Wholesalers asking Congress to ban direct sales

bluebeard · Apr 18, 2010

Large National Wholesale wine and liquor interests accelerated their push before Congress to pass a law banning the individual, direct sale of products to consumers across state lines. They are now ramping up the hysteria to liken small interest, direct sales by micro wineries and breweries to bootlegging during prohibition. (They learned this the very jackasses sitting before them in commitee, so they know it works).

There is a link beow to read the details of this stupidity that our Congress is swallowing. (sniff...sniff...I smell campaign money. so do they)

Obviously this poses a severe danger to the success of small specialty wineries, micro-breweries and boutique distilleries.

I would think, that with all of the overwhelming, truly serious issues facing the country that Congress would have better things to do than to "spittle-lap" beverage wholesalers to further attempt to crush the small independent buisness owners of this country.

Then again, this Congress has already implemented never before seen (or imagined) steps that will squeeze the life out every small business interest in the country just in the past year and there are 3 more major ones on the table now.

This lunacy is only attacking one sector of the small business community (albeit a dear one) so it is getting NO media coverage. The other measures are being lauded as "brave" and "insightful" as our small businesses are choking to death. So why should we be surprised?

How do you claim to "look out for the little guy" while consistently courting the interests and campaign contributions of these industry juggernauts who then demand you do everything possible to crush any chance of "your little guy" ever succeeding?

http://www.winespectator.com/webfeature/show?id=42526

dr9 · Apr 18, 2010

I understand your sentiment about the left and small business in the general sense, but in this specific case I can't see the liberal political philosophy siding with the distributors.

fatbloke · Apr 18, 2010

Ok, so not being a US citizen, this is of no real concern to me, but couldn't this sort of thing be challenged as "unconstitutional" ? i.e. it's infringing on the right of the individual to conduct a business.

Gotta be worth a try, if you can garner enough support........

dr9 · Apr 18, 2010

fatbloke said:
Ok, so not being a US citizen, this is of no real concern to me, but couldn't this sort of thing be challenged as "unconstitutional" ? i.e. it's infringing on the right of the individual to conduct a business.

Gotta be worth a try, if you can garner enough support........

You apparently know more about the US Constitution than our elected representatives.

Medsen Fey · Apr 18, 2010

dr9 said:
...but in this specific case I can't see the liberal political philosophy siding with the distributors.

Historically, "liberals" have always favored "big business." It is easier for "big government" to regulate (and control) a few very large entities than hundreds of small ones.

dr9 · Apr 18, 2010

Then, why shouldn't I put a gun in my mouth right now?

Medsen Fey · Apr 18, 2010

dr9 said:
Then, why shouldn't I put a gun in my mouth right now?

Because that is never the answer.

Life is difficult at times - even painful - but it is still the most precious gift we have, and something quite irreplaceable. Now matter what government comes or goes, life will continue to give us challenges. Whenever those challenges make us think of giving up, it is time to speak to whomever you trust (friends, family, clergy, health professionals) to start working through those feelings. Just knowing that you aren't facing those challenges alone can sometimes be enough.

PM me if I can be of any help.

Be well.

Medsen

dr9 · Apr 18, 2010

Good answer... reminds me of Sam.

http://www.youtube.com/watch?v=Xfi4s8cjLFI

Angelic Alchemist · Apr 18, 2010

fatbloke said:
Ok, so not being a US citizen, this is of no real concern to me, but couldn't this sort of thing be challenged as "unconstitutional" ? i.e. it's infringing on the right of the individual to conduct a business.

Gotta be worth a try, if you can garner enough support........

Yes, it is unconstitutional. Lots of things are: taxing the second amendment to the point where it's nearly impossible for civilians to keep their right to bear arms is just one example. Hence, I shoot a recurve long bow.

These are problems, where I'm interested in solutions. So, what are the solutions? How do we keep our rights to do business without being crushed by pseudo-monopolistic entities? When Hagen-Daaz and Ben & Jerry's decided to sell a pint of icecream for the same price of the half gallons offered by the cheaper/larger companies, did they have these problems? How did they compete? I don't know. All I know is that it took a great deal of work/capital for me to start my little business, but my customers will pay $6 for a bar of my handcrafted soap because they don't want to put garbage on their skin. Likewise, people don't want to drink crap, but if that's all they can buy (because the little guys have been pigeon holed into bankrupcy) then consumers will continue consuming what's available. That's not a free market: that's called a damned dictatorship last time I checked.

bluebeard · Apr 19, 2010

Actually, an economic system where the business and industry sectors are privately owned, but controlled by a central government is the true definition of Fascism. An economy where the governement actually owns all businesses and industry sectors and the people are only workers is the true definition of Communism. Yes these are actually economic systems defined by their control of a central government.

