A Call for Free-Flowing Wine

Jacob Sullum | October 24, 2007

Last year I noted the website sponsored by Arizona liquor wholesalers who opposed a bill permitting direct-to-consumer interstate shipping of wine. The Specialty Wine Retailers Association, which wants to lift the legal obstacles that prevent wineries from dealing directly with consumers and prevent retailers from dealing directly with wineries, has launched an online retort to the forces of wine protectionism. Unfortunately, it is not nearly as snazzy as the Arizona wholesalers' effort, and the thin white-on-black type is a little hard on the eyes. But it's refreshing to see a business group standing up for freer competition instead of special favors. Notably, the SWRA wants to get rid of state laws that require alcoholic beverages to go through government-sanctioned wholesalers, but it does not suggest that consumers should be forced to buy only from retailers, which would be in the economic interest of its members.

The SWRA blog will be tracking legal developments affecting wine distribution as states respond to the Supreme Court decision that overturned shipping bans that discriminate against out-of-state wineries. An across-the-board ban on direct shipments, covering in-state as well as out-of-state wineries, is one possible response to this ruling. A consistent policy of letting people buy wine where they please is another.

My columns on the legal challenge to direct shipping restrictions are here, here, and here. Last year Kerry Howley noted that a wholesaler-financed survey had found little evidence to support wholesalers' dire predictions that direct shipment would lead to drunken teenaged orgies.

[Thanks to The Wine Commonsewer for the tip.]

Comments

|10.24.07 @ 1:18PM|#

Of course the wholesalers are right to fear teenage drunken orgies if wine could be ordereb by mail. What teenager is going to give his older brother money to buy a case of Miller beer when for $25 he can order some boutique cab from an obscure winery in Napa and wait 5-10 days to enjoy it?

|10.24.07 @ 1:20PM|#

...little evidence to support wholesalers' dire predictions that direct shipment would lead to drunken teenaged orgies.

Damn! I still support direct to consumer sales though. Just not as fervently.

Russ 2000|10.24.07 @ 1:47PM|#

direct shipment would lead to drunken teenaged orgies.

What good is an orgy if you've got Pinot Penis?

Fine print|10.24.07 @ 2:03PM|#

The 21st amendment to the US Constitution specifically allows states to regulate the import of alcoholic beverages. I'm not saying state-imposed restrictions make sense, just that the rules have to be changed on a state-by-state basis or by amending the US Constitution.

|10.24.07 @ 2:16PM|#

It's not all that, "refreshing to see a business group standing up for freer competition," when it's completely in their favor.

PintofStout|10.24.07 @ 2:32PM|#

You could argue that open competition is in everybody's favor, excepting those who are already receiving favor, and so everybody wins, including the people removing the obstacle. I don't see how saying it benefits them takes away from that argument.

I, on the other hand, usually argue for stuff that is harmful to me and against my interests.

Rhywun|10.24.07 @ 2:34PM|#

A little hard on the eyes?! Somebody needs to tell these people that folks over 30 drink wine too.

|10.24.07 @ 2:40PM|#

Unfortunately, it is not nearly as snazzy as the Arizona wholesalers' effort, and the thin white-on-black type is a little hard on the eyes.

Seems that a reasonoid techno-geek (you know who you are) should offer their services. Help the cause and make some $$$. Now, that's Libertarianism!

Tom Wark|10.24.07 @ 4:09PM|#

"The 21st amendment to the US Constitution specifically allows states to regulate the import of alcoholic beverages. I'm not saying state-imposed restrictions make sense, just that the rules have to be changed on a state-by-state basis or by amending the US Constitution."

The Supreme Court has been clear that that th 21st Amendment does not trump the Commerce Clause. The two are parts of the same constitution and must be balanced against one another. That balance, according to the Supreme Court, is to allow states to set the regulations they desire for wine shipping, but they must apply those regulations equally for in-state and out-of-state shippings.

That means, a state may not allow its in-state wine retailers to ship to residents but prohibit out-of-state retailers from doing the same.


"It's not all that, "refreshing to see a business group standing up for freer competition," when it's completely in their favor."

If regulations were "completely in their (out-of-state retailers) favor, then the law would ONLY allow out-of-state retailers to ship wine to consumers in a state. Retailers are only arguing that the rules ought to be the same for in-state and out-of-state shippers. In the end, this policy is above all consumer friendly.

Tom Wark
Specialty Wine Retailers Association

|10.24.07 @ 4:57PM|#

Aw crap. I'm always late to the orgy.

|10.24.07 @ 5:11PM|#

It's not all that, "refreshing to see a business group standing up for freer competition," when it's completely in their favor.

I really don't see any downside to SWRA's efforts here. Sure, they have a dog in this fight, but so what? We don't expect altruism from businesses. Like Tom & Dave said above, there are at least two anticompetitive positions that they could have taken that would be even more favorable than the pro-competitive position that they're advocating.

I also just glanced at Granholm v. Heald (the Supreme Court decision invalidating a law discriminating against out of state wineries), and I can't fathom why this would apply any less to retailers than wineries.

|10.24.07 @ 5:31PM|#

Reminds me, is there a "Reason" or "Libertarian" wine or beer or spirits?
You know have a great dinner and top it off with a reasonable chardannoy called "Reason".
Or for those deep talks over football and bikinis, help yourself think and talk with Reason beer.
I think there might be something there.
Marketing?

|10.24.07 @ 5:33PM|#

JW posted, "Aw crap. I'm always late to the orgy."
Nothing personal, but your hand is one I definitely don't want to shake.

The Wine Commonsewer|10.24.07 @ 6:05PM|#

Thanks Jacob.

SIV|10.24.07 @ 7:15PM|#

Most people who live in monopoly alchohol distribution States have no idea that there is such a system in place- Government licensed privately held wholesalers with exclusive rights to distribution of selected products within selected regions. These "family businesses" are owned some of the wealthiest people in the State.

Most people don't know that you can go to Federal prison for growing and selling Fed subsidized food crops without a license either.

Most people think we have a free market system, lightly regulated to promote fair competition, consumer safety and a clean environment.

Most people are cluelessly wrong.

|10.25.07 @ 10:04AM|#

Reminds me, is there a "Reason" or "Libertarian" wine or beer or spirits?

Reminds of the fusion-powered railgun (DU slugs, natch) in "Snow Crash" code-named Reason (as in "I'm sure they'll listen to Reason").