Viewpoint: Liquor bill shows need for reform
By Joe Baker
By Joe Baker
The rule in Illinois politics is youve got to pay to play. If you dont pay up front, you will pay later.
Since 1999, contributions from liquor distillers, distributors and related interests have topped $875,000. Nearly half that amount was given by a single donor, United Distillers and Vintners, a subsidiary of Guinness.
Liquor distributors have contributed more this year than they gave while they had a bill before the legislature. The Wine and Spirits Fair Dealing Act was spawned by William Wirtz, owner of Judge & Dolph Distributing, one of four major distributors that control more than 85 percent of all liquor sold in Illinois.
The Illinois Campaign for Political Reform observed: It has become a case study in the need for campaign finance reform. Since the end of prohibition, Illinois law has required wineries and distillers to sell their products to distributors, who then sell to retailers; wineries and distillers are barred by law from selling directly to retailers.
Wirtzs bill prevents wineries and distillers from canceling a contract with a distributor unless a years notice is given. It completely forbids cancellation except for good cause. Additionally, the measure included a small tax hike on wine and spirits to help finance Illinois First.
Those provisions, say United Distillers and Vintners and others, make it impossible for distillers to change distributors, thereby reducing competition. They called the bill protectionist and said it would bring large price hikes, far in excess of any tax increase.
A survey by the Illinois Licensed Beverage Association found that price increases were two-and-a-half times the amount of the tax increase.
To ensure he got what he wanted, Wirtz and his associates hired 24 lobbying companies with 92 registered lobbyists to bombard legislators on his behalf. Wirtz and his companies poured in more than $357,000 in 1998 and 1999. The lobbyists tossed in another $360,000.
The retailers group estimates the distributors collected an additional $26 million in profits in the first six months after the law was passed. Thats an annual return of more than 7,000 percent on their investment.
For their efforts, Illinois liquor distributors won unprecedented legislative protection for their industry.
The campaign reform group noted: Wirtzs actions reinforce the idea that insiders with clout and cash can secure unfair advantages over consumers. The impression is so strong, many legislators who supported the Wirtz bill have since reconsidered their report.
Wirtzs actions also influenced the wineries and distillers. They are challenging the law in court. Donations from United Distillers and Vintners also went to $388,000 in 2000 and may have prompted Wirtz and his allies to kick in another $211,000 in the first quarter of this year.