Coffee will be the strongest drink served this morning when two major alcohol industry trade groups host a $1,000-a-head fund-raising breakfast for an unlikely beneficiary: Sen. Orrin G. Hatch (R-Utah), a teetotaling Mormon.
The event at the Monocle Restaurant on Capitol Hill will be a thank-you of sorts for Hatch, who led Senate efforts this year to stop vineyards and liquor merchants from selling their wares direct to consumers via the Internet--a growing movement that threatens the wholesalers who now control alcohol sales in most states.
Strange bedfellows as they may be, Hatch has no qualms about receiving help from the Wine and Spirits Wholesalers of America and the National Beer Wholesalers Association, which are sponsoring the event.
"The senator is happy to unite with a team that shares a common interest in preventing underage alcohol abuse" by curbing sales over the Internet that bypass wholesalers and go direct to buyers, a Hatch spokesman said yesterday.
The spokesman said the Utah senator hopes to raise $10,000 to $15,000 from a mix of lobbyists representing not only the liquor industry, but also defense, real estate and rural electric companies.
"This type of fund-raiser happens around town all day every day," said David Dickerson, vice president of the Wine and Spirits Wholesalers.
While 15 states allow direct sales, most still require the marketing of wine, beer and spirits through wholesalers or state liquor agencies. Hatch has complained that Utah's controls over alcohol sales, among the strictest in the nation, have been undercut by direct marketing, including sales to teenagers.
That situation made him an advocate of legislation to give states more muscle to enforce their right under the 21st Amendment to regulate liquor sales.
In March, Hatch held hearings and introduced legislation enabling states to seek injunctions against out-of-state vineyards and big retailers that illegally ship direct to consumers.
Last month, a version of the Hatch proposal, offered by Sen. Robert C. Byrd (D-W.Va.), passed 80 to 17 and was attached to a juvenile justice bill that the Senate then approved.
A bill similar to Hatch's was introduced yesterday in the House by Reps. Joe Scarborough (R-Fla.) and William D. Delahunt (D-Mass.).
Wholesalers contend that they are losing $1 billion a year in diverted illegal sales, while state governments are forgoing $200 million a year in sales and excise taxes.
Although wholesalers complain about a proliferation of Internet sites hawking "secret treasures from California's small, award-winning wineries," a bigger fear is that well-heeled liquor retailers will increasingly take advantage of direct selling techniques.
With that in mind, the wholesalers have pulled out all the stops to push for protective legislation.
The wine and spirits wholesalers group reported spending $430,000 on lobbying in 1998. Its political action committee handed out more than $200,000 in contributions to House and Senate candidates, mostly to Republicans. The beer wholesalers group spent $450,000 on lobbying last year, and shelled out $1.2 million in PAC contributions, all but $231,000 of it to Republicans.
At the end of 1997, the wine wholesalers association hired the Washington-based lobbying firm Strate@com, which in turn set up Americans for Responsible Alcohol Access. ARAA's job was to "raise the profile on the issue," according to executive director Barry McCahill.
ARAA hammered on the dangers of underage drinkers' access to alcohol on the Internet, and brought in groups such as the American Academy of Pediatrics and the American Trauma Society to broaden the coalition's base. But that effort has run into controversy.
On Friday, the Emergency Nurses Association decided to withdraw from the coalition. A letter from Jean A. Proehl, ENA president, said the group had decided that "ARAA is either a front for the wholesalers to promote their economic agenda or, at best, ARAA's agenda is strongly influenced by the financial support they are getting from the wholesalers." The implication was that the wholesalers' real goal was to protect their economic interests rather than promote responsible use of alcohol.
In May, Mothers Against Drunk Driving, which opposes illegal liquor sales through the Internet, formally disassociated itself from the coalition. "We didn't want to become a poster child for one side of the alcohol industry that was fighting the other side," said Bob Shearouse, MADD's director of public policy.
But those defections aren't expected to dampen the good feeling among friends at today's fund-raiser. Indeed, the top executives of both major wholesaler groups hosting the affair have long-standing ties to Hatch. Juanita D. Duggan, chief executive of the wine wholesalers, was a staff member on the Senate Labor Committee when Hatch chaired it 18 years ago. As executive vice president of the National Food Processors Association, she worked with him on legislation and helped him raise money. Ronald A. Sarasin, chief of the beer wholesalers and a former Republican House member from Connecticut, has been a friend of Hatch's for 20 years.
CAPTION: Two major alcoholic beverage trade groups will host a fund-raiser today for Sen. Orrin G. Hatch (R-Utah).