Last week, I had an op-ed in the New York Times on the story behind HR 1161 — explaining why it’s so dangerous and will hurt consumers. It ruffled quite a few feathers.
This week, Rebecca Spicer and Jerry Brown — the vice presidents of public affairs and communications for, respectively, the National Beer Wholesalers Association and the Wine and Spirits Wholesalers of America – responded with a letter to the Times.
The response is chock-full of doublespeak, so I’ve helped translate it (in red text) below the fold…
To the Editor:
Re “Wholesale Robbery in Liquor Sales,” by David White (Op-Ed, April 4): The Community Alcohol Regulatory Effectiveness (CARE) legislation reaffirms state alcohol laws, including laws in the nearly 40 states that allow direct shipping from a winery to a consumer.
Translation: The law cements an antiquated system which has its roots in prohibition. And we’ve convinced lawmakers, falsely, that alcohol is required to pass through an artificial middleman before making its way to consumers.
Notice, also, the focus on “producers.” The wholesalers don’t want consumers to access wines from out-of-state retailers, auction houses, or wine-of-the-month clubs.
The CARE act does not limit any state’s ability to allow wineries or other producers to ship directly to consumers.
Translation: While HR1161 doesn’t limit a state’s ability to “allow” wineries to ship, it does enable states to limit consumer choice. Consider two examples put forward by Wendell Lee of the Wine Institute last week: “State A passes a law that expressly taxes wine produced in State A at $.20 a gallon, but any wine that is not produced in State A at a rate of $3.00 per gallon…. Or State A passes a law that allows wine producers that produce up to 30,000 gallons of wine, regardless of the state they’re in, to ship direct to consumers in the state. All of the wine producers in State A are under 30,000 gallons.” This proposal is anti-consumer and anti-choice.
Notice, again, the writers’ focus on wineries and “other producers.” No mention of out-of-state retailers.
As for consumer choice, today’s system of state-based alcohol control drives entrepreneurial growth and generates vast consumer options. Within this regulated system, more than 1,700 breweries and 7,000 wineries have come into existence across the United States, and there are as many as 50,000 wine labels and 13,000 beer labels available. What other consumer product in America has so much variety?
This is an informal fallacy. There’s no way to prove (or disprove) that we have “more than 1,700 breweries and 7,000 wineries” because of our hyper-regulated system. I’d argue just the opposite. Basic economics dictates that the fewer the regulatory hurdles (and, consequently, the lower the costs as a result of less regulation), the easier it is to enter the market. The easier it is to enter the market, the more choices consumers would have.
The CARE act would maintain [today’s] effective system.
Translation: Everything will stay the same, until we lobby state legislatures to pass even more anti-consumer laws.
If HR 1161 simply helps us “maintain” today’s system, then why is the wholesale lobby pushing this bill, at all?
Ultimately, the CARE act is about who should make decisions regarding alcohol regulation (elected state legislators rather than unelected federal judges in distant courts), not what those decisions should be. National surveys show that the majority of Americans believe that alcohol decisions should be made at the state and local level. So do we.
By using political buzzwords — “unelected federal judges in distant courts” – the wholesale lobby hopes to hoodwink the right into supporting its measure, even though it flies in the face of the Constitution’s Commerce Clause and free-market commerce.