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Wine Institute Statement on Hearing on Legal Issues Concerning Alcohol Regulation

March 18, 2010

This statement from Wine Instiitute was released following yesterday's Hearing on: Legal Issues Concerning State Alcohol Regulation which was held by the Subcommittee on Courts and Competition Policy

From the Wine Institute:

States’ rights to regulate wine and alcohol granted by the 21st Amendment are not absolute. Court decisions over the last 40 years balance state authority with important Constitutional rights, such as the Commerce Clause, Due Process and the First Amendment. The landmark U.S. Supreme Court case, Granholm vs. Heald, reaffirmed state rights under the 21st Amendment to regulate wine and alcohol, but correctly ruled that these rights do not supersede other provisions of the Constitution.

To protect their economic interests, the National Beer Wholesalers Association (NBWA) is asking Congress to grant states unlimited power to pass laws dealing with wine and alcohol. States have never had this power before and there should never be laws passed that grant license to a state to create and perpetuate an environment of discrimination and inequality.

NBWA is also asking for anti-trust immunity to protect its state-mandated monopoly distribution. This will result in reduced competition, and harm to wineries, distilleries, breweries and retailers. Equally important, this effort by beer wholesalers to stunt competition and gain power over producers will limit consumer choice.

State laws should encourage, rather than stifle, competition and any effort to control prices or distribution should not be immune from the Sherman Act and other antitrust principles. State-mandated monopolies and other anti-competitive provisions that deal with wine and alcohol should always be subject to antitrust review.

The wholesalers are using this hearing as a stage for introducing legislation to further protect their monopoly distribution system by putting them out of reach of nothing less than the U.S. Constitution and antitrust laws. No other business sector has been extended this level of immunity. This would be an unprecedented power shift with major constitutional consequences that will be opposed by those who care about free trade and our nation’s 6,700 wineries.


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