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Protect Consumer Choice: Voice your Opposition to HR 5034

Quick Links:

  • What is HR 5034?
  • How to Oppose HR 5034
  • How does it Threaten Wine Shipping?
  • Why was HR 5034 Introduced?
  • Resources: Does your Congressional Representative Support HR 5034?

What is H.R. 5034?
HR 5034 is special-interest legislation that pretends to protect the public and reaffirm states’ rights, but is really intended to put more money in the wholesaler middlemen’s pockets by doing an end-run around the U.S. Supreme Court and pre-empting the Constitution. It would give wholesalers unfettered monopoly power to pass discriminatory state laws that would remove your ability to buy wine directly from your favorite winery or merchant. It would harm your state’s wineries, brewers and distillers, as well as businesses, jobs, and state and local economies.

What Can Wine Lovers Do?
Wholesalers are betting that wine lovers like you will be confused by the bill and will not make the effort to voice opposition to your representatives in Congress. Consumer pressure – through letters and calls – is critical to preventing HR 5034 from becoming law.

Step 1: Take 2 minutes and personalize a letter to your Congressional representative.
Step 2: Write a letter to your local newspaper (see Resources for more info)
Step 3: Sign up for email updates and fan us on our Facebook page for updates.

How Does it Threaten Wine Direct Shipping?
HR 5034 aims to negate the significant reforms achieved through 50 years of case law, including the U.S. Supreme Court’s 2005 Granholm vs. Heald decision, which was instrumental to increasing the number of states that allow legal, regulated winery-to-consumer shipments.

  • Will Put Discriminatory Shipment Bans Beyond Legal Challenge: HR 5034 will make state laws that are in violation of the Commerce Clause, or any other federal provision, immune from challenge. Make no mistake, influential wholesalers will continue to attempt to pass discriminatory state laws including prohibitions on direct-to-consumer shipments from out-of-state wineries, which was invalidated in the Granholm v. Heald ruling.  If HR 5034 passes, it will be virtually impossible for consumers, winemakers or others to challenge these discriminatory bans.
  • Will Reduce Consumer Choice in Wine, Bankrupt Wineries: Only 17% of wineries are distributed nationally, and 54% of them were unable to find a wholesaler in states where they actively sought representation, according to a survey by Wine Institute, a public policy trade association representing more than 900 California wineries. As a result, many wineries now rely on direct sales to survive. If a winery cannot secure distribution, but is prohibited from selling to its customers directly, it will be locked out of the market and consumer choice is significantly diminished. Bad for you, bad for your local wineries.
  • Will Ensure Wholesaler Monopoly Power: HR 5034 will give wine wholesaler middlemen the power to pass state laws to gain unfettered monopoly power and to pass discriminatory laws that would not only reduce consumer choice in wine, but also hurt businesses, jobs, and state and local economies.

Why was HR 5034 Introduced?
Simply put, HR 5034 is a special interest power grab by wholesalers to monopolize the market.
 
Introduced to the U.S. Congress in March 2010 by the National Beer Wholesalers Association (NBWA), with support by the Wine & Spirits Wholesalers of America (WSWA), HR 5034 pits consumers, winemakers, brewers, distillers and retailers against the supporters of the bill: wholesalers.
 
The middlemen purchase wines from winemakers, and re-sell it to your favorite retailers and restaurants. The wine wholesalers are represented by WSWA, a Washington, D.C. lobbying association whose members are not publicly traded companies you might recognize. Ninety-nine percent of US wine production flows through these wholesalers in the so-called “three-tier system” that connects winemakers, wholesalers and retailers.
 
But they want the remaining 1%, and are willing to prevent wine lovers like you from deciding which wines you want to enjoy, and how you purchase them, in order to further their grip. 
 
And, the bill’s implications go far beyond wine. It would also undermine federal authority over pricing, taxation, product formulation, advertising, labeling, and product safety. That’s why brewers and distillers – mostly family run and operated companies – are also opposing HR 5034.
 
Resources
There are a lot of ways to learn more about HR 5034; we have included several here. 

 

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