In this case, what you have going on is an organized, large group of "middle men", wholesale distributors, pooling their resources to attempt to control a sector of an industry, which for the time being, is outside of their control. This prevents them from "getting their cut" by controlling the distribution of that sector.

These "middle men" see that an increasing number (still proportionately tiny) of these small regional wineries and breweries popping up. They are currently able to market their products directly to the consumer and this cuts the wholesaler out of the profit loop. The wholesalers see that if people are allowed to continue like this, they will eventually lose a considerable cut of the money circulating around.

They want to stop this trend before it grows large enough that the general population will become angered by this move if they wait too much longer.

These wholesalers make billions of dollars every year as a collective. They fell that should entitle them to the say-so over some little nobody daring to make a wine or mead and sell to the public ACROSS STATE LINES without their say so or their cut of his little business.

Selling these products across state lines gives the Congress the CHOICE to step in under the often abused, and conveniently misinterpreted Interstate Commerce Clause in the Constitution. That is the only reason we have Federal Law Enforcement by the way, solely because of an interpretation of the interstate commerce clause.

Given the make up of the Congress currently, the wholesalers believe this is the opportune time to receive sympathy for their percieved loss of control and profits because of these "independent" little guys going it alone.

They are probably correct. That is why they have chosen now to step in and make their move. You may not be aware of this, but this was tried 5 or 6 years ago but the Commerce Secretary at that time was very small business friendly and stopped the move at his door.

This could only have accomplished if the current Commerce Secretary allowed it to go this far. Given the current views of the administration towards independent business intersts, in actual practice, not in their sound bite politics, this was the best time for these wholesalers to to make an all-out effort to control the small wineries and micro-breweries.

Looks like they were correct.

skunkboy · Apr 19, 2010

dr9 said:
Then, why shouldn't I put a gun in my mouth right now?

Never let the bastards grind you down.

Be weird! Hail Eris! ;-)

MediaevalQuendi · Apr 21, 2010

This is not too surprising, considering what has been thrust upon the beer industry. I'd say mead and wine have been better off over the years, as the "middle men" have overlooked the industry to focus on beer (as it is more widely consumed, I believe). They want to force wineries/meaderies into the same, crappy system (three-tier) that forces brewers to attempt to get placement in wholesale circuits, and attempt to get retail outlets to stock them. That's no free market, for sure, and hasn't been for quite some time.

In other random Constitution discussions: I find it laughable (as I have in previous years) that Congress has interpreted the Interstate Commerce Clause to mean they can throttle and prevent Commerce, when the intent was for the Federal Government to be able to protect interstate commerce and competition....sigh....

But as long as we can keep brewing...... cheers.

CBiebel · Apr 21, 2010

MediaevalQuendi said:
They want to force wineries/meaderies into the same, crappy system (three-tier) that forces brewers to attempt to get placement in wholesale circuits, and attempt to get retail outlets to stock them. That's no free market, for sure, and hasn't been for quite some time.

This is basically the main reason for the many forms of packaging for the big brands of beer. You have six packs, 12 packs, 18 packs, 24 packs, 30 packs and even attempts at 36 packs. Then you have the various sizes: 7 oz bottles, 8 oz cans, 10 oz cans, 12 oz bottles, 12 oz cans, 16 oz bottles, and 16 oz cans (I'm listing only the ones that are in packs here, which would take up shelf space).

When one of the salesmen came in and suggested that the store I work in should order 10 oz cans, the owner balked. She said that with the choice between 8 oz cans and 12 oz cans, there really isn't a need for 10 oz.

We also don't show everything in a particular brand because of limited space, so that we don't get complete displacement (for instance, 24 and 30 packs are in the back, not on display), but this isn't an option for a regular supermarket setup.

It's all a matter of displacement. The big boys are providing so many choices of how to buy one single product so that there isn't much room on the shelf for other brands.

PitBull · Apr 21, 2010

Even worse in PA.

MediaevalQuendi said:
In other random Constitution discussions: I find it laughable (as I have in previous years) that Congress has interpreted the Interstate Commerce Clause to mean they can throttle and prevent Commerce, when the intent was for the Federal Government to be able to protect interstate commerce and competition....sigh....

But as long as we can keep brewing...... cheers.

Here in Pennsylvania, the state itself prevents both interstate AND intrastate commerce. I wanted to subscribe to one of those wine-of-the-month clubs, but the state prohibits direct sales from other states. Hard liquor and wine must be purchased from state-owned stores, comrade. Beer-by-the-case and kegs must be purchased at a state licensed distributor, who cannot sell individual six-packs. Six pack shops and restaurants can sell a maximum 144 oz. at a time (which means only one six-pack of pounders per visit). One must exit the store, then re-enter, if more than that quantity is desired. No grocery store sales are permitted at all.

