Congressional Wine Caucus ghosts industry amidst rising headwinds

While craft wineries face mounting challenges, their legislative advocates seem awfully quiet.

In recent years, the U.S. wine industry has faced mounting challenges from international competition and domestic headwinds. Yet, amidst these struggles, a crucial voice has been absent: the Congressional Wine Caucus. I find this silence concerning and believe it's time to call for greater engagement and transparency from this group.

The Congressional Wine Caucus: A brief history 

Founded in 1999 by California Representative Mike Thompson and George Radanovich, the first winemaker to serve in Congress since Thomas Jefferson, the Congressional Wine Caucus was established to protect the interests of America's vibrant wine industry. It’s said the wine industry contributes more than $250 billion to the U.S. economy annually, provides over a million full-time jobs, and generates significant revenue for the country and states through sales tax and excise tax along with payroll and income tax.

The Wine Caucus, a bipartisan group, aims to educate Members of Congress about issues affecting the nation's wine community and advance relevant legislation. However, the last update on their website was in 2019, leaving me and many in the industry wondering about their current priorities and activities.

Wine industry headwinds and missed opportunities 

The wine industry is currently facing its greatest set of challenges since the Great Recession. Growth rates for wineries have hit an 8-year low of 3.7%, with projections for 2024 looking even bleaker.

Maybe there is more that is going on behind the scenes than we see, but it would be good if we had some transparency from this group on what their priorities are as the industry faces attacks on consumption by the WHO, anti USPS shipping folks, and general damage being caused by unjust restrictions on the smaller producers.

In 2021, I thought were going to enter a vastly period for small producers as the Treasury released a report called “Competition in the Markets for Beer, Wine, and Spirits” in response to President Biden’s July 2021 Executive Order 14036 that assessed the current market. The report emphasized how industry changes could benefit smaller participants in the beer, wine and spirits industry. Do we feel that there has been any advancement for small producers in the last 3 years since this report was launched? We’ve instead seen continued consolidation, which goes directly against the purpose of the report.

The need for better industry representation 

I’m convinced the Caucus is not receiving correct and reliable information on what is going on across the industry because if they were, they would likely be a lot more vocal and active in helping the producers across the country with their current pain points.

It could be that the Caucus is influenced by the wholesale channel and members of the Caucus are receiving sizable contributions from various organizations and businesses that would be considered “Big Business”. Just have a look at the following graph of Wine and Spirits Wholesalers of America lobbying. The Wholesale association has doubled their number of lobbyists since the Treasury report was released in 2021.

Source: OpenSecrets.org

I think it is unfortunate that the only folks that can afford to connect with members of the Wine Caucus are the big lobbyists or big associations that do not represent the issues faced by 97% of US producers. If you look at the large association's memberships, you see this all too clearly. This is why it is so important that the smaller wine associations get involved in industry politics or better still, impacted producers spend a few minutes each quarter and reach out to their representatives. Put it on your calendar as an important task for you, no one else can do that for you.

It’s clear that the states’ current legal structures in the US are not working for a modern wine industry. Growth is slowing, wineries are closing, vineyards are being ripped up. Nationwide marketing campaigns are not enough for the industry. We need to level the playing field for small and creative producers who drive innovation and bring new participants and tax dollars to the category.

We need this group of over 200 legislators to take some time and learn about the unnecessary and unjustifiable restrictions that the states they represent have placed on the craft producers. Remember, craft producers make up 97% of the industry. One of their issues is “Fighting for fair market access for our wines in foreign markets” - how about simply helping clean up the domestic rules and help our craft producers here in our own country where the regulatory “no” folks are creating domestic harm to our industry?

The path forward: Balancing regulation and growth 

The Congressional Wine Caucus's mission statement begins with a clear purpose, "The Congressional Wine Caucus is dedicated to educating Members of Congress about issues affecting our nation's wine community and advancing legislation to address these priorities." However, with no public updates or significant actions since 2019, it's challenging to see how they're fulfilling this mission.

As industry stakeholders, we must take a proactive approach. I encourage you to reach out to your state legislators, expressing gratitude for their support of craft producers while also inviting them to engage in meaningful discussion.  

Use these opportunities to educate them on the challenges you face, particularly issues like direct-to-retail sales restrictions for small producers who lack wholesale representation. In my experience, many legislators are surprised to learn about these obstacles, often responding with, "I never knew that. You mean you can't do XYZ?" This underscores the importance of our role in educating our representatives.

The 21^st Amendment is okay. It is not the problem, even though adult beverages should not be part of the constitution (personal belief). However, it shouldn't be used as a blanket justification for overly restrictive regulations. States like California have demonstrated that it's possible to create more freedom for producers while maintaining necessary oversight. The 21^st amendment was designed to give states control over alcohol sales, not to protect wholesalers or stifle innovation.

Wholesalers play an important part in the distribution of adult beverages, but the 21^st Amendment was not set up to protect them. It was put in place to allow states to choose how they manage sales in their states, but regulators are systematically damaging the industry in favor of protecting the big 3%. What we now need to do is educate the new generation of legislators and Congressional Wine Caucus members about these issues which are stifling the growth of the small businesses, damaging the US agricultural industry, and limiting the choices of adult consumers.

As we work towards these legislative goals, let's not forget the joy that brings us all together in this industry. To that end, do check out the Come Over October movement. Invite your friends to come over and drink wine with you. Wine is to be enjoyed.

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