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Eric Arnold's Blog

Editorial director of Bottlenotes. Author of First Big Crush. Babbles endlessly about New Zealand wine, outrageous Bordeaux prices.


Jan 13, 2011
Good Conversation
This wine-shipping debate won't drive you to drink.



Is America entering a new era in which ideaological oppononets rise above the rhetoric and sit down at the negotiating table to hammer out their differences in lieu of pointed media and political attacks? Probably not. At least, though, there was a sign of such progress in the wine world yesterday, when two key adversaries in the trench warfare over HR 5034--the wholesaler-backed bill introduced last year that wineries, wine retailers and consumers widely oppose, which may or may not work its way onto the legislative agenda in the new Congress--conducted a civil, interesting conversation that was released on the web. It's worth listening to here.

The interview was conducted by Paul Mabray of Vintank, a consulting firm to wineries, and Craig Wolf, CEO of the Wine & Spirits Wholesalers of America. Vintank previously conducted a video interview with a fake Craig Wolf, represented by a lazy-eyed Muppet. And the real Wolf, in yesterday's interview, was remarkably good-humored about having been represented as such.

That alone speaks volumes, and I've met and interviewed Wolf a couple times myself; I've found him to be likable, charming and intelligent. But so are many politicians and, make no mistake, Wolf is definitely a sauve, skilled one at that. This is what makes the first half of the Vintank interview so remarkable--I found myself nodding my head in agreement with Wolf. I suddenly felt as though HR 5034 is a relatively well-meaning piece of legislation: Yes, the states do have the right to enforce their own alcohol laws, as the 21st Amendment to the Constitution lays out. The three-tier system can be a very good thing.

Before I got too sucked in, Mabray smartly pointed out that the wholesalers command more lobbying power than consumers or wineries do, so the courts are really the only place they have to turn when a state legislature bows to the wholesalers' will (HR 5034 would make it virtually impossible for wineries, retailers or consumers to sue if they feel their business are threatened). But Wolf is ultimately correct in arguing that legislators are elected by the people; if the people don't like the laws their elected officials pass and enact, the people can and should vote differently in the next election. Why make wine-shipping the decision of a judge or series of judges up and down the crowded court system?

But around the 15-minute mark of the interview, Wolf can't help but revert to the age-old argument of his constituents--and this is where his position falls apart (and also the point at which I doused myself with a bucket of cold water...and ordered six bottles of wine from a retailer in California). Wolf says that the problem isn't the existing regulations or the exisitng wine marketplace, but the regulations that don't exist or currently cannot nip unforeseen problems in the bud--such as the result of an underage drinker's access to alcohol. Specifically, what do you do about the teenager who potentially gets his hands on a bottle of vodka that was purchased online, then gets in his car and kills some people on the highway?

The problem with the argument is that you really can't do anything about this. At all. No civilized, free-market country can (until we have something akin to the automatic cars and highway systems in Minority Report or the Johnny Cabs of Total Recall...yes, I just referenced two very bad movies). I'm not a libertarian per se, but I also don't think anyone in America lives under the illusion that more regulation is always the right move. Just look at the world of finance: We have more regulation now than ever, yet unemployment is still high, the wealth gap is widening, Wall Street bonuses are still big and a home mortgage is about as easy to get as a bottle of Barolo in Applebee's. Sure, you can argue that there are plenty of broken sectors where existing regulation isn't working, so it makes sense to overhaul those systems, top to bottom--just as with Obamacare, immigration reform or with green energy.

Wolf does point out that his main interest isn't so much keeping the bottle of vodka out of the teenager's hands (he or she who truly wants it will find a way to get it), as it is making sure that the distribution system continues to do its best or improve its efforts to prevent that from happening. Because, when it does, the public will be quick to blame the system that let such a thing happen. It's a fair point and a valid concern, but it ultimately doesn't ring true. For instance, alcohol-related deaths in America each year far eclipse the number of gun deaths, and have for a long time. Yet no one--other than the wholesalers--seems to be screaming for more alcohol regulation or restrictive laws on the books.

Nevertheless, there was a bright spot in this interview that I wish Wolf and Mabray had explored further, which was Wolf's mentioning that the WSWA is working with Boulder, Colo.-based software and logistics company ShipCompliant to create an online forum that will connect small wineries and small wholesaler/distributors. The idea is that if there's a place where the two can find each other and work together, the better the chance that wine will pass through the three-tier system safely and legally, and that consumer choice will improve. Most importantly, though, such a marketplace--if it comes to fruition--has the potential to effectively turn down the volume on both the wholesalers' rhetoric about the dangers of direct-to-consumer wine shipping, as well as the retailers' and wineries argument that the consolidated distributor environment is too big for the little guys to get noticed and/or grow their businesses.

This is just the type of idea on which the WSWA should be concentrating its time and efforts--and I'm encouraged by it. My hope is that it's successful enough that Wolf and the WSWA can focus more on business-building innovations such as this, maybe even in partnership with people like Mabray, and less on lobbying for excessive regulation no one but the wholesalers seem to need or want (even the Distilled Sprits Council of the U.S. opposes HR 5034). From the congenial tone of the Wolf-Mabray interview, you never know; this just might be the first step toward a civil, progressive discourse--not to mention an array of solutions that serve to increase consumer choice as well as enforce existing laws. And there's much to be said for achievements realized by opposing forces far beyond the walls of a courtroom or Congress.




Tags: Vintank, Craig Wolf, HR 5034, wine, wine shipping, underage drinking


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