Looming Political Influence of Alcohol Wholesalers Illuminated in Staggering SWRA Study
July 15, 2011, by: Lisa Duff Khajavi
On July 12 the Specialty Wine Retailers Association (SWRA) released a report—Toward Liquor Domination—about the alcohol wholesalers and their political spending habits. The figures are astonishing—since 2006 the wholesalers have spent more than $82 million dollars on campaign contributions at the state and federal level, as well as federal lobbying, dominating by a huge margin what is spent by the rest of the liquor industry.
The study covers the time period from 2005 to 2010, and details the enormous amount of money spent to keep wholesaler influence intact at both the federal and states levels to insure policies that protect the wholesalers’ interests.
According to the report at both the state and federal level, the wholesalers have spent nearly double since 2006 compared to the rest of the alcohol industry combined on political campaigns. On the state level alone, alcohol wholesalers have spent almost $60 million for campaign contributions since 2006. This is nearly double what wineries, distilleries, breweries and wine retailers have contributed all together.
There are many protectionist measures in place outlined in the report such as franchise laws, which prohibit alcohol producers from firing their wholesaler and hiring a new one; bans on self distribution, which prohibit local producers from selling and delivering their products to retailers and restaurants, even if they are right down the street; producer-to-consumer direct shipping bans, which prevent consumers from ordering alcohol directly from producers; and retailer-to-consumer direct shipping bans, which prohibit consumers from ordering from retail shops.
Reading the entire report brings to light just how much money is at stake—which also cited the 2009 Forbes Magazine estimate that the top five wine and spirit wholesalers produced $22.65 billion in revenue and M. Shanken’s IMPACT Newsletter estimate in 2010 that the top six American wine and spirit wholesales control just over 50% of the entire national wholesaler marketplace.
This all re-inforces how and why HR1161( formerly HR 5034) came about, which if passed would increase already enormous revenues to a small group of very large and powerful companies. What does that mean for wine lovers? Ultimately we will pay more (it is estimated that consumers pay 18 to 25% more in retail wine stores because of wholesalers), and have less access to new wines and be limited to the wines that the wholesalers choose to carry.
Montesquieu Winery supports a free market, where wine lovers can purchase wine from retailers and wineries of their choice, wherever they may be!
We encourage wine lovers to stay tuned as we will continue to keep you informed.
About Specialty Wine Retailers Association(SWRA)
SWRA is a national organization of wine retailers, associated businesses and supporters of fair trade that seek a well-regulated and fair market for the sale and distribution of wine. For more information: http://www.specialtywineretailers.org