Bill to Curb Bargain Sales of Prestige Foreign Wines Gains

Legislation intended to curb the sale of prestige European wines at bargain prices narrowly cleared its final committee hurdle Wednesday after supporters pleaded with lawmakers to protect the California wine industry.

The bill, already passed by the Senate, was approved by the Assembly Ways and Means Committee and sent to the floor on a 12-11 vote despite opponents’ charges that consumers were being sold out and a monopoly was being created for a few foreign-owned wine importers.

“This Legislature ought to be ashamed of itself for considering this measure,” Assemblyman Frank Hill (R-Whittier) told the bill’s author, Sen. Ralph C. Dills (D-Gardena).

Opposition Groups

“You’ve got the grocers’ association, retailers, small liquor store owners, the attorney general and every consumer group up and down this state saying it’s a bad deal. So who are we trying to protect?” Hill asked.

In a bitter retort, Dills attacked California Common Cause, one of the bill’s consumer group opponents, as “Common Curse” and said that other detractors had exaggerated the bill’s effect on the buying public.

“I’m a consumer also. I like California wine and I could use a belt right now,” Dills said.

The bill, one of the most heavily lobbied measures of the session, was sponsored by some California vintners and a few foreign-owned exclusive importers of French wines that have seen their profits drop in the face of imports brought into the state through legal, but unconventional, channels.

Under the measure, only those importers selected by the foreign vintners would be able to bring foreign wines into the state. This would effectively eliminate so-called “gray marketeers” who have been able to buy the wines on the open market in Europe where prices are lower, pay for shipping to the Unites States and still undercut the going American prices by as much as 50%.

Supporters of the measure said their intent was merely to protect California’s wine industry, which has seen little growth in sales during recent years. However, only a handful of California wineries produce the kinds of products that compete directly with the prestige wines and champagne brought into the state through the gray market.

The true beneficiaries of the bill, opponents said, would be the European-owned importers who traditionally have charged Americans more than Europeans because of a belief that the Americans can afford to pay more.

Until now, the measure had not been viewed as a partisan issue. But on Wednesday, all 12 “yes” votes were cast by Democrats, who hold a solid majority on the committee. The committee’s Republican members opposed it.

Brown Criticized

After the vote, California Common Cause Director Walter Zelman and officials of other consumer groups charged that Assembly Speaker Willie Brown (D-San Francisco) had exerted last-minute pressure to get the bill passed.

“It’s fair to say that without his interest, this bill would not have gotten out (of committee),” Zelman said.” Brown could not be reached for comment.

In an effort to blunt some of the criticism, Dills agreed to accept two amendments to his bill that would automatically repeal it in four years or less if Europeans move to reduce trade barriers that now limit foreign export of California wines and champagne. Wine industry sources, however, said the amendments are not expected to have much effect.

Meanwhile, a hearing on a companion measure to carve out exclusive territories for beer distributors was postponed at the request of its sponsors. Critics charge that it would raise beer prices by making it impossible for retailers to shop for bargains.