Stop HR 5034

Dear Senators Feinstein and Boxer, and Congressman Thompson:

I am a small business owner in the wine industry. My consulting firm assists wineries – most in California – market and sell their wine throughout the U.S. The recent bill, HR 5034, threatens both my clients and my own business.

In the last 20 years the number of wine wholesale distributors in the U.S. has declined from roughly 7,000 to around 700 today. This consolidation in the wine wholesale distribution channel has increased the difficulty of small wine producers to reach markets, especially since there are over 250,000 different wines available. There are simply not enough wine wholesale distributors to be able to effectively represent and sell that many products.

That is why direct access to the market, be it to restaurants, retailers, or consumers, is now vital to the U.S. wine industry. HR 5034 blocks this access to market. It serves no other purpose but to protect wine wholesale distributors’ business, without providing for protecting and enhancing wine producers’ business.

The wine wholesale distributors claim that HR 5034 gives Constitutional powers back to the States. But it overturns the Constitutional provisions of unfettered and equal commerce between States. Such a bill that directly contravenes the U.S. Constitution is not a viable solution.

Wine wholesale distributors also claim to safe-guard against underage drinking and promote temperance. But even a cursory understanding of the wine sales channel clearly shows that wine wholesalers have no interaction with the public, and often spend vast amounts of money in the promotion of consuming alcohol. It is the wineries themselves, along with restaurants and retailers, that are the front line against underage drinking, and actively promoting moderate consumption.

Please do not let powerful lobbyists destroy California jobs with the erroneous arguments for HR 5034. The future of all commerce should be well-regulated but open markets – for both wine and other products.

I do hope that you will stand with California small businesses and stop HR 5034 from ever reaching the floor for a vote, much less ever become law. California needs its small businesses in this time of deep recession and financial turmoil.

Sincerely,

Paul Tincknell
President
Tincknell & Tincknell, Inc.
Wine Sales and Marketing Consultants since 1997

PS – This letter was sent to all three of my representatives. It’s time to stop wine wholesale distributors from buying market protection from our government. Please feel free to use any of the above in your own correspondence to your elected representatives. You can find and email them through this site: www.contactingthecongress.org.

A Reply

May 26, 2010

Dear Mr. Tincknell:

Thank you for contacting me regarding the Comprehensive Alcohol Regulatory Effectiveness (CARE) Act of 2010 (H.R. 5034). I appreciate you taking the time to share your concerns with me on this issue.

As you are aware, this bill would significantly harm the California wine community, especially small wineries. H.R. 5034 was proposed by the National Beer Wholesalers of America as an attempt to increase their control over which products are sold by beer, wine and spirits wholesalers. It’s completely wrong-headed, which is why I’m working extremely hard to make sure it goes nowhere.

Before I give you the background on the bill, let me assure you – this bill is widely opposed in Congress, and I’ve been told by Speaker Pelosi that it’s very unlikely to succeed. However, the effects of this bill could be devastating to California wine and the beer wholesaler guys are working overtime for its passage, so I am going to stay vigilant in my opposition. And I hope you will join me in that effort.

What’s in this wrong-headed bill?

Simply put, this bill is an attempt to upend our country’s current alcohol distribution system. For decades, our courts have struck a balance between the 21st Amendment, which allows states to regulate the transportation or importation of alcohol, and other constitutional rights such as the Commerce Clause, which ensures the federal government’s right to protect fair and non-discriminatory commerce across state lines.

H.R. 5034 would make the dormant Commerce Clause inapplicable to any state laws dealing with alcohol unless “unjustified” and “facially discriminatory.” It would shift the burden of proof away from the states to defend laws they pass and make state laws supersede any federal law that is inconsistent with state law’s provisions. Laws like the recently struck-down direct shipment law in Massachusetts would be immune from Constitutional scrutiny.

Bottom line: this legislation allows Congress to pick the winners and losers in the wine business. It means wholesalers could have complete control over which wines consumers can access. And wineries and wine retailers would have no recourse if discriminated against.

What can you do about it?

I’ve heard from many people in our Congressional District who oppose this legislation and I am very grateful for your support. If you have colleagues or friends in any other Congressional Districts – in California or any other state – I encourage you to have them contact their Member of Congress and ask them to not co-sponsor H.R. 5034.

You can read more about this harmful legislation in Wine Spectator: http://www.winespectator.com/webfeature/show/id/42526
And you can also join a Facebook group against H.R. 5034: http://www.facebook.com/STOPHR5034

Again, thank you for sharing your thoughts with me. Please continue to contact me on all issues of importance to you and to our district.

Sincerely,

MIKE THOMPSON
Member of Congress
http://www.mikethompson.house.gov

May 19, 2010 | Filed Under Ferment, News