We Choose Our Source of Joy and I Choose Illinois

A remarkably well-crafted bill concerning wine distribution in Illinois gives me joy, but also gives me hope for the American wine industry

I fully recognize that I had a long history of complaining.

Over the past 20 years, my primary complaints boil down to getting hot and bothered over states that maintain shitty laws that inhibit competition and maintain outrageous marketplace advantages for wholesalers at the expense of usually small and medium-sized alcohol producers and retailers.

I’m a complainer. I admit.

That must be the reason I feel such a sense of joy, JOY I tell you, when I get to pen something like this one, in which I get to praise a piece of legislation so perfectly suited for the modern era of wine sales and so desperately needed and so perfectly crafted to help both small and medium-sized wineries and retailers.

Illinois Senate Bill 2976, introduced by Senator Rachel Crowe, would expand self-distribution rights for both Illinois and out-of-state wineries. Currently, wineries inside and outside Illinois that make 25,000 gallons (10,500 cases) of wine annually may avoid using wholesalers and sell up to 5,000 gallons (2,100 cases) of wine directly to restaurants and retailers in the state of Illinois.

EXPANDING SELF-DISTRIBUTION IN ILLINOIS
The current self-distribution law was passed in the mid-oughts and represented a small crack in the state’s three-tier system. Moreover, due to the Supreme Court’s Granholm v Heald decision in 2005 that held a state law may not discriminate against out-of-state producers by giving in-state producers an advantage, Illinois wholesalers were unable to limit this small self-distribution right to Illinois wineries alone.

If SB 2976 passes it will expand both the size of the winery that can self distribute to those making 250,000 gallons annually and increase the amount the wineries may self distribute to retailers and restaurants to 50,000 gallons — a ten-fold increase in both cases and significantly increasing the number of wineries that may take advantage of self-distribution in Illinois.

This proposed law isn’t perfect. That would require setting no gallonage limits on wineries for eligibility for self-distribution, nor for how much may be distributed without the aid of a distributor.

But I’m not complaining. Honestly.

One thing I’ve learned over the past 20+ years watching the wheels of alcohol reform turn is that they do so, but oh so slowly. And it isn’t because the reforms are imprudent or untested. It’s because wholesalers in every state say “NO!” to any alcohol reform that doesn’t work to advantage them. The lawmakers listen and respond to this negativity because they are paid to…handsomely.

Illinois wholesalers will say “NO!” to SB 2976 also. It is a direct attack on the three-tier system, they will say. It will jeopardize tax collection, they will say. They will also say (and this is my favorite) that the bill is unnecessary because no winery inside or outside the state can handle the kind of logistics necessary to distribute 20,000 cases of wine to Illinois retailers and restaurants — as though that’s their issue with the bill.

The fact is, few Illinois lawmakers would even think of introducing this bill. It goes against everything their campaign contributors believe in.

THE HERO
But then there is Senator Rachelle Crowe, God bless her.

A first-term Senator from a downstate Senate district that hugs the Mississippi River and has more in common with St. Louis than Chicago, Senator Crowe appears to have not received any campaign contributions from Illinois wholesalers during her 2018 Senate run. If nothing else, this fact makes Senator Crowe an objective participant who appears more apt to represent her constituents and commonsense than the interests of middlemen. In fact, this is the second time this legislation has been introduced by Senator Crow, the first time being last year when it was completely ignored by legislative leaders. Senator Crowe does not appear to be happy about that.

Crowe is a former prosecutor. While such a position often entails compromise, it also requires one to make a forceful case and have an appreciation for how justice is calculated. This bodes well for the current iteration of her self-distribution legislation.

THE PATH FORWARD
At this point, it does not appear that SB 2976 has a permanent committee assignment. Nor does it have a sponsor in the Illinois House. The Illinois Grape Growers and Vintners Alliance is behind the bill as are the state’s wineries. the IGGVA in particular is working hard to see if this legislation can be moved forward.

I wouldn’t want to predict the kind of success this bill will have. We are still residing inside the world of COVID politics, which has often skewed what would be the normal course of various kinds of wine and alcohol-related bills. In normal times, this bill would be killed rather quickly.

The joy I feel at seeing this bill introduced in a state that more than most is controlled by middlemen wholesalers like Southern-Glazers remains palpable. My hope is that it at least gets a committee hearing. In that venue and in the media, this bill could get a thorough hearing with arguments from proponents and opponents being fully aired.

As I’ve written before here, the benefits of producer self-distribution accrue to retailers as much as they do to the producers selling the wine. Self-Distribution is the silver bullet that allows retailers to thrive and compete on grounds other than discounting. It will be very important for supporters of SB 2976 to round up advocates for the legislation in the retail sector.

Joy is not an easy thing to come across and experience these days. Moreover, alcohol legislation is not generally the source of that elusive sense of joy. But the near-perfect rationale for this change in Illinois’ self-distribution law is, today, my source for Joy and I’m sticking with that story.