The Facts About the CARE Act Are Shared with Congress

Congress Encouraged Not to Be Fooled by Misinformation

ALEXANDRIA, Va., April 6, 2011/PRNewswire-USNewswire/ -- The National Beer Wholesalers Association (NBWA) sent a letter entitled "Don't Be Fooled! CARE Act Fact vs. Fiction" to members of Congress on April Fools' Day to present the facts of the Community Alcohol Regulatory Effectiveness (CARE) Act, H.R. 1161, which has received impressive bipartisan support. The letter points out that:

• The CARE Act IS constitutional.  The CARE Act is consistent with previously expressed congressional intent and the U.S. Constitution.  The Commerce Clause gives Congress the power to regulate commerce between the states, and the 21st Amendment gives states the power to regulate alcohol.  The CARE Act clarifies that states continue to have the authority to make their own alcohol-related decisions as rooted in the U.S. Constitution and is consistent with a related Supreme Court ruling that prohibits discrimination against suppliers.
• The CARE Act does NOT hamper suppliers' ability to do business.  Specifically, the CARE Act would NOT end direct shipping; it would actually protect a state's ability to allow direct-to-consumer shipments for alcohol producers. 
• The CARE Act IS needed.  The CARE Act is necessary because more than half the states have been sued in federal courts by plaintiffs seeking to reduce the states' ability to regulate alcohol.  The CARE Act will simply help to limit such unnecessary litigation by clarifying congressional intent and continuing to keep alcohol regulatory decisions at the state level.

To set the record straight and combat the false and misleading accusations about what H.R. 1161 would actually do, the letter outlines the following facts:

Fiction:  "Reduces consumer choice"

FACT:  With as many as 50,000 wine labels and 13,000 beer labels, no other consumer product in America has so much choice. NBWA supports the states' ability to allow differential market access for small producers to help them grow their brands. Those state laws are a favorite target for these plaintiffs, and the CARE Act would protect them.

Fiction:  "Scraps successful 75-year-old system of balanced federal-state regulation"

FACT:  More than 40 state attorneys general wrote Congress last year saying the real risk to the current and successful system of state-based alcohol regulations is "…the growing threat facing our states from unprecedented legal challenges that seek to eliminate our ability to regulate alcohol." The CARE Act is a direct response to these threats and will assist states in continuing to determine how, when and where alcohol is sold in their local communities while ensuring alcohol suppliers are not discriminated against.

Fiction:  "Violates the Constitution"

FACT:  The CARE Act is consistent with previously expressed congressional intent and the U.S. Constitution. The Commerce Clause gives Congress the power to regulate commerce between the states. The 21st Amendment gives states the power to regulate alcohol.

Fiction: "Raises prices"

FACT:  The current system – which the CARE Act recognizes and reaffirms – encourages competition, entrepreneurship and growth. The system balances intense, inter-brand competition with an orderly market. The CARE Act does not address specific state alcohol laws, including those laws that provide for competition and those that maintain order in the marketplace.   

Fiction:  "Hurts small businesses and locally owned producers"

FACT:  America's beer distributors are local, family-owned businesses and they support the CARE Act. Many of the most vocal opponents are major international conglomerates with headquarters in countries where they do not sell alcohol the way we do here in the U.S. The CARE Act specifically prohibits facial and intentional discrimination against producers, and state laws that allow for differential treatment for small producers would be protected by the CARE Act.

Fiction:  "Eliminates jobs"

FACT:  The only jobs that would be eliminated by this legislation are plaintiffs' attorneys who are suing states. America's beer distributors directly employ 98,000 men and women and support state laws that help small suppliers and local retailers grow jobs. The CARE Act would stop many of these frivolous lawsuits that actually put laws that provide differential market access for small producers and the business of brick-and-mortar retailers at risk.  

Fiction:  "Allows discriminating laws to stand"

FACT:  The CARE Act is consistent with a U.S. Supreme Court ruling that prohibits facial or intentional discrimination against producers. That same Supreme Court ruling also supports state-based regulation and refers to the three-tier-system as "unquestionably legitimate." 

Fiction:  "Eliminates competition"

FACT:  Over the past 75 years, under the current state-based system of alcohol regulation, competition and consumer choice for alcohol products has thrived and continues today. Under this regulated system more than 1,700 breweries and 7,000 wineries have come into existence across the U.S. The CARE Act would protect this system against those trying to deregulate alcohol to the benefit of the largest alcohol producers and remote retailers, which in turn would make it much harder for smaller producers to compete.

To view a full copy of the letter, click here.   To learn more about the CARE Act, please visit www.thecareact.org.

The National Beer Wholesalers Association (NBWA) represents the interests of America's 2,850 licensed, independent beer distributor operations in every state, congressional district and media market across the country. Beer distributors are committed to ensuring alcohol is provided safely and responsibly to consumers of legal drinking age through the three-tier, state-based system of alcohol regulation and distribution. To learn more about America's beer distributors, visit www.AmericasBeerDistributors.com. 

SOURCE National Beer Wholesalers Association