We yearn for free enterprise within the state. Free interstate commerce is a complete pipedream here. And yes, we’ll keep on brewing!

AToE · Apr 21, 2010

We have special laws up here for meaderies that give them advantages to start up. For most breweries and wineries there's a min amount that has to be made a year, which is generally pretty high. Not too high if you wanted to go all out and start your own real meadery (think B. Nektar sized operation), but out of reach of someone that just wanted to make it to sell at say the farmers market.

What they did (in Alberta anyways, not sure about other provinces) was to basically remove all the restrictions around alcohol production if you own your own bees. So for example, a small apiary south of Calgary is now the provinces first (maybe only...) meadery, and they do not produce much at all, it can only be bought from them at their farm-store or at the farmers market in a nearby town.

The possible downside to that is that I've heard the gov may have gone overboard and made it so that you HAVE to own a % of the bees that made your honey. But that's just hearsay, I've never been able to track down a proper answer.

Also - not to be the annoying Canadian in a US forum, but we're obviously a lot more "left" than you guys (our conservatives are about as conservative as your Dems in most issues), and we allow direct sales from wineries and breweries, and almost always try to make sure that advantages like that remain in place for the little guys.

I don't think this issue is about right-wing vs left-wing (the argument can be made very effectively that BOTH sides prefer big business over small, especially in the US), the issue is smart vs moronic. (I really don't intend to fan the fires of political argument here, I like keeping the politics out of my mead making, I just thought I'd throw that out there).

Angelic Alchemist · Apr 21, 2010

PitBull said:
Here in Pennsylvania, the state itself prevents both interstate AND intrastate commerce. I wanted to subscribe to one of those wine-of-the-month clubs, but the state prohibits direct sales from other states. Hard liquor and wine must be purchased from state-owned stores, comrade. Beer-by-the-case and kegs must be purchased at a state licensed distributor, who cannot sell individual six-packs. Six pack shops and restaurants can sell a maximum 144 oz. at a time (which means only one six-pack of pounders per visit). One must exit the store, then re-enter, if more than that quantity is desired. No grocery store sales are permitted at all.

We yearn for free enterprise within the state. Free interstate commerce is a complete pipedream here. And yes, we’ll keep on brewing!

Reminds me of the dry counties here in Texas. If you want to drink in an establishment in a dry county you have to fill out a document to join the place's private club, because private clubs are allowed to serve alcohol where public establishments can't. Or some stupid loop hole like that. I forget how they make it work, but it's ridiculous.

Arcanum · Apr 21, 2010

Angelic Alchemist said:
Yes, it is unconstitutional.

It's actually not. It's bad policy, but bad policy isn't inherently unconstitutional. Congress is explicitly given the right to regulate interstate commerce. You might have an argument for Congress not being allowed to prevent direct sales within a state, but out-of-state is very clearly fair game.

Angelic Alchemist · Apr 22, 2010

Arcanum said:
It's actually not. It's bad policy, but bad policy isn't inherently unconstitutional. Congress is explicitly given the right to regulate interstate commerce. You might have an argument for Congress not being allowed to prevent direct sales within a state, but out-of-state is very clearly fair game.

I may be wrong, but I think the DOT is supposed to regulate interstate commerce for health and safety reasons.

Arcanum · Apr 22, 2010

Angelic Alchemist said:
I may be wrong, but I think the DOT is supposed to regulate interstate commerce for health and safety reasons.

It would be the FTC (Federal Trade Commission) or ATF (Bureau of Alcohol, Tobacco, Firearms and Explosives) that actually does the enforcement. The DOT just builds and maintains the roads and such.

The Constitution doesn't specify reasons for which Congress may regulate interstate commerce.

Article I, Section 8:
The Congress shall have power...

To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;

Bad policy, but not even remotely unconstitutional.

Angelic Alchemist · Apr 22, 2010

Arcanum said:
It would be the FTC (Federal Trade Commission) or ATF (Bureau of Alcohol, Tobacco, Firearms and Explosives) that actually does the enforcement. The DOT just builds and maintains the roads and such.

The Constitution doesn't specify reasons for which Congress may regulate interstate commerce.

Article I, Section 8:
The Congress shall have power...

To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;

Bad policy, but not even remotely unconstitutional.

Eh, I know that our hazmat drivers answer to the DOT when it comes to transporting fireworks, but it looks like you are right regardless - bad policy.

Wholesalers asking Congress to ban direct sales

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