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Family Winemakers of California Statement on H.R. 5034

April 21, 2010

Family Winemakers of California (FWC) is opposed to federal legislation to strengthen state regulation of alcohol and lock in the three-tier monopoly structure because it will roll back progress made in creating market access for a multitude of small wine producers across the country. H.R. 5034, sponsored by the National Beer Wholesalers Association, is a strategy designed to strangle litigation on direct shipping that has increased consumer choice in wine.

FWC has spent the past 10 years working on direct shipping litigation on behalf of its 650 small producers to help wineries without distribution and a retail presence gain access to new consumers. Litigation has been necessary because wholesalers have concentrated political power at the state level. "A focused litigation effort over several years led to the Granholm decision in 2005. Just recently Family Winemakers of California v. Jenkins overturned a production cap law in Massachusetts at the 1st Circuit Court of Appeal. Without the lever provided by the courts on facially neutral laws that discriminate we will see a concerted push to roll back direct shipping gains," said Paul Kronenberg, President of Family Winemakers of California.

H.R. 5034 would fundamentally change the way discriminatory laws are challenged in court. It would essentially allow the 21st Amendment, which gave the states the right to regulate alcohol, to trump the concerns of the Commerce Clause. The burden of proof to challenge a facially neutral law that discriminates would be so narrow that litigation would wither and put interstate commerce in wine at jeopardy.

The bill is a naked attempt to dominate the marketplace and change consumption patterns. It puts at risk most of the 7,000 wineries in the nation.

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