Tuesday, January 8, 2008

Alcohol Wholesalers Use Money for Influence

According to an article published today by Reuter's, alcohol wholesalers spent $50 million to influence politicians and deny consumers the right to buy wines directly from producers in many states. In other words, wholesalers fought to keep their business alive and thriving by requiring wines to continue to go through wholesalers before they can be sold to the consumer.

When I read the first third of the article, I thought that, although appalling as a small winery and wine consumer, it was no different that anything the tobacco, firearm, or other threatened industry would do to keep themselves afloat. Then I read this:

"The amount of money alcohol wholesalers contribute to state political campaigns in an effort gain influence is often greater than far more visible industries. For example, in 2006, Texas alcohol wholesaler political contributions were greater than the political contributions of all gambling and casino interests, retail interests, food interests and all business services -- combined. That year Texas alcohol wholesalers also outspent commercial banks, security and investment interests, the insurance industry and banks and lending institutions when it came to political contributions."

Okay, this shocked me a bit. More than Texas casinos? All business and food services? For alcohol to have outspent all of these other industries, it's amazing. Granted, this did come from a press release by the Specialty Wine Retailers Association, but if it's true, it's hard to believe.

As a small winery, this means that it's even harder for us to ship our wines to many of these states. In Texas (among several other states), we have to pay the state for a permit in order to ship there. Another group of states passed legislation prohibiting direct shipping at all. Unfortunately, the cost of permits add up and, most small wineries can't afford to go through a distributor and wholesaler. Kind of ironic for a nation whose wine consumption has only been going up, up, up and will soon surpass Italy -- one of the top wine producing (and consuming) nations in the world.

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