How the "1,000-pound gorilla of the alcohol industry" throws its political weight around
Southern Glazer's Empire State of Mind, the unbearable cringe of “cancellable alcohol takes” + more!
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American alcohol sales are handled by a three-tier system of producers, distributors, and retailers designed to promote competition and block vertical business integrations that would enable dominant firms to amass undue market power and political capital. Each state has a different system, all 50 of which have at least one loophole big enough to drive a refrigerated box truck through, but that’s the general idea in theory.1
In practice, though, it’s not hard to find examples of a Big Booze player throwing its weight around in a manner that suggests the playing field is, ah, not entirely level. At the Albany Times-Union, reporter Chris Bragg did just that, using New York’s Freedom of Information Law (FOIL) to pry a trove of emails from New York Governor Kathy Hochul’s aides that suggest a certain heavy-hitting alcohol distributor paid tens of thousands of dollars to bend the gubernatorial ear about a bill that critics decry as anticompetitive. From Bragg’s Sunday report (emphasis mine):
According to emails [Wayne] Chaplin later wrote, the chief executive officer of Southern Glazer’s Wine & Spirits told Hochul about a contentious bill being pushed by his company, which is the largest wine and spirits distribution company in the United States. If the proposal became state law, it could add to Southern Glazer’s billions in annual revenue and generate substantial state tax receipts — but increase wine prices and crush smaller competitors.
Paying for political access? In Albany?! Could such an outlandish thing really be so?!?!
*clutches pearls so hard they turn back into sand*
Just kidding. Yes, New York politics are perhaps slightly more corrupt than the average state (a FiveThirtyEight data analysis found it to be the 11th-most-corrupt in the country, though that was back in 2015, so grain of salt, etc.) but that doesn’t mean a) versions of this don’t happen everywhere; and b) we should all just be like “ah well, distros gonna distro” and let it pass without further comment.
I actually think Bragg’s scoop—which opens with Southern Glazer’s Chaplin chatting up Hochul at a Rochester-area fundraiser hosted by Constellation Brands CEO Rob Sands, lol—is so strong because of how commonplace this sort of backchannel dealing seems to be for both the inner-circle staffers of one of the country’s highest-profile governors, and the head honcho of the biggest wholesaler in the U.S. The fact that Hochul’s executive aides are so comfortable responding to Chaplin’s messages containing Southern Glazer’s preferred policy outlines with stuff like “My apologies for the delayed reply! […] I’ve just read the materials you sent and am very much interested in the proposal” in eminently FOIL-able emails gives us a crystal-clear picture of how rote this sort of gray-area access-peddling really is. And the fact that Southern Glazer’s contributed $50,000 to the governor’s reelection campaign through 10 different Miami-based LLCs, and Chaplin and another executive personally hosted a pair of fundraisers for Hochul, shows you how much it costs. Bravo Bragg, sez I.
The governor’s campaign and administration spokesfolks both deny any wrongdoing or implication thereof, naturally. Southern Glazer’s wouldn’t give Bragg a quote, but a foe of theirs in the NY statehouse was all too happy to comment on the distributor’s dealings. “Southern Glazer’s is the 1,000-pound gorilla of the alcohol industry in the political world,” said Democratic state senator James Skoufis, who is currently blocking the bill’s release from his committee. “They operate in the shadows, they try to bully people, they try to buy people off.” Albany’s so-called “corruption sheriff” declared himself ripshit over Bragg’s findings, and over Hochul’s office’s dismissals of a series of beverage alcohol-related reforms during budget negotiations (all of which, per the reporter, Southern Glazer’s has “strongly opposed.” Probably just a coincidence!) “I am quite frankly outraged at how the alcohol reform negotiations transpired,” Skoufis told the Times-Union. Not hard to understand why!
This report comes at an inopportune moment for Southern Glazer’s, which is a defendant in a new federal lawsuit brought last week by ecommerce B2B booze platform Provi accusing the big-time wholesaler (along with fellow middle-tier major Republic National Distributing Company) of jointly and separately “stifl[ing] the growth” of the newcomer’s platform and “degrad[ing] the value” of its data analytics offering with a host of anticompetitive chicanery and raw market power.2 The timing of that lawsuit is itself pretty inopportune for the 1,000-pound gorilla/booze wholesaler, seeing as how the Biden administration is currently looking hard at the beverage-alcohol industry for antitrust violations.
“I’m sure the Justice Department is watching this case because they’ve announced that they’re going to crack down on anti-competitive activity in the alcohol industry,” beverage attorney John Hinman (who previously practiced antitrust law) told Brewbound of the Provi case. To state the obvious, the Times-Union’s behind-the-curtain look at how the middle-tier sausage gets made at the state level is simply Not Tight™ for Chaplin & co., who hope to convince the feds that there’s nothing to see there. But for anybody frustrated by the opacity with which the booze business’s great and powerful middle-tier Ozzes (?) operate, it’s fuel for the fire—and for an antitrust plaintiff like Provi, it may well turn out to be manna from heaven.
📬 Good post alert
🥴 The unbearable cringe of “cancellable alcohol takes”
Every couple of weeks there’s some new prompt tweet that makes the rounds on Elon Musk’s favorite and/or least-favorite website. They almost always suck! The practice, which Brian Feldman accurately described in a 2019 Intelligencer blog as “a more shameless, smarmier version of the types of grade-school tricks people use to ‘randomly’ generate funny results,” caters to humorless, growth-hacky narcissists. As such, it’s rare to find a genuinely funny quote-tweet amidst the bajllions of trite, try-hard, and cringe responses that a viral prompt unleashes on your timeline. Luv 2 b online, bb!!!
Anyway, the latest prompt tweet formula making the rounds is to request people to “post your cancellable take” about a given subject. Naturally, people eventually plugged “alcohol” and “beer” into the equation, which, fine, whatever, I can’t fault anyone for wanting to have a little fun and maybe go viral. And yet, I defy you to find a single fun/funny response to either of these tweets, the pair of which have literally 14,000+ quote-tweets and replies amongst them:
highlowlights I scraped just now:
“british drinking culture is literally alcoholism”
“Jäger belongs in a pharmacy with the rest of the cough mixtures.”
“Judging people for their taste in alcohol (particularly wine) is often extremely classist.”
“Gin is not for human consumption. Should be used to clean engines or tyres.”
“40 oz of malt liquor taste like death. I never rocked with them even when we was young and stupid”
And so on, and so forth. It’s unbelievably boring tweets like this all the way down! I don’t know what this means, really, or if it means anything at all besides “never tweet,” which remains sound advice that I personally refuse to take. I will say, having scrolled through entirely too many of these brain-dead comments this past weekend, I was heartened to remember that because Fingers is reader-supported and I don’t work on a #content farm, I’ll never have to repackage shitty viral sharebait like this into a “story” ever again. So I guess, in a sense, that’s nice? (If you haven’t yet, consider that a soft pitch to buy a subscription!) But man, what an indictment on the caliber of drinks discourse happening/possible on mainstream social media platforms. Just mind-numbing schlock. I’m glad we don’t do that here!
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Whether the three-tier system has ever functioned as intended anywhere is an open question, and one I’ll sort of sidestep for the moment. But if you have strong opinions about the efficacy of the model, please do get in touch, because I’m on the hunt for sources for an upcoming piece! You can email me at email@example.com; anonymity available upon request!