Pending legislation - HR 1161 - C.A.R.E. ACT

For businesses in the wine-making industry and related service providers, this bill could dramatically impact the business economics for wineries, particularly small wineries.  It is interesting to examine the choice of names for a proposed bill and compare the stated purpose with the groups supporting the legislation.  In this case, HR 1161, the C.A.R.E. Act, is a noble acronym that for the "Community Alcohol Regulatory Effectiveness Act of 2011" and is an amendment to the legislation approved in 1913, "Webb-Kenyon Act".

Gosh, everyone wants "effective" regulation. It is curious to see beer and spirit distribution associations aligned for more regulation.  The alignment with the Neo-Prohibitionists even adds to the drama.  If this is a "support" item for the distribution business, then the obvious question is identifying the group taking the "oppose" position.  Members of the Senate and House have taken positions on this legislation.

It sure looks to me like the distributors have a economic interest in preserving the existing distribution network.  The distributors have existing warehouses, a sales-book of available product, marketing effort associated with keeping their hands on the flow of product from the winery to the consumer.  Right now, it appears the distribution community fights a brush war in each state.  With this legislation, they can confine the legal arguments to over-turn state-level regulation.  A representative of the wine industry summarized the situation:  "This bill would allow them [supporters] to work the state legislatures to pass anti-competitve bills and we [wine producers] would have no legal recourse to overturn them."

 

In my opinion, the C.A.R.E. Act will most likely have an adverse impact on the small wine-maker, which are the folks that rely heavily on direct sales to the consumer.

In recent history, HR 1161 is mostly a rehash of HR 5034 from the prior session of Congress.

Questionable legislation needs to be exposed to the glaring light of day. It would be helpful for the general economic health of small agricultural businesses to have a united front opposing legislation like HR 1161.

For reference, I have gathered documents that include the actual bill and commentaries by a number of interested parties.