Texas Governor Greg Abbott is the big winner in the transfer of cash from the liquor industry to public representatives.
By W. Blake Gray | Posted Friday, 19-Feb-2021
If US politicians are for sale, alcohol wholesalers are the ones with the receipts to prove it.
A report produced using public records by Tom Wark, executive director of the National Association of Wine Retailers, shows that wholesalers gave politicians $40.6 million in state-level campaigns over the last two elections; more than double the amount donated by everybody else in the alcohol business, combined.
Wholesalers wrote another $47.1 million in checks to federal politicians (candidates for Congress and President) from 2017 to 2020, dwarfing the $32.8 million given out by producer groups, including wineries, beer brewers and distillers.
“Wholesalers give so much money because they have the most to protect,” Wark told Wine-Searcher. “The state mandate that people must buy from wholesalers is a huge financial and business advantage for wholesalers. It’s a quasi-monopoly. Doing anything to protect that is a sound business decision.”
Wark compiled the figures from publicly available information from The National Institute on Money in Politics. He included all political contributions from beverage alcohol producers, retailers and wholesalers from 2017 to 2020.
In most states, laws are written that require all alcohol sales to go through a wholesaler, which takes a cut of about 30 percent on every bottle you buy for doing nothing more than receiving cases from a producer and delivering them to a retailer. The profit margins for producers and retailers are significantly lower; Wark says this disparity in available money is also a reason wholesalers spend so much on governors and state legislators.
“There are so few wholesalers, compared to having thousands of wineries that split up their share of the pie,” Wark said. “You’ve got a lot of revenue in a very small group so they’ve got a lot of money to give. And there’s a tradition of it. Wholesalers have been giving a lot of money for a long time. Maybe if they stop doing it, it would be conspicuous.”
Bigger than Texas?
The biggest beneficiary of wholesalers’ largess is Texas Governor Greg Abbott, most recently seen blaming his state’s energy crisis on everyone but himself. Abbott received $1.5 million from wholesalers during the period studied. The second-biggest beneficiary is Texas Lt. Gov. Dan Patrick, who cashed in with more than $700,000 from wholesalers.
No other politician in America – not even Joe Biden or Donald Trump – received more than $247,000 from any of the three tiers in the three-tier system.
Why Texas? It’s a big state; Texans buy the second-most beer of any state, after California, and are third in buying spirits and fourth in buying wine. Retail stores from out of state are not allowed to ship into Texas and wholesalers want to keep it that way.
But why Abbott, who does not write legislation like the law proposed and shot down in the legislature several years ago that would have allowed out-of-state retailers to ship?
“In the end, any legislation has to be signed,” Wark said.
The report puts a definitive end to a specious argument advanced in June 2020 by the American Association of Wine Economists, which claimed at the time that “the wine industry overwhelmingly supports Trump”. AAWE’s published data included large contributions to Trump from Wine Spectator publisher Marvin Shanken, Jordan Winery CEO John Jordan, Westerly Wines proprietor Roger Bower and Domaine Serene proprietor Grace Evenstad.
In fact, according to Wark’s report, by the time the totals came in, the only sector of the alcohol business that supported Trump was wholesalers, who gave $150,000 to Trump and $104,000 to Biden. Wine and spirits producers, beer brewers and retailers each gave more than three times as much money to Biden as to Trump, Wark’s report shows.
“Biden was bringing in enormous amounts of money later in the campaign,” Wark said. “I think Trump is an anomaly. A lot of people didn’t want to be seen contributing to Trump’s campaign.”
Brewing up support
Beer brewers gave more money to Republicans than Democrats at the federal level – just not to Trump. And the single largest donor at the state-government level was Anheuser-Busch; the Belgian-based beer conglomerate spent more than $7 million on state legislators and governors during the period studied. But brewers spread their money around, as no politician received more from them than New York governor Andrew Cuomo, who got $77,600.
Wine and spirits producers favored Democrats. Perhaps unsurprisingly, the state politician who got the biggest checks from wineries was California governor Gavin Newsom, who pocketed $199,000. Oregon governor Kate Brown got $112,000 from wineries.
Retailers also leaned Democratic in their political contributions; this is somewhat surprising because small retail businesses in other fields tend to lean Republican. Wark suggested that the relationship between retailers and Democrats is skewed by David Trone, founder of Total Wine & More and now a Democratic Congressman from Maryland. Trone has been a big donor to other Democrats.
Even including Trone, retailers gave the fewest political contributions of any sector of the industry: just $2.8 million on the state level and $900,000 on the federal level. Cuomo got the most money from retailers: $82,000.
Wholesalers spread their money around very widely, giving to politicians in every state but one. For some reasons, wholesalers are willing to take their chances in Wyoming, as they gave no money to any state politician there. Wyoming allows out-of-state retailers to ship alcohol to its residents so maybe wholesalers only get who they pay for.
