Should beer drinkers CARE about HR 5034?

HR 5034, known as both The CARE Act and “The Wholesaler Protection Bill,” will potentially shut down direct-shipment from small wineries.

Should beer drinkers oppose CARE?

In the controlled world of wine and beer, wine laws often set precedent for things to come for beer. HR 5034 decreases the availability of wine, supporting in-state distributorships over out-of-state self-distributing wineries — and it will do the same for beer.

What’s the real concern: An alcohol epidemic or the financial crisis?

“Talk of a bill first surfaced when a Congressional subcommittee held a hearing with little notice on March 18. During the session, wholesalers and state regulators argued that the three-tier system is under attack and that the U.S. faces “an alcohol epidemic” if Congress does not intervene and prevent deregulation of alcohol sales. The hearing took many in the wine industry by surprise, and no winery-, retailer- or consumer-advocacy groups testified.”
—Robert Taylor for the Wine Spectator in “An End to Wine Direct Shipping?”

Personally, I’m not convinced that we Americans are facing an “alcohol epidemic.” What I do see is states, such as Washington, scrambling to come up with funds in any way possible. In 2010 we experienced* many new tax levies, including an increase of tax on high-volume beer producers, high-gravity beers by high-volume producers (five fold!) and import beers.

Let’s stop the “alcohol epidemic” spin and say what’s really going on. The states see an untapped stream of tax revenue from online alcohol retailers and out-of-state wineries. Most are neither licensed by their Liquor Control Boards nor paying taxes to the Departments of Revenue in their end consumers’ states. And each state is looking at ways to capture more revenue in these financially critical times.

Free trade or increased regulation?

“Titled the Comprehensive Alcohol Regulatory Effectiveness Act of 2010, or the “CARE Act,” the proposed bill would effectively allow the 21st Amendment to trump the Commerce Clause, granting states immunity to litigation based on discriminatory alcohol distribution laws.”
—Robert Taylor for the Wine Spectator in “An End to Wine Direct Shipping?”

Are your beer shipments in jeopardy?In attempting to identify the number of wineries throughout the United States who direct-ship to consumers, I found myself wading through many Websites. At least 125 wineries in California would be affected, but that is likely to be significantly higher, as those reported are part of The California Wine Export Program. Washington reports over 600 wineries; I’m not sure how many offer direct-ship to consumers. And wine enthusiasts are concerned that HR 5034 will cease their ability to get these wines and effectively shut down the majority of these small producers.

In direct opposition of HR 5034, organizations such as The Wine Institute are promoting Free the Grapes!, a national, grassroots coalition of consumers, wineries and retailers to remove restrictions in states that still prohibit consumers from purchasing wines directly from wineries and retailers. As a beer consumer, it wouldn’t be a bad thing to jump on board with these wine coalitions — after all, restrictions on wine = restrictions on beer.

Today just a handful of breweries offer direct-ship to consumers. And most of those breweries rely on distributor-based chains, rather than direct-ship to consumers, as revenue streams. However, more than 30 online beer retailers will be affected by the implementation of this law.

How you can CARE

Communicate with your Representative. Speak your mind on why wineries, breweries, and online alcohol retailers should be allowed to ship direct to you, across state lines. This isn’t about an epidemic; it’s about control. Ask them to oppose HR 5034 — The CARE Act doesn’t CARE about freedom of choice.

For a complete list of tax increases and repeals, visit The Washington State Department of Revenue: 2010 Tax Legislation.

For a list of state-by-state carrier restrictions on alcohol shipments, check out The Wine Institute’s State-By-State Carrier Status.


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