The House Judiciary Committee hearing held yesterday morning for HR 5034, referred to by groups who oppose the bill as “the wholesalers’ monopoly protection bill,” was applauded by both Wine Institute and WineAmerica.
Constitutional and regulatory law expert Tracy Genesen testified on behalf of Wine Institute and, following the hearing, spoke during an HR 5034 post-hearing teleconference hosted by Free the Grapes, the grassroots coalition that seeks to remove restrictions in states that still prohibit consumers from purchasing wines directly from wineries and retailers.
Genesen said that it is vital to the industry to be able to direct ship to consumers and that most wineries cannot get wholesale representation. She said the bill is unnecessary special-interest legislation intended to protect wholesalers at the expense of consumers, retailers, importers and the nation’s 7,000 wineries.
In her testimony, Genesen addressed wholesaler claims that the legislation is needed to shore up state laws, noting that states enforce nearly 4,000 alcohol laws which give them broad powers to protect public safety, impose taxes and otherwise limit availability, even to the point of taking direct control of distribution through state-run stores.
“H.R. 5034 is a drastic solution to a problem that does not exist,” said Genesen, in concluding her testimony. “This committee should decisively reject it.”
In the post-hearing teleconference, Genesen said that, during the hearing, there was a lot of crying about “underage access” from the opposing side, but the cries were falling on deaf ears. The next step, she said, is for Wine Institute lobbyists to put together fact sheets for the Judiciary Committee about the FTC report that debunks the myth that underage access is a problem. “We are going to talk to each and every Judiciary member specifically to kill the whole issue of underage access so they know we are not ready to compromise,” she said.
In concluding the post-hearing teleconference, Genesen said, “The audience seemed to think that our side came across as measured and reasonable and not hysterical while the other side came across as hysterical with the same old tired arguments.
“There is still work to be done but we will get out of this session alive. If not, we will go back after them in spring. I would just say that we are in good shape, we just have some additional work to do,” she said.
Jeremy Benson with Benson Marketing Group, who was also speaking during the post-hearing teleconference, said consumers need to continue writing letters of opposition on HR 5034 to Congress. This can be done through the Free the Grapes website at www.freethegrapes.org. He said the bill would be pushed into 2011.
Robert P. Koch, president and CEO of Wine Institute, applauded Genesen’s appearance before the Committee and thanked Chairman Conyers for inviting Wine Institute to testify. “Once again, the wholesalers failed to make their case, and it is becoming well understood on Capitol Hill that this legislation serves to protect the economic interests of the wholesalers,” said Koch in a statement released by Wine Institute directly following the hearing.
WineAmerica also sent out a statement following the conference with Chief Operating Officer Cary Greene’s thoughts on today's hearing: "At today's hearing, H.R. 5034 showed its true colors. This is pure special interest legislation that will harm wineries and consumers and upend decades of settled alcohol law," said Greene in the statement.