Wine Bar

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A new Federal Trade Commission study suggests what consumers miss when states stop them from buying wine online. Ohio State political scientist Alan E. Wiseman and economist Jerry Ellig, acting director of the FTC's Office of Policy Planning, checked out the prices and selection at wine stores in the McLean, Virginia, area. They report:

?Our results indicate that Virginia's direct shipment ban reduces the varieties of wine available to consumers and prevents consumers from purchasing some premium wines at lower prices online. Using a sample of 83 wines judged to be "highly popular" in Wine and Spirits magazine's annual restaurant poll, we find that 15 percent of wines available online were not available from retail wine stores within 10 miles of McLean during the month the data were collected….? We also find that the lowest quoted online price offered significant cost savings over the lowest local retail price in our survey for many types of wine during the month the data were collected.

The FTC study reinforces the case against direct shipment bans, which have been challenged in federal court as violations of the Commerce Clause. Virginia's own ban, which a federal judge found unconstitutional last year, has been repealed, effective July 1.

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  1. It’s not a violation of the Commerce Clause. It’s a violation of the “Dormant Commerce Clause.”

    The Commerce Clause gives Congress the power to regulate commerce between the states. This has been extended into a power to regulate most things that are “in commerce.” The dormant commerce clause forbids states from imposing unfair burdens on commerce relating to other states. For example, a state could not impose a tax on out-of-state produced milk sold in-state, while leaving in-state produced milk tax free.

    Please, get yer commerce clause doctrines straight.

  2. I’ve never lived in Virginia, so fill me in: is wine sold in private wine shops, supermarkets, etc., or is it sold in state-run stores a la Pennsylvania?

    States that want to collect stiff taxes on alcohol could probably do so by requiring that the tax be paid on out-of-state purchases. Not easy to enforce on carry-ins, but pretty doable with regard to mail-order and the web.

    If Virginia doesn’t have any appreciable tax on wine, it’s pretty hard to make a case for this as anything other than interstate protectionism, which is (as pointed out above) pretty much forbidden by federal law.

  3. Get off the online-wine-purchases subject, will ya?! It gets old after a while, and any sane rational person knows not to purchase alcoholic beverages over the Internet if they wish to succeed in this life.

  4. Everyone knows that on-line purchases of wine causes terrorism.

    “You killed me.”

    “Er, what?”

    “You bought that wine on-line. Without the wine, no terrorism. Its the wine.”

  5. I’m not sure how a commerce-clause challenge can succeed, considering the twenty-first amendment:

    The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.

    That is, states can regulate the transportation etc. of alcohol without any constitutional objection.

    The whole reason prohibition had to happen via constitutional amendment was the commerce clause, and repeal fixed that bug (if bug it was) so that states could regulate alcohol without commerce clause challenges.
    –G

  6. Mr. B, please avert your eyes, because I am about to talk about online wine purchases again. The constitutional argument is that the 21st Amendment authorizes only bona fide regulations aimed at limiting access to alcohol. In the Virginia case (and in several other states), a double standard for intrastate and interstate shipments made it clear that the real aim of the ban was protecting local businesses from competition–just the sort of thing the Commerce Clause was supposed to prevent. That was the argument the judge found persuasive.

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