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Government, Politics & Issues

In Jefferson City, behind-the-scenes battle over alcohol is biggest-spending game in town

This article first appeared in the St. Louis Beacon, April 30, 2013 - For all the buzz in the Missouri Capitol about guns, education and the budget, a different issue is attracting all the bucks – alcohol.

At least two dozen lobbyists are wandering the halls, representing one side or another in a complicated case that is fueling an array of lawsuits, has given birth to two bills and has now entangled a disparate band of regional politicians and national political groups.

The bipartisan battle lines have St. Louis Mayor Francis Slay, a Democrat, on the same side as Phyllis Schlafly’s uber-conservative Eagle Forum. The opposing camp has some Missouri vineyards siding with national anti-tax guru Grover Norquist.

Even the Capitol’s elder statesman, Rep. Chris Kelly, D-Columbia, has been ensnared in a roundabout way because his wife, a judge, issued the court ruling – upheld by a federal appeals court – that set off the frenzy.

The only noteworthy entity not involved is St. Louis brewer Anheuser-Busch, which has been mum on the matter.

The hardest part of the battle is explaining what it’s about.

(And that may very well explain the very little press coverage, aside from an exhaustive, well-researched piece in the fledgling Missouri Times, a new publication covering the state Capitol.)

Major Brands vs. Glazer's

At the center are two liquor distributors: St. Louis-based Major Brands and Texas-based Glazer's Distributors of Missouri, which are on opposing sides.

At issue is a ruling that changed the relationship between Missouri's alcohol distributors, suppliers and retailers by revising, in effect, the definition of the word “franchise.” Last year, the St. Louis-based Eighth Circuit Court of Appeals upheld the decision.

Backers of the the court decision say that it gave suppliers and retailers more rights and flexibility in changing distributors. Opponents say that it tossed out decades of established Missouri law governing the alcohol industry and has invited chaos.

The court decision prompted a bill last year by now-state Senate President Pro Tem Tom Dempsey, R-St. Charles, to try to re-establish the old arrangement. The General Assembly passed the bill, but Gov. Jay Nixon, a Democrat, vetoed it, saying in effect that the measure went too far and could hurt the state’s cadre of small wineries.

This session, two bills – HB759 and SB365 -- have been introduced that are modeled after Dempsey's original bill, but with a exemption “carved out’’ for smaller wineries.

The bills are backed by Major Brands and opposed by Glazer's.

Slay has quietly shown up in Jefferson City regularly as a Major Brands ally, lobbying in favor of the bills. Slay's political consultant Richard Callow said the mayor believes that Major Brands is a “major, stable city employer and taxpayer, a good corporate citizen on a variety of issues, including responsible drinking.”

The mayor also agrees with Major Brands' legal argument in favor of the bills, Callow added. Callow's consulting firm, Public Eye, counts Major Brands among its clients.

Eagle Forum vs. Grover Norquist

Fellow supporter Eagle Forum has circulated a letter signed by state chief Janet Engelbach that praises the legislation, saying it “furthers family values and is true to the beliefs of our founding fathers.”

The group also asserts that the court decision striking down the state's old franchise arrangement amounts to “federal intrusion on Missouri’s rights as a sovereign state.”

Engelbach, by the way, also is chairwoman of the Jefferson County Republican Central Committee.

Led by Glazer's, the opposition struck back this week by announcing the formation of a new coalition -- Missourians for Fair Competition – to defeat the bills.

Besides Glazer's, the coalition includes the Distilled Spirits Council of the United States, McCormick Distilling, Westphalia Vineyards and the Missouri Retailers Association.

(Update) On Wednesday, the coalition announced that it is running TV and radio ads in targeted parts of the state. Only the radio ad is running in the St. Louis area.

The TV ad exhorts viewers "Tell your legislators to say 'no' to less competition and higher prices." (End of update)

In a statement, the coalition attacks the bills as unfair to suppliers. “This legislation would make it nearly impossible for liquor suppliers to switch wholesalers, even if such a change were in their best business interest. This monopoly protection would drive up prices for retailers and consumers, as well as hurt the industry's ability to create jobs by limiting competition in the market."

"Lawmakers should be in the business of supporting competition in our economy, not picking winners and losers," said Ed Rhode, the coalition’s spokesman. "This anti-competitive legislation is solely intended to help one Missouri business protect their market share at the expense of Missouri businesses and consumers."

(Rhode, by the way, is Slay's former press secretary.)

By Tuesday, an opposition letter signed by Norquist also was circulating in the Capitol, with the help of Glazer's allies.

Norquist contended that the bills were the handiwork of “special interests representing wholesalers” who believed the court decision “threatened their monopoly and ability to maintain a stranglehold over suppliers who aren’t governed by a franchise agreement.”

Lobbyists may benefit the most

Meanwhile, opponents of the bills also have pointed out that Major Brands chief Sue McCollum has donated to Democrats and helped lead Nixon’s transition team. The intent was to sway the Republican majority controlling the General Assembly.

However, as Dave Drebes’ blog Missouri Scout points out, Major Brands also has donated to Republicans, including House Speaker Tim Jones, R-Eureka, and House Budget chairman Rick Stream, R-Kirkwood.

Jones’ cousin -- Rep. Caleb Jones, R-California – is the chief sponsor of the House bill. However, lobbyists privately report conflicting opinions as to whether the speaker is for or against the Major Brands-backed bills.

Jones has yet to take a position publicly.

Some in both camps had privately contended Monday that the battle appears to have killed the bills this session, which would be seen as a victory for Glazer's. However, Tuesday saw speculation that Major Brands and its allies may get the measures -- or identical amendments -- resurrected before the session ends May 17.

The only point on which there is solid agreement? The fight has fattened the wallets of virtually every lobbyist in Jefferson City.

The big names in Glazer's lobbyist camp include former state Reps. Rodney Hubbard, D-St. Louis, and Steve Carroll.

Major Brands' latest big-name lobbyists include former House Speaker Steve Tilley, R-Perryville, who was spotted in the Capitol on Tuesday,  and former state Senate Speaker Pro Tem Mike Gibbons, R-Kirkwood.

Of the numerous lobbyists collared in the Capitol halls, every one confirmed being hired by one side or the other in the liquor war -- although all emphasized they couldn't confirm their role publicly.“If you’ve got blood in your veins, they’ll hire you,” said one lobbyist privately.

Confided another: “They’re spending a truckload of money. I’m just glad to get in on it.”

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