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Thurmond Targets Wine Export Subsidies

Dana Nigro
Posted: August 5, 1999

Sen. Strom Thurmond -- the man behind the warning labels on wine bottles and an active opponent of the recently approved health-benefits labels -- has targeted the wine industry with legislation again. This time, the South Carolina Republican is trying to end the export subsidy that the U.S. government provides the wine industry.

On Wednesday, the Senate approved an agricultural appropriations bill (S1233) with an amendment introduced by Thurmond that would prohibit the Foreign Agricultural Service from promoting the sale or export of alcoholic beverages. The House version of the agricultural appropriations bill does not contain such provisions, and differences will have to be worked out in a House-Senate conference committee in the fall.

The wine industry's "Market Access Program" funding for fiscal year 1999 totaled $3.6 million, of which $3.19 million was allocated to the San Francisco-based Wine Institute, a winery trade organization. The Northwest Wine Promotion Coalition and the New York Wine and Grape Foundation received $323,000 and $91,000, respectively. If Thurmond's amendment passes, the industry would not receive any funding in future years.

Thurmond said that his amendment is not a campaign against the wine industry or consumption of alcoholic beverages. "Continuing to give these export-support subsidies is bad public policy for a number of reasons, not the least of which is that the wine industry has more than sufficient financial means to finance their own product promotion efforts," he explained. "It is puzzling as to why an industry that last year exported $537,000,000 -- half a billion dollars -- would continue to require the assistance of the American taxpayer to reach foreign markets."

But the Wine Institute's international director, Joe Rollo, argued that U.S. wineries only hold a 3 percent share of the world export market and still face formidable tariffs and other trade barriers. He said, "Overseas, we do not compete against other companies, but against the combined might of governments such as the European Union, which in 1998 increased its budget for their wine trade sector from $938.3 million to over $1.3 billion -- an increase of about $400 million."

Wine Institute president John De Luca added, "Of the 125 California wine companies participating in MAP, the predominant majority are essentially small family-owned enterprises making world-class wines."

De Luca concluded, "Senator Strom Thurmond's political vendetta against the U.S. wine industry continues to know no bounds."

For a history of Sen. Thurmond's opposition to the health-effects labels:

  • December 21, 1998
    Two Powerful Senators Stand in Way of New Wine Label

  • February 23, 1999
    Senator Pledges to Raise Taxes on Wine, Ban Health Messages

  • March 2, 1999
    Strom Thurmond Challenges Wine's Health Claims Again

  • April 23,1999
    Senator Thurmond Relaxes Stance Against Treasury Department in Wine Label Battle

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