Tuesday, February 2, 2010

Response to WWI Legislative Update

Dear FWWS Members,

It has come to our attention that a recent legislative update report from the Washington Wine Institute (WWI) to its members focused entirely on Family Wineries of Washington State and our response to the WWI’s Special Occasion Events bill, a bill which we support. We regret that the text of this document, forwarded to us by a WWI member, is inaccurate and inflammatory enough to require a response.

The opening remarks contain the following statement: “Our bill to make it easier for wineries to participate in charitable events was stalled in the House Commerce Committee after The Family Wineries of Washington proposed amendments to the bill.” This is nonsense.

Here are some facts with regard to the WWI’s Special Occasion bill: First, we support this bill which we made clear in our comments to the Executive Director of the Wine Institute.

Special Occasion Bill Comments in Outlook format
Special Occasion Bill Comments in HTML format

Our support of the bill with or without our suggested improving amendments incorporated is contained in bold text to make it perfectly clear. This bold text statement was included in our written comments to both the House and Senate before which we testified, and was reiterated in our verbal testimony.

Second, we have been aware of this issue being in play not since last fall as the WWI claims, but in fact since last spring when the WSLCB determined that the existing business models for third parties offering organizational services to charities for licensed special occasions were an illegal violation of the money’s worth restrictions between wineries and the charity/retailers.

Third, since we became aware that the WWI was working with stakeholders and the WSLCB on this proposal, we repeatedly asked for an advance copy to review in order that our comments could be incorporated in the bill, and to ensure our unequivocal support. Regrettably, our first opportunity to see this bill was after the Wine Institute introduced it, which was after the start of the already short current Legislative session.

Absent the opportunity to review and comment on this bill in draft form we offered three suggested amendments to improve the bill:

The first amendment would have clarified that wineries could directly pay the third party organizer (which is the common current practice), rather than the charity as stated in the bill. We withdrew this amendment after the WWI stated in the record that it was their intent that the charity and the organizer be considered one and the same.

The second amendment seeks to delete the word “reasonable” from the text as it refers to payments to be charged for attendance or table fees. In their update the WWI criticizes this amendment by asking, “What’s wrong with requiring only ‘reasonable’ fees in the law?” This is best answered with another question: “What is ‘reasonable,’ and who decides?” FWWS believes that in voluntary transactions such as these, the free market should determine what price is reasonable, not government agencies. This is a matter readily and fairly decided in the marketplace. If wineries do not think the fee is reasonable, they will not attend the event and the organizer will have to lower the price. The imposition of “reasonable” in the bill is a solution in search of a problem.

Our final suggested amendment would allow one business day for payment to be processed and checks to be written. This would make the bill consistent with the language in our proposed Payment Parity Act and would make the bill more useful for larger charities. The need for this amendment was driven home last Sunday night after our successful Enumclaw Wine & Chocolate Festival event. It was fully three hours after the event that the last invoice was double checked and the last check written. The WWI said of this proposed amendment: “While we understand that it sounds like a simple convenience, WWI opposes this amendment because its acceptance would make it much more difficult for us to defeat efforts to allow credit terms for other retailers.” We believe that the “credit terms” they are referring to may be those in our “Payment Parity Act” which would allow you the option of delivering wine and having the retailer send you a check the next business day exactly like those terms extended last year to the wholesalers for Electronic Funds Transfers (EFT’s). We say “extended to the wholesalers” because they broadly use EFTs for this purpose and wineries rarely if ever do. The WWI vehemently opposed our bill and it did not receive a hearing this year. It’s worth noting that the Wine Institute’s “Coalition of Stakeholders,” which included the Washington Beer and Wine Wholesaler’s Association, not only was the source of the EFT exception to money’s worth but also drafted a bill, now law, which contained the allowance for wholesalers to extend credit on food and non-alcoholic beverages up to thirty days with Liquor Board sanction for non-payment. This is not only identical to the terms proposed as optional in our Craft Wineries bill that the WWI also strongly opposed, but puts the WSLCB in the current and rather bizarre position of regulating non-alcohol trade.

The notion that these proposed FWWS amendments have “stalled” the Special Occasion bill in committee" is silly. This bill is scheduled for “executive session” in both the House and Senate where we understand that our amendments will be introduced for consideration. We fully expect that by the time you read this the WWI bill will have passed either as a good bill without our suggested amendments, or as a significantly better bill with our amendments.

For the record FWWS has never opposed any bill that the WWI has put forward. For their part the WWI has never supported any bill the FWWS has put forward, nor have they offered any constructive criticisms or suggestions as to how to make our bills acceptable to them. The WWI’s comments on our legislative proposals, offered only after a request for comment from a legislator, are attached for your review in the link which follows, as is our rebuttal to their response.

WWI Comments on FWWS Legislative Proposals
FWWS Response to WWI Comments

We have offered no fewer than five times to sit down with the WWI and discuss these and other issues, to find areas of possible agreement, or accommodation of differences. Every offer has been refused. We will continue to extend the invitation, but in the interim we will not apologize for offering suggestions to the legislature to improve bills submitted by the WWI for which no other courtesy for comment is offered.

As always, we value your feedback and comments. Please email us at board[at]familywineriesofwashington.org.

Sincerely yours,

The FWWS Board

John Bell, Paul Beveridge, John Morgan, Tim Narby, Alistair Sloley

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