On Wisconsin! Governor Bucks Trend, Wholesalers
Posted by Matthew Mann on October 29th, 2007Wisconsin Governor Doyle’s veto of several provisions of the state budget bill which would have repealed reciprocity, put in place a direct shipping permit system and virtually restricted all wine sold in the state to the control of wholesalers bucks a recent trend towards legislatures’ using omnibus legislation to sneak in laws favoring large, monied interests over smaller entrepreneurs and powerless consumers. A direct shipping permit system is a desirable goal, but the legislation was clearly written to favor the state wholesalers, codifying the elimination of self-distribution by state wineries selling direct to other licensees or permittees. This would have had a chilling effect on small wineries with no other way to distribute their product. As indicated in the Governor’s message in vetoeing the offending sections of the bill, permitting the language to remain would have had “stifling economic effects on small wineries around the state,” and because he objected to the “inclusion of policy of this nature in a budget bill,…”
Here is an excerpt of the Governor’s veto message:
These provisions replace the current law distribution system for wine with a three-tier distribution system which requires the sale of wine through a wholesaler in most cases. The provisions also create a “direct wine shipper’s permit” that authorizes holders to ship wine directly to individuals of legal drinking age. Each individual may receive up to 108 liters of wine in a year and may not resell the wine. …I am vetoing sections (omitted)…because I object to the inclusion of policy of this nature in a budget bill. While the changes to the distribution system included in these sections may help address some concerns with sales of alcohol to minors, they also may have stifling economic effects on the small wineries around the state, forcing them out of business. Also, I strongly object to permitting free shots of alcohol to be distributed in places such as grocery stores. While I am vetoing these provisions, I support the concept of a three-tier distribution system. The language included in the bill, however, does not adequately address the needs of small entrepreneurial wineries. Therefore, I am directing the appropriate agency secretaries to begin immediately to work with the Legislature to adopt a new version of this proposal that provides a workable and equitable approach that meets the intent of the three-tier distribution system while supporting new and small businesses.
Slipping legislation with restrictive language or onerous provisions seems more and more to be a tactic of the wholesaler lobby. The thinking is that such relatively minor issues such as the interstate direct shipment of wine pales in comparison to the larger issues usually found in a budget bill: education, healtcare, resource conservation and economic stimulation. Certainly no Governor would risk holding up important funding legislation over such an esoteric concern. But unlike some states, Wisconsin allows for a line-item or “Frankenstein” veto, as one paper called it. This permitted to the Governor to strike down the provision in the interests of the economic health of the state. The Governor correctly expressed his support for the three-tier system and the regulatory and revenue benefits it provides but also correctly expressed concern about the one-sidedness of the law in virtually eliminating distribution except through wholesalers. He also correctly directed state agencies to address the situation through the Legislature to adopt a more equitable and workable situation balancing the three-tier system and the need to support the fledgling Wisconsin wine industry. On Wisconsin!
