Bottleneckers. William Mellor
Читать онлайн книгу.
arguments, finding that “the direct shipping ban was designed to protect New York State businesses from out-of-state competition.”72 He also reasoned that the state had “not established that its goals [could not] be accomplished in a nondiscriminatory manner.”73
Not surprisingly, the bottleneckers quickly appealed, and on February 12, 2004, the Second US Circuit Court of Appeals sided with the distributors, on the basis that “all wineries, whether in-state or out-of-state, are permitted to obtain a license as long as the winery establishes a physical presence in the state.”74 Although this was consistent with the text of the law, the actual effect of upholding the direct sales ban was to discriminate against out-of-state businesses—particularly smaller ones—in favor of in-state distributors. Juanita and David would have had to open and fully staff a warehouse just to sell a small number of cases of wine in New York—an economic impossibility.75 Their next step was the US Supreme Court.
As attorneys for both sides prepared their briefs for the hearing, the bottleneckers and their allies continued their drumbeat about protecting public safety, particularly the dangers of underage drinking that would take place if the three-tier system were to be disrupted. John Fitzpatrick, a spokesman for the WSWA, warned, “As a society we need to be thinking about ways to make it harder for children to get alcohol, not easier.”76 His organization called Juanita an “elite” member of a “special interest” trying to facilitate underage drinking for financial gain.77 The attorneys general of some states even launched high-profile sting operations, ostensibly designed to demonstrate how easy it was for underage buyers to access alcohol. Revealingly, the sting artists never successfully ordered from wineries; they did, however, manage to order from retailers, which were licensed by the three-tier system.78
In the end, the bottleneckers’ efforts were for naught. On May 16, 2005, the Supreme Court decided 5–4 to strike down the laws on grounds of discrimination. Justice Anthony Kennedy, writing for the majority, held that the laws’ effect was to “allow in-state wineries to sell wine directly to consumers in that state but to prohibit out-of-state wineries from doing so, or, at the least, to make direct sales impractical from an economic standpoint.”79 The court ruled that laws such as New York’s “depriv[ed] citizens of their right to have access to the markets of other States on equal terms.”80 The court also dismissed the assertions about underage access to alcohol, finding that less onerous alternatives were available to serve legitimate state interests. Indeed, a state official in Georgia, which at the time already allowed shipments from out-of-state wineries, added that the Peach State had regulations in place to discourage purchases by minors.81
A key element in the court’s decision was the fact that the bottleneckers were unable to demonstrate compelling reasons for the law to stay in place, even after they had been asked to give specific examples of such reasons. Moreover, Justice Antonin Scalia pointed out that the fact that twenty-six states currently allowed direct shipment from out-of-state wineries “certainly suggests that what [the state] is arguing is not essential to the state’s enforcement of its alcohol laws.”82
THE BOTTLENECKERS STRIKE BACK
The Supreme Court’s decision was called “landmark”83 and a “pivotal moment in the long history of alcohol.”84 Although the court did not speak directly to the efficacy of the three-tier system, the ruling had a significant-enough effect on bottleneckers that they initiated efforts in state legislatures and the US Congress to nullify the high court’s decision and protect their position.
One approach taken by the bottleneckers was to lobby states to limit all direct shipping, from both in-state and out-of-state producers.85 This would apply in cases such as that of Michigan, whose variation on a total ban had been to prohibit commercial carriers such as FedEx and UPS from shipping wine. This meant that wine retailers must use their own vehicles to deliver product to Michigan residents, effectively closing Michigan to out-of-state retailers.86 Another approach of the bottleneckers was to seek onerous permitting systems with expensive fees to ship into the state in order to discourage out-of-state producers, particularly small ones, from shipping directly to consumers.87
At the federal level, distributors’ lobbyists responded to the 2005 Supreme Court decision by turning to Congress for a ban on direct shipping of wine and other forms of alcohol. Their effort was embodied in a bill put forth by Utah representative Jason Chaffetz titled the Community Alcohol Regulatory Effectiveness Act of 2011, or CARE, which was similar to legislation previously proposed by Massachusetts representative William Delahunt.88 Support for the act came primarily from alcohol distributors, which, through their PACs, had donated generously to those assisting their cause.89 In the decade since the Supreme Court decision, CARE’s nine sponsors have accepted more than $312,500 from the NBWA and $181,735 from the WSWA.90 And those nine lawmakers are not alone. According to an analysis by the National Association of Wine Retailers, wholesalers spent more than $80 million in contributions to state and federal legislators and on federal lobbying between 2005 and 2010.91
The bottleneckers also continue to defend their economic advantage against possible threats. In 2006, Costco sued Washington State for the right to stock its shelves with alcohol without going through distributors. As in similar cases throughout the country,92 distributors intervened in support of the law, and the court ultimately rejected Costco’s claims. Rather than appealing to the Supreme Court, Costco took its battle to the people with two ballot initiatives in 2010.93 Voters rejected both initiatives after being bombarded by advertising campaigns funded mostly by distributors. Whereas the campaign supporting the ballot initiatives collected donations from Costco, supermarkets, and others, amounting to a total of $2.28 million, opponents of the initiatives outspent supporters by almost a three-to-one margin, collecting a total of $6.1 million. Of this amount, $1.1 million came from the Washington Beer & Wine Distributors Association (WBWDA), $2 million came from the NBWA, and $2 million came from the Beer Institute, and there were contributions from distributor organizations in other states as well.94 Undeterred, supporters of the ballot initiatives returned in 2011 with another initiative, eventually achieving voter approval after substantial spending by Costco.95
In 2011, another example took place in North Carolina, where the grocery store chain Harris Teeter partnered with a large wine producer to offer an online service allowing customers to view past purchases and receive recommendations, which would have required a three-tier exemption. Distributors vigorously opposed the exemption, and the store eventually withdrew its application.96
Down the road from North Carolina, a 2014 Florida Senate bill created a “beer war.”97 In April of that year, lawmakers had adopted a bill to legalize half-gallon “growlers.”98 In the days before the bottling, canning, and wide distribution of alcohol, local establishments sold fresh beer to consumers, who transported the product to their homes in small galvanized pails called growlers, allegedly named on the basis of the sound they made as carbon dioxide escaped through the lid.99 With the advent of bottling and canning, growlers fell out of fashion, but they have seen a resurgence in recent years with the explosion of craft breweries and home brewing.100 Ever vigilant, distributors saw growlers’ popularity as a threat. If consumers could buy directly from producers, they estimated, the distributors would be cut out. To appease distributors, the Florida Senate bill contained a compromise: Breweries that produced more than two thousand kegs of beer per year had to sell all bottled or canned beer to a distributor—and then buy it back at a markup—before serving it in their own tasting rooms. As the owner of one brewery saw it, the bill would accomplish nothing beyond transferring $175,000 from his bank account to the bank account of a local distributor.101
The Senate bill, and a companion measure in the House,102 created a tidal wave of efforts to influence legislators’ votes. Senator Jack Latvala, a Republican from western Florida, said he received more feedback about the bill than he had about any other piece of legislation in the session.103 And when the House introduced its companion bill, one representative observed, “I have never seen this amount of lobbying on anything as much as this issue since I have been