Down the Hatch

The California Legislature owes consumers a more sober look than it has given so far to bills being promoted by the beer and wine lobbies.

Consumers Union estimates that Californians can expect to pay an extra $64 million a year for beer if SB 1211, sponsored by state Sen. Ralph C. Dills (D-Gardena), passes. It bases that estimate on experiences in states that have granted exclusive marketing rights similar to those that would be expanded by the Dills bill. Under the bill, beer distributors would have exclusive rights to sell beer to retailers in a specific territory and couldn’t sell their brand of beer outside that territory. All merchants would have to buy beer from the authorized distributor, meaning that they couldn’t shop for the lowest price to pass on to consumers. Between 80% and 90% of beer sold in California is already sold under exclusive territorial arrangements; rather than passing this bill, which would eliminate any vestige of competition, the Legislature should wipe out the existing monopolies.

Price competition would also be reduced under SB 589, another Dills bill that would restrict the number of companies that could import foreign wines--including champagne, which has been showing up in California stores at nearly half price because of intense competition. The legislation would benefit only a few importers and some domestic producers, and has been labeled by Atty. Gen. John K. Van de Kamp as “strictly an attempt to restrict competition and thereby maintain high prices.”

The measures have passed the Senate. They will come before the Assembly Ways and Means Committee today, and should go quickly down the hatch.

In the first six months of this year the California Beer Wholesalers contributed nearly $83,000 to members of the Legislature. The Teamsters Public Affairs Council contributed $40,375, the Wine Institute $17,163 and the Wine and Spirits Wholesalers $11,450. Proponents gave a total of more than $411,000 in the last year while opponents, like grocers and retailers, gave $170,826. It’s one thing to order a round for the house, but the Legislature should say no thanks on this one.