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Mark Squires' E-Zine on Wine

March/April, 1998

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The Evil Empire Suffers a Setback


    In past issues of the E-Zine,  you have read   articles about The Wine Lover's Public Enemy #1, namely the Wine and Spirits Wholesalers' Association, and In Defense of Wine and Free Markets: Say NO to Neo-Prohibitionists.  This article is one in a continuing series on these themes.  Obviously, we are all concerned about the assault on free trade spurred by self-serving, anti-consumer,  economic interests.   As aptly put by William MacIver of Matanzas Creek,   "it is very difficult to look at these facts without labeling the problem [of opponents of free trade] as mere greed."

   Let me note first that I do not suggest at any time in this article that the battle has been won, that the enemy is defeated,  or that the sun is rising across America for wine collectors. To the contrary, the Empire is well financed.   It has the advantage of a long tradition of restrictive state laws, and a long tradition of legislators making the laws more and more restrictive.  (For a good, short history of how Congress over the years keeps reacting to demands to make laws ever more restrictive, see Florida Dept. of Business v. Zachy's, et al., 125 F.3d 1399 (11th Cir. 1997). To see how stupid wine laws can get, read  Frank Prial's New York Times column of March 11, 1998.) The Evil Empire also has allies in legislators who serve special interests and think that consumers can be mistreated with impunity. So, the battle is ongoing, not over.   But there is some evidence that the tide is turning.

    In New Mexico, which is one of thirteen or so reciprocity states, wine enthusiasts banded together and testified before the state legislature, convincing legislators not to adopt restrictive laws.  In New Jersey, a felony shipment bill similar to Florida's is bottled up in committee.  And in Louisiana, after listening to all sides,  the State proposed a reciprocity bill, not a felony shipment law.

    It is remarkable to say that there even is a battle now.  It seemed not too long ago that the special interest blitzkrieg was unstoppable.  Churchill once said that before Stalingrad, the Allies in World War II won nothing of significance.  And after Stalingrad, they lost nothing of significance.   The battle of Florida may not have the same importance as Stalingrad, but it will, one hopes, be a landmark.

    Florida has always been way out in front.   It was the state that made headlines when it passed the laws making it a felony to ship wine to its citizens.   The Wine and Spirits Wholesalers Association loved the laws, but not too many others did.  Then, some wineries announced boycotts of local Florida events.  Some Florida legislators have apparently begun to have second thoughts, now that the consumer impact of what they have done has become apparent.   And, most importantly,  just as I predicted at the time,  Florida's first efforts to enforce its extraterritorial laws have failed.

    In the Eleventh Circuit case cited above,   a very technical case in many respects, Florida failed in its efforts to force Federal Courts to assume enforcement powers over interstate shipments.  It made the mistake of picking on big retailers rather than little wineries.   There was a battle, not a walkover.   This  battle was arguably critical, as Federal Courts have far broader jurisdiction than local courts do.    If Florida currently ever has the audacity to attempt extradition of, say, a California winemaker, I predict it will suffer even greater losses--in money, goodwill, prestige and respect.

    The tide does not turn, of course, by common sense alone.  Our political system is too well greased with special interest money for that.  There needs to be organized and well financed opposition, too.    One leader is the Coalition for Free Trade in Licensed Beverages, led by William MacIver of Matanzas Creek.   In a recent speech to the California legislature,   MacIver said, with respect to direct shipping,  that, "No other issue is more important to the growth of the wine industry because under the present mandatory three-tier system, market access is severely restricted and, most often, practically closed to the majority of producers. It serves neither consumer nor producer efficiently. I believe it is the single greatest deterrent to the growth of the wine industry."   A complete copy of MacIver's speech can be read by clicking HERE.   Thanks to Charles Miller for passing this along.

    In sum,  I am not so sure there is a light at the end of the tunnel, but I am sure that the battle has been joined, and that we have allies now, too.  Everyone has to help, though.  One problem is that we tend to be passive, even though, as a group, I believe we are relatively well educated,  relatively affluent and relatively prominent.  We could make a difference as individuals.   What are you doing to help?  If you live in Pennsylvania, did you write your legislator and indicate how important the privatization bill was to you?  If you live in New Jersey, did you express your outrage at the pending felony shipment bill?  If you live in New York, where reciprocity laws failed recently,  did you explain to you representatives that you are unhappy that they are held captive by anti-consumer special interests?  And that you'll remember who was working for you instead of the special interests in the next election?

    The Empire has suffered some setbacks, but remember that the Empire strikes back.  We need to increase our efforts.   As MacIver aptly concluded,  "It is past time to make direct shipping legal so all wineries can fully and freely participate in the market. There’s room and a market for everyone. There is no reason to maintain the present system except to satisfy the wholesalers’ penchant for absolute control."