[Congressional Record Volume 156, Number 118 (Thursday, August 5, 2010)]
[Senate]
[Pages S6863-S6864]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  ALCOHOL REGULATORY EFFECTIVENESS ACT

  Mrs. FEINSTEIN. Mr. President, I rise to bring the attention of the 
Senate to a recent joint resolution passed by the California State 
Legislature. This resolution, S.J. Res. 34, urges Congress to defeat 
the Comprehensive Alcohol Regulatory Effectiveness Act of 2010, H.R. 
5034, a bill that would restrict legal challenges to unconstitutional 
alcohol regulation laws and negatively impact the American wine 
industry.
  This bill is being described by its proponents as an effort to 
promote regulation of alcohol and protect the public from dangerous 
effects. What the bill does instead, however, is to erect new legal 
barriers which give preference to in-State beer, wine, and spirits 
wholesalers at the expense of free and open competition. With its broad 
sweep, the bill cedes Federal authority over licensing, labeling, 
advertising, taxation policy and other matters.
  Under current Federal law, each and every State has authority to set 
its own law regarding the direct shipment of alcohol. A State can allow 
direct shipments to consumers, or a State can prohibit it. What a State 
cannot do, however, is to allow in-State producers to ship directly to 
consumers while barring out-of-State producers from doing so. This is a 
constitutional requirement, stated most recently in the case of 
Granholm v. Heald.
  The House bill could not constitutionally alter this system. Instead, 
it would erect new legal barriers that would make it more difficult for 
out-of-State producers to enforce their rights to equal treatment under 
State laws.
  I am very proud to say that my State of California is the fourth 
largest wine-producing region in the world. Our wine industry creates 
more than 330,000

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jobs and contributes $61.5 billion to the States economy each year.
  We are not, however, alone. Nationwide, the coast-to-coast wine 
industry, active in all 50 States, has an economic impact of some $122 
billion annually.
  And, in fact, 37 States and the District of Columbia currently allow 
direct shipment of wine from winemakers to consumers. Such laws 
increase choice for consumers. They also keep small wineries in 
business as wholesalers grow increasingly consolidated, offering less 
selection and squeezing out producers in the process.
  As the joint resolution passed Monday, August 2, 2010, makes evident, 
H.R. 5034 threatens serious harm to winemakers in California and across 
the country, as well as to consumers and competition in these markets. 
Should it be introduced in the Senate or passed by the House, I will 
oppose it and will urge my colleagues to do the same.

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