TOM WARK TALKS RETAILER SHIPPING RIGHTS, PART II
WSD had the chance to talk with Tom Wark, director of the Specialty Wine Retailers Association (SWRA) last week. To check out Part One of the interview, click here. Otherwise, kick back and enjoy Part Two as you, dear reader, are a fly on the wall.
WSD: From what I understand, wholesalers say Granholm focuses on product-based discrimination. In other words, states can’t discriminate against a producer based on where the product is coming from; however, geography alone cannot create discrimination, such as in the case of out-of-state retailers.
TW: Well, that’s just simply wrong. Granholm is very, very clear. They’re arguing that as long as the supply of wine comes from an in-state wholesaler anyone’s able to ship to a consumer, and he’s talking about residency requirements that have recently been struck down.
WSD: Okay. So you guys have other litigation you’re dealing with right now such as Texas and California? How is that going?
TW: In 2005, California passed a law very similar to Illinois, again at the behest of wholesalers. Basically California changed from its reciprocity system to a permit system. The way the bill was originally written, out-of- state wineries and out-of-state retailers would have been allowed to get a permit to ship into California. Wholesalers insisted that retailers be struck out of that, and that’s how the bill passed.
SWRA immediately sued the California and we got an agreement with the California ABC not to enforce the new law against out-of-state retailers for a period of two years during which time SWRA would pursue a new law that basically allowed out-of-state retailers to ship into California. We’ve already had a hearing in the California senate and we’re moving toward getting a law passed in ’08 that will codify retailers being able to ship into the state on the same terms that wineries are able to ship into the state.
Texas passed a law, of course, that prohibited out-of-state retailers from shipping into Texas while still allowing Texas retailers to ship to Texas. We sued them. We’ve gotten through all of our briefs and we’ll be having oral arguments on summary judgment on September 21st. That was a really interesting case, Megan, because right in the midst of that whole case being worked through, Texas wholesalers pushed through a new law in Texas which essentially leveled it down. Now in Texas, according to SB 1229, a Texas retailer may only ship wine to a consumer who resides in the county where that store resides. And it’s quite clear why they passed that law. They were afraid that we were going to win our lawsuit and so they were trying to protect themselves through a cynical leveling down provision. And now Texans basically can’t get any wine shipped to them that exists outside the county in which they live. This answers the question, do wholesalers ever have consumers' interests at heart.
WSD: Are things looking good in Texas, or is that a state that the SWRA is a little more worried about?
TW: We believe our arguments are stellar. The issue is how the judge will treat the new law as related to our lawsuit.
WSD: Right. Okay. And what other states are you guys fighting in right now?
TW: Those are the only two states in which we have litigation going on right now, California and Texas. Beyond that, we’re doing is a lot of consumer outreach. We’re also working closely with a variety of different state regulatory bodies to clear up confusions in a variety of different laws. So, for example, Missouri just changed from reciprocity over to a permit system but they left reciprocity in place for retailers. And then they were under the mistaken assumption that there was no reciprocity states left in America for retailers, so they stated in their newly issued rules that no retailers from out of state can ship into Missouri. But of course California remains a reciprocal state for retailers as does New Mexico. So we do that sort of work too. Our job basically is to work on behalf of retailers across the country and consumers to make sure they have access to the wines that they want.
WSD: What do Specialty Retailers see as their biggest threat right now?
TW: The biggest threat that we see right now to consumer rights is most certainly wholesalers who are trying to hang on to an outdated system that simply does not work for the 21st century. Consumers have every expectation that they’ll be able to go online and purchase the wines they want. States have numerous controls for collecting taxes, for keeping the market orderly, but wholesalers are trying to hang onto a system that was built to their advantage over 75 years ago. And as a result of that system they have enormous power in the state legislature. I mean, wholesalers donated $5.4 million since 2000 to the Illinois legislature. And there’s no one else who can compete with that. Who wouldn’t love to have a monopoly on sales? I mean, I can see why the wholesalers want to protect that, but it’s not good for consumers and it’s not good for retailers.
Specialty Wine Retailers is growing. As a national organization we’re becoming more and more powerful with more and more clout. And I think one of our biggest assets is consumers who love wine. They’re looking for someone who’s going to represent them in these battles, someone who’s always going to stand up for them no matter what. And I think Specialty Wine Retailers is probably the only organization out there that’s actually willing to take action on behalf of consumers, the only organization.
Consumers need an advocate out there. They need an advocate who’s going to stand up for them and say you should be able to obtain the wine that you want to obtain without being obstructed by any number of different obstacles. We’re going to be the ones who stand up for consumers and we’re going to fight for their rights. We are going to stand up for retailers' rights. We’re going to sue where we have to and we’re going to lobby where we have to. By the time we’re done consumers are going to have a right to buy the wine they want.
