HOUSE PUSHING FOR BEER SALES AT MORE MILITARY STORES

WASHINGTON -- The beer wars between Congress and the Pentagon are heating
up again. Only this time, there's a new twist: wine.

Last year, some lawmakers complained when the U.S. Army slashed beer
rations for the 37,000 troops in South Korea to stamp out a thriving black
market in American brews.

Now, as the military is trying to discourage heavy drinking among the
ranks, a group of wine and beer distributors has lobbied the House of
Representatives to tuck a tiny provision into the Pentagon budget bill for
the 1999 fiscal year that could increase by 70 percent the number of
military stores that sell beer and wine. The House overwhelmingly approved
the legislation last week.

Big brewers and vintners, like Anheuser-Busch Cos. Inc. and the E&J Gallo
Winery, while not actively pushing the issue, are cheering on the proposal,
which could reap millions in extra sales for them. "Military personnel
should be able to purchase beer in the most convenient way possible," said
Terry McAuley, military sales director for Anheuser-Busch.

But the Pentagon opposes the plan. "We have a deglamourization program for
the use of alcohol," said Rudy de Leon, the under secretary of defense for
personnel and readiness, "and it's very important we set the right tone."

Moreover, some critics say the proposal could hurt military readiness.
"It's a bad idea for the military to further encourage access to items that
may well disrupt discipline," said Rep. Roscoe G. Bartlett, R-Md., a member
of the House National Security Committee.

In the military retail world, only post or base exchanges, the Pentagon's
department stores, sell beer, wine and liquor, and they sell a lot of it.
Last year, the military's 426 exchanges sold $590 million worth of
alcoholic beverages.

Supporters of the proposal also want beer and wine to be sold in
commissaries, the military's supermarkets. They argue that the troops,
veterans and their families should share the same convenience as civilian
shoppers do in the 44 states that permit groceries to sell beer and wine.

Commissaries receive nearly $1 billion a year in federal subsidies and sell
their wares at deep discounts. Exchanges are not subsidized but still
undercut supermarkets by a few dollars on a 1.5-liter jug of zinfandel or
chardonnay in many areas.

Under the provision, the Pentagon would survey commissary patrons to gauge
interest in selling beer and wine alongside groceries but at the higher
exchange prices. If customers like the idea, the Defense Department could
start a pilot sales program at seven commissaries.

The idea appeals to some shoppers. "It would be a lot more convenient to
buy everything in one place," said retired helicopter crew chief Kenneth
Brown as he loaded groceries into his van outside the commissary at Bolling
Air Force Base here.

The Senate has not acted on the proposal. And given the Pentagon's
opposition, the plan still faces long odds.

But the military's 298 commissaries represent a huge new market for wine
and beer makers, especially for vintners who figure to pick up new sales
from women, who make up the majority of commissary shoppers and who are
more likely to buy wine than men, industry analysts say.

David Dickerson, a spokesman for the Wine and Spirits Wholesalers of
America, which represents 500 distributors in 42 states, said his
organization backed the survey but "was not a primary driver" behind the
effort. But individual distributors, helped by a former
House-staff-member-turned-lobbyist, Will Cofer, have buttonholed their
lawmakers.

The distributors' association has contributed generously to the campaigns
of the two biggest proponents of the measure, Reps. Saxby Chambliss, R-Ga.,
and Owen Pickett, D-Va. Since 1994, Chambliss has received $4,500 from the
association and Pickett has received $3,500.

"I've talked to some individual service members who think it would be a
convenience to them," Pickett said in a recent interview from his Norfolk
district, which has five military bases. Pickett and Chambliss said they
would rely on the results of the survey, if enacted and said the campaign
donations had no bearing on their support. "If patrons don't want it,"
Pickett said, "I don't want it."

Other military groups voice concern that expanding beer and wine sales to
the commissaries would drain proceeds from the exchanges. Profits from the
exchanges' sales go to build bowling alleys, finance child-care centers,
repair ballfields and improve other recreational areas for troops.

Stocking beer and wine could also take shelf space from discounted food and
other groceries that young troops and their families count on.

"What are they going to take off the shelves to make room for beer and
wine?" asked Sydney Hickey, associate director of government relations for
the National Military Family Association, an advocacy group in Alexandria,
Va. "Pampers?"

Checked-by: Mike Gogulski