When I wrote last week about a proposed law to allow domestic wineries to sell their products directly to stores, I narrowly missed connecting with Janet Seaworth, executive secretary and legal counsel for the North Dakota Beer Wholesalers Association, before the story went to print. The Bismarck lobbying group strongly opposes the legislation.
Rather than leave that group’s positions by the wayside, I held onto a note Seaworth sent me outlining the wholesalers’ positions. Among her key arguments:
- The current system makes it easy to regulate alcohol for taxation and safety purposes by requiring all products to pass through a supply chain from producers to wholesalers to retailers. “That provides accountability and if tainted product were discovered in the U.S., the current system would allow distributors to pull that product,” she wrote. Take that away, Seaworth wrote, and there’s no way to ensure product integrity or collect excise taxes, which are levied at the wholesale level. “The Tax Department has taken a strong stance in opposition to this legislation for that very reason,” she wrote.
- The law would expose the state to serious legal challenges. In other states, she wrote, laws that let domestic wineries sell directly to stores led to costly lawsuits from out-of-state wineries. If out-of-state wineries win that battle here, she wrote, they’ll sell directly to stores without regulation, and domestic wineries will actually suffer in the face of increased competition.
- Domestic wineries already have access to the market. Seaworth told me seven of the state’s eight domestic wineries sold their products to in-state distributors last year. “Every domestic winery that wants a distributor has one,” she wrote. “We do not believe that our system of alcohol regulation should be by-passed whenever it doesn’t fit someone’s business plan.”
Supporters of the law, including many domestic winery owners, disagree on just about every one of those points, of course. If you’ve got strong feelings either way, now’s the time to give your state senator an earful – the bill has already passed the house, and the senate will take it up soon.