Saturday, June 5, 2010

Why Not Ask Us?

Floods, earthquakes, oil spills, market roller coasters, it seems every time we open a newspaper, we're reading of a new disaster.  Well at least we have our wine!

Not so fast!  Your right to enjoy a full bodied, luscious Cabernet Sauvignon or a crisp, minerally Sauvignon Blanc is under attack.  You heard me correctly.  The Comprehensive Alcohol Regulatory Effectiveness Act of 2010 (H.R. 5034), ironically called The CARE Act, was introduced in the US House of Representatives just over six weeks ago.  More than 100 congressmen have signed on as co-sponsors.  And equal number of representatives stand against the bill.  The lobbyists are hard at work on both sides.

If the bill is passed, it would allow states to discriminate against wineries as long as it isn't "without justification".  So what's at stake?  The new bill effectively allows states to replace current direct shipping laws with discriminating, out-of-state shipper bans.  Once these bans are in place, wineries and retailers alike will no longer be able to ship to consumers outside of their home state

The ban will suffocate small wineries and retailers, cutting thier reachable marketplace by unthinkable percentages.  That wine club that ships you those delightful treats? Gone.  That cult winery that sends your favorite hard to get Cabernet?  No more.  Small cult wineries that sell strictly by mailing list?  Done.  Small boutique wine retailers?  Bankrupt.

Why?  Many large multi-state distributors as well as large brand organizations want to burden the American consumer with brands churned out by the largest, most mediocre wineries, breweries and distillers.  What the retailers and ultimately the consumer will be faced with is a homogenized selections on alcoholic products that will be ruled by big box brands - the brands with little imagination, vision or artistry but giant marketing and lobbying budgets.

H.R. 5034 would bring wholesalers and distributors much closer to the kind of anti-trust exemption baseball owners currently enjoy.  The bill will protect the bottom line of wholesalers and distributors while destroying free trade in the wine industry.  It is true.  The governance of the distribution system for alcoholic beverages in antiquated.  State laws, which control most alcoholic beverage distribution and sales organizations, were written at the repeal of Prohibition.  No one dreamed of the internet.  No one envisioned a retail system built mostly of "mom & pops" reaching a national, hell, even a global market using websites and social networking systems.  Certainly, changes in the way alcohol is governed need to made.  But H.R. 5034 is not the answer.  A new system of governance needs to be created that will give the consumer a better choice and increase competition.  H.R. 5034 only siphons choice and competition.

I have been involved in the wine retail business for nearly 20 years (I started as a kid).  This is the first time I have experienced a situation where wineries, retailers and consumers have come together to fight a battle together - towards the same goal.  It is true that the system for the distribution and governance of alcoholic beverages is long due for an overhaul.  The answer, however, is not H.R. 5034.  The answer is to find a happy medium by protecting free trade while allowing economies of scale to exist.  The industry is rife with innovators on all sides of the chain - from Randall Graham to Charles Bieler, Therry Thiese to Neal Rosenthal, Andrew Fisher to Gary Vaynerchuk and every wine geek that started with a passion to chase a dream.  It's high time we come together to innovate.  We are the ones who can create a better solution.  Why not ask us?

In Good Taste,


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