Are Small Wineries in Danger? Craig Wolf Discusses HR 5034, Consumer Choice, Dangers to Children and More
By Evan Dawson, Managing Editor
If you care, even a little, about New York State wines, you need to follow the developments of HR 5034, a bill that Congress could address this year.There is already a wealth of background reporting on the bill, but we'll sum up the bill this way: It's written by the wholesalers and small wine producers are concerned that it could destroy their business by eventually making it illegal for consumers to get wine directly from the winery.
Want to buy wine from California? Opponents of the bill fear it won't be that easy if HR 5034 passes.
Our friends at Vintank in Napa have done a great service by interviewing Craig Wolf, president of Wine and Spirits Wholesalers of America. I urge you to listen to the whole thing.
Here are my quick takes:
- Wolf and wholesalers think wine drinkers have enough choice already. We don't need to worry about losing small producers because we have so damn much choice as it is! Compare wine to other interests and we should just be satisfied with the market even if we lose some wines. I'm not sure what constitutes enough choice, but apparently we're already there.
- Wolf says wholesalers are looking for ways to get more small producers to hook up with small wholesalers. Problem is, HR 5034 could hurt the little guys before they can make such a link. It's backward. One would assume that if WSWA were concerned about the health of small wine producers, they would create these partnerships before pushing for legislation that might threaten their livelihood. (And by the way, there are plenty of small wine producers who have no interest in changing the way they interact with customers.)
- Wolf admits that when it comes to kids buying alcohol, wine isn't the problem. This has been a consistent canard trotted out in this debate — it's for the children! He concedes the point that minors in Ohio aren't ordering Heart & Hands Pinot through the mail directly, yet he thinks wine should be grouped in with beer and spirits just the same in new legislation.
Would it be more accurate to say “some wholesalers”?
Rick - Yeah, it probably would. Fair point.
Care to weigh in with other thoughts on the Mabray / Wolf conversation?
The “protecting our kids” argument is, to me, the most insidious. It’s fear-mongering, throws our children unfairly into the cross-hairs of the debate, and (most infuriating to those who have been following this stuff) the data behind the claims actually supports the case for allowing direct shipping.
…sigh…
Craig Wolf talks about the 21st ammendment, which gives the states the right to regulate alcohol. He left out the Commerce Clause, Article 1, Section 9 in which the government is prohibited from making any laws that impede interstate commerce. This was at the heart of the debate over interstate shipping. I found it intersting that he mentioned that the state of VA checks UPS and Fed Ex logs and sees a lot of shipments from ” non licensed individuals,uh, companies..” Then he goes on to say that opening the door to shipping will create a shadow market. He further states that he’s not worried about wineries who follow the law- just those that don’t and the shipping of hard alcohol. Craig goes on to say that kids (under 21) would be just as likely to ship Thunderbird as a $100 Chardonnay. Having read the whole transcription I have a number of responses:
1. VA checks the logs of UPS and Fed Ex. Yes- and what does he think they do with the info? Just sit around and say, “Gee, I see the Idiot Winery in X illegally shipped wine?” VA is going to go after the person who ships illegally and impose some pretty big fines- a source of revenue doing these hard times.
If any winery ships illegally we can loose our license and be put out of business. Enough said.
2.Some states, like New Hampshire, send lists of approved (licensed) wineries to their licesed carriers. The carriers check to make sure the wine is from a licensed supplier. Ship compliant is able to verify the age of the receipient. Are we all to be punished because some people abuse the system? Should wineries be penalized because somebody might ship Vodka??? When did we become a police state. This is nonsense.
3. Kids might ship Thunderbird. Is he serious?? Anyone under 21 who wants to drink will usually get someone over 21 to buy it. They want it for the party they are having that night, not for 2 weeks later and $20 extra for the shipping.
The real issue with HR 5034 is that wholesalers don’t want to lose their grip on suppliers. When a winery sells to a wholesaler, the wine is sold at 50% of retail. It’s not rocket science. For a small supplier, direct sales are far more profitable. Also,
small producers cannot possibly keep up with the price cutting and salesmen incentives given by the large producers. Millenials are the up and coming wine consumers and they are technically adept. The means of marketing have changed. Social media is now a major source of reaching out. The older means of promotion- print advertising, radio, etc. are declining while social media is growing in leaps and bounds. The times are changing- embrace the change and buy locally!
Evan,
Thank you for posting this.
Joyce,
Well said.
In the end it is not Mr. Wolf that needs to be convinced but our representatives in Congress. Mr. Wolf and his colleagues are doing the best they can to buttress their businesses. It is inconvenient to our industry. So the more important question is what are we doing about it? Who is providing leadership?
A letter writing and phone campaign should be taking place. I will write a letter to our rep Tim Bishop.
I have had several conversations on this issue with our rep Tim Bishop who was one of the cosigners of this bill last year. He has assured me that he would not do anything that would harm the local wine industry. Our industry needs to keep him informed of the negative impact this bill will have on local wineries. Call him. Write him.
In case anyone is interested. There is “Stop HR 5034″ organization that is coordinating efforts.
http://www.stophr5034.org/
http://www.facebook.com/STOPHR5034
Thanks, Hughesbrown. I noticed under “supporters of HR 5034 there is one rep. from NY and several from Ohio. Time to get in touch with Donnie Winchell.
Is there really a problem with shipping vodka? Isn’t this the same canard about kids ordering booze online when they are much more likely to gain access from a local store. While I appreciate the concerns of small wineries I think retailers have the most to lose from HR 5034. To take Mr Wolf at face value he says that the battle is over for winery shipping and he accepts the status quo. What he doesn’t want is to lose any more ground which I interpret to mean retailers shipping legally into other states, even though those retailers most likely bought their wine from a wholesaler.