Here is a press release we just received from Rep. Kurt Schrader, D-Oregon 5th District, and below it we’ve re-posted our Oct. 30, 2011, editorial about the issue.

Congressman Kurt Schrader
Oregon’s 5th Congressional District

January 17, 2012

SCHRADER WITHDRAWS COSPONSORSHIP OF H.R. 1161: COMMUNITY ALCOHOL REGULATORY EFFECTIVENESS (CARE) ACT OF 2011

WASHINGTON D.C. – Congressman Kurt Schrader (OR-05) tonight withdrew his cosponsorship of H.R. 1161, Community Alcohol Regulatory Effectiveness (CARE) Act of 2011.

“I appreciate the thoughtful discussion I have had with Oregon wine growers and enthusiasts over the past several months,” said Schrader. “In response to the concerns raised by our wine community I no longer believe the CARE Act is an appropriate vehicle for regulation of alcohol. As of January 17, 2012 I have officially withdrawn my support for H.R. 1161 and look forward to building on the relationship we have developed to further grow the success of Oregon’s wine industry.”

“The Oregon Winegrowers Association is extremely pleased that Rep. Schrader has agreed to withdraw his sponsorship of HR 1161. The OWA worked hard to educate Rep. Schrader about why this legislation would be detrimental for Oregon wine and the growth of our industry,” said Michael Donovan, OWA president.

–

Our editorial from this fall:

Oregon Rep. Kurt Schrader says controversial legislation on interstate sales of alcohol isn’t going anywhere in Congress this year. Let’s hope he’s reading the congressional crystal ball correctly, because the bill appears more detrimental than worthwhile, especially for the Oregon wine industry.

And that’s the first reason Congress should drop consideration of House Resolution 1161. Congress should not waste time on any bill that fails to clearly articulate why the legislation is needed.

HR 1161 states that it is “to reaffirm state-based alcohol regulation, and for other purposes.” However, that reaffirmation may not be needed, and the “other purposes” appears to create a loophole that eventually could be used to block some interstate shipments of alcohol.

That’s especially troubling for Oregon wineries, craft brewers and small distilleries, because it’s common for out-of-state tourists to visit their establishments, like what they taste, buy some to have shipped home and become an ongoing customer.

In fact, about 21 percent of Oregon wine is sold directly to customers — purchased at a winery in person, online or by mail — instead of going through distributors. So it’s no wonder that Oregon winemakers are up in arms over the legislation and Schrader’s endorsement of it.

Here’s the deal: The bill appears to continue a long-running dispute between distributors — who make money by being the middlemen in liquor sales — and alcohol makers who sell some of their products directly to consumers, thereby eliminating the middlemen.

Distributors want to protect their system, which is understandable. But it’s not Congress’ role to protect industries from adapting to changing times.

Supporters of the bill say it’s necessary to reaffirm states’ regulatory powers, because various court rulings have undermined them. That’s Schrader’s position, and he signed on to HR 1161 because he doesn’t think it would harm Oregon.

Opponents disagree. They say the bill would circumvent those sensible court rulings, undercut interstate commerce and create a loophole through which states could discriminate against specific alcohol producers from other states.

Support or opposition to the legislation, in essence, comes down to how any particular interest group and its lawyers interpret the court cases. Oregon winemakers are worried that the bill is even under consideration.

But Schrader said their concerns are much ado about nothing: “The bill’s not going anywhere.”

However, the debate does raise legitimate issues:

-State control of alcohol sales should be maintained instead of being left to the federal government.

-Interstate and intrastate shipments of alcohol must be treated the same. If a state allows shipments by in-state companies, it should permit them for out-of-state companies.

-Neither small-scale alcohol producers nor distributors benefit from an endless back-and-forth legislative battle. With new thinking, the sides might find areas where they could agree.

-Schrader and the wine industry have some fence-mending to do. Each says the other initially was unresponsive to attempts to communicate.

The bottom line is that Oregon’s wine industry is an important sector of the economy. Oregon has about 425 wineries — mostly small ones — and about 300 of them sell directly to consumers in one way or another.