Friday, July 15, 2011

Rant: Money Buys Influence & Access, Duh!

Unless you live in an isolated cave, you realize that political contributions can purchase influence and access. Just pick up any newspaper and you will be almost sure to see a story about such contributions. It is a fact of our political system and it probably isn't ever going to change. So pointing out that some group has donated a lot of money to political campaigns, hoping to protect their business, is not significantly newsworthy. So why all the attention lately to the amount of money spent by alcohol wholesalers?

What spurred on this latest attention was a study released by the Specialty Wine Retailers Association (SWRA) entitled "Toward Liquor Domination," and subtitled "How Alcohol Wholesalers, Time and Money Have Corrupted the American Alcohol Industry." The study indicates that alcohol wholesalers have contributed over $82 million to political campaigns and federal lobbying during the past three election cycles. The report states: "The $82 million wholesalers donated over the course of five years dwarfs that spent by retailers and producers on influencing lawmakers across the country." Unfortunately, the report fails to provide sufficient data to fully support that allegation.

I should initially note that I am not a supporter of the current three-tier system and I also do not support HR1161. But, if those matters are to be fought, then accurate information should be disseminated, rather than allowing hyberole and misinformation to divert attention from what is most important. Such matters give opponents fodder to attack, allowing them to avoid the important issues. Don't belabor the obvious and provide something new and substantial.

It is a simple fact that alcohol wholesalers contribute millions of dollars to political campaigns and lobbying in efforts to seek influence and access.  It is also a fact that alcohol producers and retailers contribute millions of dollars to political campaigns and lobbying in efforts to seek influence and access. The only difference between the two is the amount of money spent. So it cannot be corrupt for wholesalers to make such contributions, or producers and retailers would also be guilty of such corruption. 

The wholesalers appear to be more successful because they spend more money. Rather obvious isn't it? So why don't producers and retailers just spend more money, to be more competitive?  Producers are generating billions in revenue so it can't be a lack of money issue. Do they care enough to want to effectuate change in the three-tier system?

Let us look more closely at the figures presented in the Study, and I will also point out the missing data.

In the Federal Influence chart, during the past three election cycles (2005/6, 2007/8, 2009/10), it is noted that alcohol wholesalers contributed about $15.5 million to "federal election campaigns and Political Action Committees."  The producers of wine, beer & spirits contributed a total of about $9.5 million, with beer producers contributing the most, $5.5 million, and wine producers only contributing about $2.3 million. So, wholesalers spent about $6 million more than producers. But this chart omits the contribution of retailers, so the gap is actually lower. Why was information on retailers not provided?

In the State Influence chart, during the past three election cycles, it is noted that alcohol wholesalers contributed about $58 million to state political campaigns. Brewers, wineries, distilleries and retailers contributed a total of about $29.8 million, about half the amount of wholesalers.  This is the only chart with complete information.

In the Federal Lobbying Expenses chart, during the past three election cycles, it is noted that alcohol wholesalers spent about $8.8 million on lobbying efforts. But the chart fails to provide any information on lobbying expenses for producers or retailers.  Why was this information not provided? 

So, by totaling all of the figures for these three charts, alcohol wholesalers have spent about $82 million. The total for producers and retailers is about $39 million, but that number is actually higher as there is data missing on some of their contributions and expenses. That means the Study's conclusion is based on incomplete data and thus not properly supported.  Roughly, based on the figures we do possess, it appears wholesalers spend about twice as much as producers/retailers, which I do not think constitutes a total that "dwarfs" the other. That is just a bit of hyberbole. $40 million is a significant amount of money in its own right.    

I am also curious as to how much the Specialty Wine Retailers Association contributes to political campaigns and lobbying expenses.

A good portion of the Study rehashes the familiar problems with the three-tier system, which is not really necessary as that has been discussed many times before. And it is not earth-shattering news that alcohol wholesalers spend a lot of money on political contributions and lobbying.  I would rather know why producers and retailers are not contributing more to defeat the efforts of wholesalers. That is something people don't discuss, and has direct relevance to the overall issues.


hadley at The Urban Grape said...

Wait, we should have been contributing to a lobby?! Gotta get on that. Right after the rent, triple net, insurance, health insurance, payroll and inventory checks have cleared. Oh, and once we pay off the new cooler we bought by ourselves so that we wouldn't be in a distributor's pocket.

Oh well, maybe next year! ;)

Anonymous said...


Regarding what SWRA has spent in the same time on lobbying and contributions.

Contributions: $0.00

Lobbying: About $50,00

Tom Wark..

Richard Auffrey said...

Thanks for the comment Tom, but is the lobbying figure $50 or $50,000? The comma confused me.

Anonymous said...


About $50K for lobbying since 2006.