Many wineries and wine-industry groups are aghast at a proposed federal law that could make it difficult, if not impossible, for many to ship their wines directly to consumers in several large markets—and give wholesalers even more power than they now wield.

The proposed legislation, H.R. 5034, is backed by the National Beer Wholesalers Association and other beer, wine, and spirits wholesalers, and many wine-industry leaders believe its impact could be catastrophic, especially to small and midsize wineries that have trouble finding a spot for their wares with the big distributors.

The bill would give more power to individual states to regulate alcohol sales and distribution, in part bypassing a recent U.S. Supreme Court decision that opened up state markets to direct sales to consumers.

Arguing that it would allow wholesalers to push through “anticompetitive, discriminatory” state laws in many locales, the San Francisco, California-based Wine Institute said it strongly opposes “this ill-conceived effort to give wholesalers license to create and perpetuate an environment of discrimination and inequality.”

The Sacramento-based Family Winemakers of California said the proposal would roll back progress made in recent years to create more market access for small winemakers in California and nationwide. It called the effort “a naked attempt” by wholesalers to dominate the marketplace.

In a recent post on his influential “Fermentation: The Daily Wine Blog,” wine writer and publicist Tom Wark called House Resolution 5034 “by far the most audacious attempt ever by wholesalers to take complete control of the market…(and) create circumstances in all 50 states that assure consumers only have access to the slim number of wines to which wholesalers decide consumers ought to have access.”

If it were to become law, Wark warned, “it will put out of business an entire swath of America’s artisan wineries,” including many in places like Napa and Sonoma.

The beer wholesalers group, lead by backers of the proposal, counters that H.R. 5034 “aims to clarify congressional intent that states have primary authority to regulate alcohol,” to prevent the further erosion of state regulatory authority while not discriminating against out-of-state producers.

More than 25 states have faced challenges “to their authority to regulate alcohol and their ability to maintain a licensed system of alcohol controls,” Craig Purser, the National Beer Wholesaler Association’s president, said in an April 16 statement. The Wine and Spirit Wholesalers Association and 39 State Attorneys General also support the bill, introduced April 16.

The current convoluted system of distributing wine, beer, and other alcoholic beverages is a remnant of Prohibition and its immediate aftermath. Five years ago, the U.S. Supreme Court appeared to ban discriminatory conduct by states, requiring them to treat in-state and out-of-state wineries equally. That was a big boon to California, which produces about 60 percent of the wine sold in the United States, and the Bay Area, which is responsible for a huge portion of those sales.

Mike Thompson and George Radanovich, who co-chair the Congressional Wine Caucus, distributed a memo to the entire House of Representatives last week, arguing that current laws and court interpretations “have struck a proper balance” between the 21st Amendment, which ended Prohibition but let the states regulate alcohol sales and transportation, the Constitution’s Commerce Clause, and other legal protections, including the Supreme Court’s 2005 decision, which opened some doors for direct-to-consumer shipments of wine.

Thompson and Radanovich said the beer wholesalers’ proposal would “make state laws supersede any federal law that is inconsistent with (a) state law’s provisions.”

The bill’s critics say that could be devastating to many California producers, since many states have strong wholesalers’ lobbies and would be likely to severely restrict direct-to-consumer sales.

Opponents fear that states traditionally opposed to direct shipping—such as Florida, Illinois, Massachusetts, Michigan, and Texas—would introduce legislation making such shipping much more difficult if H.R. 5034 were to become law.