What is H.R. 1161
A bill introduced into the House of Representatives, House Resolution 1161, if enacted by Congress, would give states the ability to pass discriminatory wine shipping bans and other anti-free market legislation without consequence of court challenge if the laws are discriminatory or protectionist. The proposed law would reverse the effect of the 2005 Granholm v. Heald Supreme Court decision that declared states must treat in-state and out-of-state wine shippers equally. The landmark Granholm decision and subsequent court decisions based on it has led to a robust market in fine wine across the country, provided the means for small, family-owned wineries to compete, spurred a flourishing of licensed and regulated specialty wine retailers to serve consumers, and gave consumers access entire market for fine wine.
Which Members of Congress Support H.R. 1161
The Current list of Congressional Co-Sponsors
How Does H.R. 1161 Allow Discriminatory and Protectionist State Wine Laws?
Most important for wine retailers, wine auction houses, and wine of the month clubs, H.R. 1161 strips these types of company’s of their crucial protection from state-based discrimination promised by the Commerce Clause of the Constitution and the principle of the Dormant Commerce Clause. Unless Congress says otherwise, states many NOT regulate inter-state commerce. HR. 1161 specifically states that the commerce clause will no longer apply to wine retailing. This radical move of Congress stripping an entire industry of its protection against state-based discrimination of inter-state commerce has only happened once before in the country’s 220+ year history. Wineries too would be subject to many types of discriminatory state laws that previously have been ruled unconstitutional and, when passed, would severely limit consumers access to wine shipments from domestic wineries.
What is the Reason Given for Taking Such Radical Steps Against America’s Wine Retailers?
To-date, proponents of stripping wine retailers of their Constitutional protection against discriminatory state laws have given no explanation as to why such a radical step ought to be taken. However, it should be noted that wine middlemen, wholesalers, which operate on a state-by-state basis, make no money when consumers choose to have wine shipped to them from out of state wine stores when they can not find what they want at their local store. Importantly, if HR 1161 passes and more states pass discriminatory laws banning wine shipment from out of state retailers, consumers in those states will have NO access to any foreign wines via direct shipping since it is only retailers that sell French, German, Italian, Australian and other non-domestic wines.
Who Is Pushing H.R. 1161
H.R. 1161 was written by the National Beer Wholesalers Association (NBWA) with support form the Wine & Spirit Wholesalers Associations (WSWA). H.R. 1161 was not demanded by state alcohol regulators, state Attorneys General nor state politicians—it was the idea of wholesalers to create a law that would only serve to inhibit consumer choice and stifle the American market for wine, beer and spirits. NBWA and WSWA are two of the most powerful lobbying organizations in America and represent ONLY the interests of middlemen, not the state, not wineries, not retailers and certainly not consumers. Both these organizations have opposed wine shipping and have worked tirelessly to create regulations and laws that guarantee alcohol wholesalers get a cut of every bottle of wine, beer and spirits sold in America—whether their services as middlemen are needed or not.
What do the Alcohol Wholesalers Claim about H.R 1161
They claim their motive is to keep alcohol regulatory powers in the hands of states, prevent lawsuits challenging state regulations, and to prevent deregulation. Yet the only real deregulation that has occurred in the past 20 years is allowing direct shipping of wine to consumers, and even laws allowing direct shipping of wine from wineries and retailers occurs in a highly regulated environment where taxes are paid, reports filed with states, permits issued and paid for and with the delivery of wine occurring only after an adult signature has been obtained. However, when wine is shipped to directly to consumers, wholesalers don’t make a dime.
Why are Wholesalers Opposed to Court Challenges of State Alcohol Laws And Claim They Are a Nuisance?
They aren’t, despite what they claim. Wholesalers are opposed to court challenges of state alcohol laws when the outcome of those court challenges don’t suit them. Wholesalers did not stand up against court challenges brought by wholesalers in the case of “Southern Wine & Spirits v. Steen” in 2007 when a large wine and spirit wholesaler challenged a Texas law that required residency in the state before a wholesaler could get a license to do business there. The wholesalers are hypocrites on this issue. Nor did wholesalers protest when there own sued the state of Kansas and Indiana over laws they didn’t like. Wholesalers LOVE lawsuits, when the outcome serves them. Their claims that lawsuits aim to dismantle the state alcohol laws are self serving lies.
Why Do Alcohol Wholesalers REALLY support H.R. 1161?
If passed, wholesalers will be able to use their enormous power in state legislatures to craft anti-wine shipping legislation and other laws that ignore the important principles of the Commerce Clause of the Constitution that will protect them from competition via direct shipment from wineries and retailers to consumers. They will be able to completely control what wines consumers may purchase, taking choice away from the consumer. H.R. 1161 is the most audacious power grab and wholesaler protection bill ever introduced into Congress.
What About the Supreme Court Decision that Allowed Direct Shipping?
In 2005, in Granholm V. Heald, the Supreme Court said a state has wide power in regulating direct shipment of wine. But, they said that a state must treat in-state and out-of-state shippers equally. A state may not allow wine shipments from within the state but ban out of state shipments of wine. The Supreme Court said that states were unable to demonstrate that there were no other less discriminatory ways to promote temperance, collect taxes and create an orderly market for alcohol. So, the states’ bans on direct shipping from out-of state retailers and wineries were deemed unconstitutional.
H.R. 5034 would effectively abolish the principles of non-discrimination in this Supreme Court decision and give states the ability to pass discriminatory and protectionist direct shipping bans that could not be challenged in court.
What Can You Do To help Stop H.R. 1161?
Send a message to your congressional representative telling them to oppose H.R. 1161
Sign up for regular updates on the status of H.R. 1161 and Join the Movement
Join the STOP HR1161 Facebook page
Make Your Voice Heard on HR 1161 at this important online polling site.
Who Is Responsible for this STOP1161.ORG website
The Stop 1161 website is maintained by the Specialty Wine Retailers Association, a national organization of progressive wine retailers who actively promote free and fair trade in wine and work to allow retailers and consumers to legal do business with one another via well regulated interstate shipping. For information about Specialty Wine Retailers Association or this website contact Tom Wark, executive director of Specialty Wine Retailers Association.