to the moneyed interests, caving to the wholesaling industry’s demands and refusing to even consider a bill.

This year, things finally changed – but only halfway. The out-of-state wineries got what they wanted — the ability to ship wine directly to Maryland consumers. Maryland wineries got what they wanted — the ability to ship directly to consumers both in Maryland and outside the state. The wholesalers and state-based protectionist retailers got what they wanted – a system immune from competition. Consumers only got half of what they wanted — Maryland citizens can now order directly from domestic wineries, but not from any retailers. Smart Maryland retailers unafraid of competition were also hurt, as they’re still prohibited from shipping both inside and outside Maryland and barred from setting up an online store.

It worked out this way because of what Del. Davis himself anticipated just day’s after the original bill’s introduction, when he commented about it in the Washington Post. Anticipating the liquor lobby’s opposition, he said, “I’m going to do what I can to forge a consensus.”

Why, exactly, was there any need for a “consensus?” The original bill – which would have legalized shipping from out-of-state wineries and retailers, secured 83 of 141 representatives and 32 of 47 senators. Overwhelming, bipartisan support like that doesn’t typically lead lawmakers to talk about “compromise.” It typically means they’ve already settled on a bill that can pass.

The “consensus” here was between wholesalers, wineries, and retailers. The majority of Del. Davis’s constituents — consumers — just didn’t matter.

Finally, Dereck Davis suggests that retail shipping into Maryland would threaten the livelihood of local liquor store owners “during the worst economic recession in modern times.” This is nonsense for so many reasons.

Maryland’s mom-and-pop bookstores have to compete with Amazon, and Baltimore’s trendy shoe boutiques have to compete with Zappos. If Maryland lawmakers decided to prohibit residents from ordering books, shoes or other wares online, they’d be laughed out of office. And voters — stuck with fewer choices and higher prices — would be infuriated.

Further, such a measure would enable Maryland’s retailers the opportunity to ship out-of-state. That’s why the smart, specialty wine retailers, through the Wine Merchant Association of Maryland, supported the original version of this bill.

Wine consumers deserve a free market in wine, one in which any adult can purchase wine from wherever he or she wants.

Comments (4)

  1. So the part of Del. Davis’s letter that I still don’t understand is his attempted explanation of the large number of co-sponsors of the original bill. As you point out, with a majority of the representatives and senators signing on a co-sponsors, they could have taken a vote right then and there and we’d have a direct shipping bill that includes wineries and retailers. There was no “consensus” needed — we already had one. Del. Davis fails to explain why “it became clear” to Del. Barkley that it couldn’t be enacted. Instead, he says that there were so many co-sponsors because it was the only direct shipping bill. If you already have a majority of both houses supporting it, why doesn’t that end the matter? Why even bother drafting alternatives or a “compromise bill”? You don’t need to compromise when you already have a majority (as anyone who watches Congress knows). Something happened in the interim, after HB 234 was introduced with all the co-sponsors. Whether it was something nefarious, like a lobbying effort or well-timed contribution or meeting, or something innocent, like a legitimate legal/constitutional/regulatory issue that was previously unknown, this is the crucial missing explanation. And Del. Davis’s letter, while a nice gesture, shines no light on that.

  2. The first thing they teach you when you study epidemiology is that association isn’t causation. But they also tell you not to throw common sense out the window, either. So no one expects an exact quid pro quo of contribution => vote. But which phone call is Del. Davis going to answer first, a major contributor’s or a non-contributing constituent’s?

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