Alcohol Wholesalers Protect Maryland's Communities From the Horror of Online Wine Sales

Last month I noted that legislators in Maryland, one of nine states that ban all direct-to-consumer shipments of alcoholic beverages, were considering a liberalization bill that would have allowed shipments by out-of-state wine retailers (including auction sites and wine-of-the-month clubs) as well as wineries. Although the bill was supported by bipartisan majorities in both houses of the legislature, wine blogger David White warned that the retailer provision might still be removed under pressure from the state's politically influential alcohol wholesalers. That is just what happened in the end, White reports in a letter to The Washington Post. The version of the bill approved last week applies only to wineries. The wholesalers, who oppose any measure that threatens the artificial profits they earn as state-appointed middlemen, claimed to be taking a stand for mom-and-pop liquor stores. Bruce Bereano, a lobbyist for the wholesalers, told the Post the original bill would "harm in-state liquor stores that are family-owned and part of the fabric of communities." To which White replies:

Bereano is right, of course, as the bill would force in-state liquor stores to compete against out-of-state retailers like K&L Wine Merchants, Wine Library and hundreds of specialty retailers. But that doesn't make his argument any more legitimate.

Maryland's mom-and-pop bookstores have to compete with Amazon, and Baltimore's trendy shoe boutiques have to compete with Zappos. If Maryland lawmakers decided to prohibit residents from ordering books, shoes or other wares online, they'd be laughed out of office. And voters — stuck with fewer choices and higher prices — would be infuriated.

Yet this is exactly what's happening with wine. Whether you're a wine snob, a beer swiller or a teetotaler, this should make your blood boil. It's protectionism at its worst, and it's crushing consumer choice.

The rationale for treating wine differently from books and shoes is that public health and safety require special regulations for alcoholic beverages, a premise reflected in the 21st Amendment. But when the motive for the regulations is explicitly anti-competitive, as it is in this case, that argument carries no weight.