[gnso-vi-feb10] RE: Is this is similar issue

[Milton L Mueller <mueller@xxxxxxx>]

Sorry to respond slowly to this. I see that no one else has responded, but I 
think it's an important post.
Every industry has its unique characteristics, but most of the issues we are 
dealing with here are played out in other industries and the basic competition 
policy issues are quite similar, and so are the politics.

The wine industry is very similar structurally to what is being discussed here. 
A certain structural model was imposed on the industry years ago for reasons 
that are completely irrelevant now. In the case of wine, it was prohibition, 
and the feeling (after its repeal) that distribution of alcoholic beverages had 
to be strictly controlled under highly regulated auspices in order to assuage 
the temperance constituency. Decades later, that structure created a special 
interest groups that were able to maintain the system long after the rationale 
for its original creation was gone.

The key lesson for consumers is that direct distribution by a supplier 
increases the chances of smaller wineries (or TLDs) being able to survive in 
the market place. Almost all of the economists who have analyzed the wine 
situation agree that the restrictions stay in place _only_ for political 
economy reasons; i.e., the lobbying and benefits retained by incumbent 
wholesalers.

From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
Behalf Of Jeff Eckhaus
Sent: Tuesday, April 20, 2010 5:37 PM
To: Gnso-vi-feb10@xxxxxxxxx
Subject: [gnso-vi-feb10] Is this is similar issue

I just read this article about the legislation to stop wineries and breweries 
from shipping direct to consumers and it felt like déjà vu.
http://www.winespectator.com/webfeature/show?id=42526

Some of the lines from this article may have been lifted from this mailing 
list.  Wholesalers state they are only working in the public interest and that 
they are only trying to protect consumers and that is why we must maintain the 
current three tier system.

The other side who want to deal directly with consumers are claiming that 
wholesalers are only using scare tactics to preserve their long standing 
monopolies.
I think this quote from US Congressman Mike Thompson may have been lifted from 
one of our transcripts "For decades, wholesalers have expended great resources 
to protect their state-mandated distribution system in ways that have harmed 
wineries and breweries. These efforts have stunted competition and weakened 
producers, which ultimately leads to fewer choices for consumers,"

I know we need to keep this mailing list on topic but reading this discussion 
on shipping wine seemed identical to the issues this group is facing and 
thought it would be worth sharing


Jeff Eckhaus