WSD: Thanks again Tom for speaking with us.
WSD: From what I understand, wholesalers say Granholm focuses on product-based discrimination. In other words, states can’t discriminate against a producer based on where the product is coming from; however, geography alone cannot create discrimination, such as in the case of out-of-state retailers.
TW: Well, that’s just simply wrong. Granholm is very, very clear. They’re arguing that as long as the supply of wine comes from an in-state wholesaler anyone’s able to ship to a consumer, and he’s talking about residency requirements that have recently been struck down.
WSD: Okay. So you guys have other litigation you’re dealing with right now such as Texas and California? How is that going?
TW: In 2005, California passed a law very similar to Illinois, again at the behest of wholesalers. Basically California changed from its reciprocity system to a permit system. The way the bill was originally written, out-of- state wineries and out-of-state retailers would have been allowed to get a permit to ship into California. Wholesalers insisted that retailers be struck out of that, and that’s how the bill passed.
SWRA immediately sued the California and we got an agreement with the California ABC not to enforce the new law against out-of-state retailers for a period of two years during which time SWRA would pursue a new law that basically allowed out-of-state retailers to ship into California. We’ve already had a hearing in the California senate and we’re moving toward getting a law passed in ’08 that will codify retailers being able to ship into the state on the same terms that wineries are able to ship into the state.
Texas passed a law, of course, that prohibited out-of-state retailers from shipping into Texas while still allowing Texas retailers to ship to Texas. We sued them. We’ve gotten through all of our briefs and we’ll be having oral arguments on summary judgment on September 21st. That was a really interesting case, Megan, because right in the midst of that whole case being worked through, Texas wholesalers pushed through a new law in Texas which essentially leveled it down. Now in Texas, according to SB 1229, a Texas retailer may only ship wine to a consumer who resides in the county where that store resides. And it’s quite clear why they passed that law. They were afraid that we were going to win our lawsuit and so they were trying to protect themselves through a cynical leveling down provision. And now Texans basically can’t get any wine shipped to them that exists outside the county in which they live. This answers the question, do wholesalers ever have consumers' interests at heart.
WSD: Are things looking good in Texas, or is that a state that the SWRA is a little more worried about?
TW: We believe our arguments are stellar. The issue is how the judge will treat the new law as related to our lawsuit.
WSD: Right. Okay. And what other states are you guys fighting in right now?
TW: Those are the only two states in which we have litigation going on right now, California and Texas. Beyond that, we’re doing is a lot of consumer outreach. We’re also working closely with a variety of different state regulatory bodies to clear up confusions in a variety of different laws. So, for example, Missouri just changed from reciprocity over to a permit system but they left reciprocity in place for retailers. And then they were under the mistaken assumption that there was no reciprocity states left in America for retailers, so they stated in their newly issued rules that no retailers from out of state can ship into Missouri. But of course California remains a reciprocal state for retailers as does New Mexico. So we do that sort of work too. Our job basically is to work on behalf of retailers across the country and consumers to make sure they have access to the wines that they want.
WSD: What do Specialty Retailers see as their biggest threat right now?
TW: The biggest threat that we see right now to consumer rights is most certainly wholesalers who are trying to hang on to an outdated system that simply does not work for the 21st century. Consumers have every expectation that they’ll be able to go online and purchase the wines they want. States have numerous controls for collecting taxes, for keeping the market orderly, but wholesalers are trying to hang onto a system that was built to their advantage over 75 years ago. And as a result of that system they have enormous power in the state legislature. I mean, wholesalers donated $5.4 million since 2000 to the Illinois legislature. And there’s no one else who can compete with that. Who wouldn’t love to have a monopoly on sales? I mean, I can see why the wholesalers want to protect that, but it’s not good for consumers and it’s not good for retailers.
Specialty Wine Retailers is growing. As a national organization we’re becoming more and more powerful with more and more clout. And I think one of our biggest assets is consumers who love wine. They’re looking for someone who’s going to represent them in these battles, someone who’s always going to stand up for them no matter what. And I think Specialty Wine Retailers is probably the only organization out there that’s actually willing to take action on behalf of consumers, the only organization.
Consumers need an advocate out there. They need an advocate who’s going to stand up for them and say you should be able to obtain the wine that you want to obtain without being obstructed by any number of different obstacles. We’re going to be the ones who stand up for consumers and we’re going to fight for their rights. We are going to stand up for retailers' rights. We’re going to sue where we have to and we’re going to lobby where we have to. By the time we’re done consumers are going to have a right to buy the wine they want.
WSD: Thanks again Tom for speaking with us.
posted at 9:03 AM
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