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Liquor wholesalers seek limits on interstate sales

Sun., Aug. 15, 2010

WASHINGTON – With little public notice, distributors of alcoholic beverages are pressing for a federal law that would allow states to block interstate sales of wine and beer to their residents – a result that could limit consumer choices, raise prices and hurt hundreds of small vintners and microbrewers.

A bill pending in the House would put the authority to regulate alcohol more squarely in the hands of the states and would require those challenging the regulations to prove the rules violate federal law or the Constitution.

And it would supersede a number of recent court rulings that have struck down limits on interstate sales of alcoholic beverages.

“It’s the cumulative effect of all these lawsuits, and the confusion,” said Paul Pisano, a vice president at the National Beer Wholesalers Association, which proposed the legislation in the spring and backs a lobbying campaign. “We’re asking to make sure that states aren’t having their hands tied when they’re trying to defend their alcohol laws.”

Critics countered that the distributors’ real motive was to restrict competition.

Internet and direct-mail sales have become essential to the growth of smaller winemakers and microbrewers in the last decade.

Through consolidation in recent years, many markets are controlled by only a handful of high-volume distributors, and they have little incentive, critics contend, to carry wines and beers available only in small quantities.

As they grew through mergers and acquisitions, wholesalers and distributors lobbied states for laws that would in effect block interstate sales. But federal courts have struck down some of those laws - prompting the companies to turn to Congress.

They argue that direct sales pose a threat to public health and enable minors to buy alcohol. But critics scoff at such claims, saying that few minors seeking alcohol are likely to order more expensive craft beers and wines from faraway states.

So far, beer and wine lovers in 37 states and the District of Columbia enjoy some form of direct-to-consumer shipping. Liquor makers also have weighed in, arguing that the bill could go beyond direct shipping by allowing states to enact laws relating to taxes, advertising and labeling.


 

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