Groups Call Alcohol Regulation Bill “An Affront to Consumer Freedom”

Full Document Available in PDF

Washington, D.C., July 27, 2010 — Today a coalition of nonprofit and consumer groups sent a letter to Congress expressing concerns about H.R. 5034, the Comprehensive Alcohol Regulatory Effectiveness (CARE), a bill that would give states unprecedented, unwarranted powers to regulate wine in interstate commerce.
The letter to Congress, organized by the D.C.-based Competitive Enterprise Institute and signed by 42 organizations, calls the bill “an affront to consumer freedom.”

“H.R. 5034 undercuts basic constitutional principles to serve a single special interest.  Should lawmakers proceed with this legislation, consumers, small businesses, and our constitutional system will suffer,” the letter reads.  

The letter addresses legislation that would empower states to ignore the Commerce Clause of the United States Constitution, as well as a number of other federal laws — including anti-trust laws.  States could then impose a host of protectionist regulations that impede interstate commerce to serve special interests within their states.  These regulations could impede direct shipping of wine to consumers, create a patchwork of labeling and product formulation mandates, impose discriminatory tax policies, and more. 

The bill is largely supported by wholesalers of beer, wine and spirits who seek to protect the “three-tier system” in which they serve as middlemen between breweries, wineries, and distilleries and retailers.  “Wholesalers fear that if states continue to allow direct-to-consumer sales, they might eventually allow retailers to buy direct as well, reducing wholesaler profits,” explains CEI’s Angela Logomasini.  “While wholesalers play an important role in the distribution process,” she notes, “they should have to compete like everyone else for their place in the market rather than gain it by regulatory fiat.”

Consumers have expressed concern via a Facebook group and website called Stop HR 5034, while all the  wine, beer, and spirits producers and importers trade associations have sent letters to the Hill expressing their opposition to the legislation.  “CEI’s coalition letter informs members of Congress that nonprofits and consumer-focused organizations view H.R. 5034 as a serious assault on consumer freedom,” explained Logomasini.