January 25, 2007
Drink 'em if you got 'em

How stuff gets done in the Lege, in a nutshell.

Liquor wholesalers dumped nearly $1.7 million on Texas lawmakers in the weeks leading up to the 2007 Legislature while pushing for changes that would allow them to sell booze directly to restaurants and bars.

The law now allows only package liquor stores - not wholesalers - to supply establishments where patrons drink on the premises. Wholesalers say that's not fair; package stores say giant wholesalers would undercut their prices to monopolize the market, potentially costing thousands of people their jobs.

The wholesale giants, Dallas-based Glazer's Distributors and San Antonio's Republic Beverage Co., are placing a big bet on getting the law changed.

They spent nearly five times more on lawmakers in the past 10 weeks than they did in the entire year before the 2005 session. According to Texas Ethics Commission filings released last week, Gov. Rick Perry and House Speaker Tom Craddick each took $100,000 and Lt. Gov. David Dewhurst got $75,000 from officers of the wholesalers and their political committees.

There also were $20,000 donations to 23 of 31 Texas senators, $40,000 apiece to three other influential senators and at least $1,000 each to 130 of 150 House members. Almost half received $5,000 to $10,000 apiece.

The effort provides a clear snapshot of how money makes the Capitol go round.

"It shows that in Texas, we have a pay-to-play system," said Suzy Woodford of Common Cause Texas, which tracks ethics in government. "We have no limits on the amount of money that these individuals, their PACs and their officers can contribute. So it clearly demonstrates to the average Joe that if you don't have the big bucks ... the item you care about is not even going to be considered."

The wholesalers make no bones about what they want. Alan Gray, a spokesman for the Glazer's-controlled Licensed Beverage Distributors PAC, said it's unfair that liquor wholesalers can't sell directly to bars and restaurants when wine and beer wholesalers can.

"We think it's an inefficient and archaic system for the distribution of distilled spirits, and we're going to seek a change," the spokesman said. Asked if the $1.7 million was given to lawmakers expressly to change the law, Mr. Gray said: "We participate in the political process, but we don't comment on our political giving."

As a supporter of the efforts by Saint Arnold's to change Texas' laws regarding on-premises sales of beer by microbrewers, I'm surely not going to defend this state's archaic alcoholic beverages code, whose express purpose seems to be protecting some interests at the expense of everybody else. In the abstract at least, this sounds like a worthwhile effort, even if the wholesalers are the bad guys in the beer battle. As long as that same alcoholic beverages code ensures no unreasonable barriers to entry for potential competitors to the wholesalers, then I tend to reject the package stores' worries about them eventually raising prices once they've muscled in. As long as it would be a genuinely free market, and not a de facto oligopoly, then I say deregulate away.

(See how magnanimous I'm being here to you liquor wholesalers? Maybe you could do me a solid in return and put in a good word to your beer wholesaling brethren about Friends of Texas Microbreweries. I appreciate it.)

Of course, the crux of the matter here is the money. The reason why Glazer and Republic are likely to succeed while the microbrewers are basically a sideshow is that Brock Wagner et al don't have $1.7 million in small unmarked bills to distribute around the Capitol like so much grass seed. Imagine a world in which they and every other high roller had to build a grassroots movement to lobby the Lege for laws they wanted. At least in this case, the liquor wholesalers have the virtue of a good argument for the legislation they want. If only that were the situation all the time.

Link via Dig Deeper Texas.

Posted by Charles Kuffner on January 25, 2007 to That's our Lege