Wednesday, March 23, 2011

HR 1161

It seems that everywhere you turn these days, people are fighting and arguing over entitlements.  HR 1161 is a perfect example.  This bill is sponsored by the alcoholic beverage wholesalers and would allow states to shut down out of state wineries from shipping directly to consumers, while allowing in state wineries to ship to consumers.  In my opinion, this is a battle over their belief that they are entitled to protection of their government enforced monopoly on a distribution network.  One that exempts local winery shipments to consumers, because their lobbyists tell that they will never get support for that in the state legislatures.

First, do not let anyone tell you that this bill has anything to do with protecting individuals from receiving alcohol.(I think they actually had the guts to call it the Care Act.)  The only thing that has changed on that front is that the Supreme Court has ruled that you cannot allow in state wineries to ship wine to consumers and then ban out of state wineries from shipping wine to consumers.  If there actually was a problem with direct shipment of wine, both in state and out of state shipments can be shut down right now.  This is what Utah does, and so do nine other states.

Second,  I do not have a problem with distributors.  They provide a service to wineries that is not going away any time soon. In fact, I wish that there were more distributors, as I believe that they do an excellent job of getting wines into retail storesa nd restaurants throughout the country.  Most small to midsize wineries do not have the ability to market their wines on a national level and would never reach these consumers in their local stores without a distribtor to help them.

What I can't stand is that the distributors feel entitled to protection of this plan from direct wine shipments to consumers.  In many ways, it is similar to so many other examples of entitlements.  We hear about Teacher's entitled to tenure after only a few years of teaching. I regularly hear about citizens feeling entitled to tell people what they can do with their property and what types of businesses they can rent that property to, even though the zoning law allows the owners proposed use. Finally, our President, adn the majority of the Republicans in Congress, feel entitled to unilaterally decide to enter a civil war in Libya without so much as as a real explanation to the Country, which I find incredibly disappointing as one of his supporters. (This is the best post I have read on the Lybia situation.

Going back to our friends the Wholesalers and HR 1161, I would urge everyone to write their Congressmen and ask them not to support this bill.  There is no moral basis for the entitlement program urged by the wholesalers. Further, they are not going away and still serve a very important role in the marketing and sale of wine. If we create this entitlement program, we set up yet another lobbying group that will distract our representatives from doing their jobs.

Sunday, March 6, 2011

AB No. 1356 - Tasting Room Regulation

In a move to require Tasting Rooms to be treated more like bars and nightclubs, Assembly Member Mike Eng has proposed AB No. 1356. This bill is being sponsored by Santa Barbara County.  It will require that any application for an off-site tasting room be denied, if it would result in an undue concentration of licenses.

In fact, many tasting rooms are located in rural communities in and around the wine country.  As an example, Los Olivos contains more than 20 tasting rooms and has become known for its tasting room row on Grand Ave.  This group of tasting rooms would constitute an undue concentration, as we have only 800 people in this town.

If denied due to undue concentration of licenses, a Winery could request a finding of Public Convenience of Necessity (PCN) from the local governing jurisdiction.  This is the same procedure that bars and nightclubs go through now.  This proposed law would provide a powerful tool to communities that want to restrict the number of off-site tasting rooms that can open in the small communities through out wine country.

Link to the proposed law: