Cut It Out, Middlemen

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The Arizona legislature is considering how to comply with last year's Supreme Court decision overturning laws that permit direct shipment of wine to consumers by in-state wineries while barring such shipments by wineries in other states. Arizona's small wineries, which depend on direct sales, want a law that allows Arizonans to buy wine online from vintners across the country. Arizona's alcoholic beverage wholesalers, which depend on government-mandated indirect sales, want online sales banned altogether. They think all producers should be forced to sell through them–for the good of the community, of course. The Web site of the wholesaler-backed "grassroots" Protect 21 Coalition (to which The Wine Commonsewer pointed me) makes no mention of this financial interest, although it does offer at least one protectionist rationale for banning online sales: The competition will hurt mom-and-pop liquor stores, which need a legally guaranteed "level playing field" that, among other things, restricts volume discounts and keeps prices artificially high.

Protect 21's main argument, however, is the one used by wholesalers in every state that has considered allowing direct shipment: that online wine sales make it impossible to verify that purchasers are 21 or older. Never mind that, in the quarter century during which Arizona has allowed direct sales by in-state wineries, there apparently has not been a single documented case in which teenagers have gotten loaded on wine they ordered by phone or online. And never mind that you generally need a credit card for such purchases, which the average teenager does not have. The bill legalizing online sales requires delivery companies to check ID and get a signature for wine shipments, which provides the same assurance of compliance with the drinking age as over-the-counter sales do. The wholesalers' have no real response to that, except to speculate that the requirement won't be enforced.

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  1. Credit Card? A Visa gift card would work, and anyone can get one of those.

  2. Never mind that, in the quarter century during which Arizona has allowed direct sales by in-state wineries, there apparently has not been a single documented case in which teenagers have gotten loaded on wine they ordered by phone or online.

    Of course there hasn’t, how many teens can afford a case of high end wine? It’s not like small wineries are shipping Bukov vodka, or Natural Light or any other cheap liquor that we drank as kids.

    I wonder how many nanny state laws are just businesses trying to eliminate competition dressed up in “for the children” or other “moral” arguments?

  3. David,
    I’m prety sure the answer is “all of them”. A lot of the people backing these laws probably do so because they’ve been convinced that it really is better “for the children”. But I would wager that in virtually every case there is someone with a financial interest that started the whole thing.

  4. I lost the link, but I read an article a while back that talked about how most government regulation was initiated by businesses trying to eliminate competition, mostly during the industrial revolution/westward march/railroad days.

  5. Florida had a law in place for almost 40 years that forbade the selling of beer unless it was in an 8, 12, 16 or 32 ounce container. Any brewery that had the nerve to use the metric system, or fell out of line and picked an odd size was out of luck. According to the beer wholesalers it was to protect the customer. These motherfuckers could not even pretend it was for the children and yet they reaped oligopoly prices for decades.

  6. State liquor laws are the original dog’s breakfast of rent-seeking and special interest protection. See and try to understand Pennsylvania, for example.

  7. This is bullshit. I live in Arizona, and I recently conceled my subscription to a “beer of the month” club largely because of the current headaches of dealing with the age restriction. The courier could not drop it at my house during the day unless an “adult” (i.e., 21+) was there to sign for it–which they never are, what with my wife and I working…imagine that!–so the only way I could get it was to have it shipped to my work. This was a pain, because I then had to lug a substantially heavy box home myself once a month, not to mention the occasional eyebrow that got raised by me having a package with “THIS CONTAINS ALCOHOL! DO NOT DELIVER TO ANYONE UNDER 21 OR ANYONE WHO APPEARS INTOXICATED!” stamped all over it.

    I don’t know if this is mandated by current state law, or was just the company covering it’s ass–but either way, clearly mail-order booze is not the easiest way for underage “kids” to get hammered in this state.

  8. the easiest way for underage “kids” to get hammered in this state

    Duh, get a fake ID. An Arizona girl who had just turned 21 recently showed me hers, which she said she’d been using for 2+ years. She didn’t seem particularly swift to me & I doubt she’s got friends in Al Queda’s document forgery labs, so I can only guess that fake IDs are well within the reach of your average 18 year old, at least here in Phoenix.

  9. Related topic in today’s Chicago Sun-Times:

    http://www.suntimes.com/output/business/cst-fin-wine08.html

  10. So, um, let’s see…

    Why are the laws requiring the delivery agent to check ID any less likely to be enforced than those requiring the clerk at the liquor store to do so? One would assume that most UPS delivery guys can’t afford the $2500+ fine that comes along with delivering to a minor—nor the subsequent firing that would result. I work part-time at a wineshop (for the discount), and I don’t dare fuck around with the ID requirements. I’ve ended up ID’s people that were born in the 1960’s, but I’d rather have that small moment of embarassment (some actually take it as a complement) than have to pay $2500 in fines, plus court costs, and have my employer fire me because he has to pay $10,000 in fines too.

    Why would a lowly UPS driver be any less likely to abide? What a fucking weak argument. Is that the best they can do? Come on, guys! That’s just pathetic.

    Meanwhile, I’d love to see the situation where a teenager has better odds of the UPS guy just happening to be a slacker, instead of just getting the local corner-store drunk to buy it for you while you wait in the parking lot. Not to mention that most internet wine sales are for higher-end stuff, which requires actual substantial money, and not the change in the couch cushions that Natty Light costs.

  11. Doug:

    The fake IDs here in AZ are better than the real ones. The number of 17- to 20-year-olds in any given bar is amazing.

    Yet another reason I laugh when people act like a national ID card will protect us from the terrorists.

  12. Whether it is casket makers, liquor distributors, real estate agents or car dealers, there is real money to be ripped off at the state level. There are entire classes of people who depend on state regulation to exist because there would be no need for there services if the market were allowed to function properly. There is no reason why I shouldn’t be able to go to Ford or Honda dot com and buy a car directly over the internet and have it shipped to my house. The only reason I can’t is that car dealers across the country have gotten state legislatures to ban the direct sales of new cars over the internet. There are hundreds of examples of the public having to pay what amounts to a tax in the form of higher prices to support the local politically connected business. There is a lot of talk on here about bringing back Lockner and restricting the federal commerce clause. Before we do that, I would like to see the dormant commerce clause be rejuvenated and an end put to state interference with interstate commerce.

  13. The concern about kids buying wine online is like the arguments I heard here in North Carolina last year from people who wanted to keep the 6% alcohol cap on beer. The social conservatives were all aflutter at the notion that teenagers would gravitate towards imperial stouts and tripels for their binge drinking, never mind that (a) they’re too expensive for even the average adult to afford getting trashed on, (b) they check IDs for high-alcohol beers just as they do for Schlitz, and (c) cheap tequila is still the quickest way to get drunk.

    (In a shocking development, we got the cap overturned, and I can now legally drink high-end beer that I didn’t brew myself. I’m still reeling at the decision by a legislature to allow citizens MORE freedom. I wish Arizona the same luck.)

  14. fake IDs here in AZ are better than the real ones.

    Heh…funny you mention that. I once had a bartender in another state question the validity of my AZ ID because it expires in 2042. He nearly confiscated my “fake” until I managed to produce nearly everything in my wallet as corroborating evidence.

  15. It’s not as if the small in-state wineries hands are totally clean here. The laws overturned by last year’s SCOTUS decision sure sound like a protectionist racket on behalf of the small, in-state wineries trying to eliminate competition from small, out-of-state wineries. Now that plan A has been thrown out, they are falling back on plan B, which should have been plan A to begin with.

    Just to clarify my position, the wholesalers are a bunch of crooks. The big difference between them and the small wineries is that the wholesalers are succesful crooks. So far. Godspeed to HB 2500, and a pox on HB 2697 and all its progeny.

  16. In my experience, UPS asks for ID when delivering something that says “must be 18+” on it – I’m sure that will work with “21+” stickers as well. This is how I get all of my ammunition.

    Granted, state law requires a firearms dealer to check my license and fingerprint but UPS does not do this, so they don’t follow state law in that sense, but the ID check is something they’ve been doing forever, so I don’t think that argument holds any water in this case.

    BTW – I now rent a mailbox (not from USPS), so the UPS guy is required to ask the folks working there for ID. If you want to get your beer of the month delivered when you’re not home, this is a fairly cheap way to do it. Plus, if they ever get around to sales taxing you based on the ship to address and not the seller’s address, a personal mail box in NH (or any other sales tax free state) would work for that too…

  17. When I order ammo, UPS just drops it off on my porch.

  18. Exactly the same situation as in Michigan (which, I believe, may have been the test case for the Supreme Court decision). In any case, the result here was a compromise between the in-state wineries and the politically connected, rent-seeking scum distributors whereby direct shipments are allowed but only up to limited number of cases of wine per year per winery.

  19. State liquor laws are the original dog’s breakfast of rent-seeking and special interest protection. See and try to understand Pennsylvania, for example.

    PA and South Carolina are ridiculous. South Carolina liquor law dictates that you can’t have an open pour – that’s why they have the little airline bottles everywhere behind the bar.

  20. Heh…funny you mention that. I once had a bartender in another state question the validity of my AZ ID because it expires in 2042. He nearly confiscated my “fake” until I managed to produce nearly everything in my wallet as corroborating evidence.

    After you paid, you should have said “ha ha, I gave you a fake $10 bill!”

  21. South Carolina liquor law dictates that you can’t have an open pour – that’s why they have the little airline bottles everywhere behind the bar.

    I think that was recently overturned.

  22. I think that was recently overturned.

    If so, it was very recently. What about their laws that prohibit individuals from buying jug wine, but allow restaurants to do so?

  23. Off topic:

    I see a bunch of AZ folks in this thread, so I post this website: Tupper06

    I just met the guy…he’s running for governor on the Republican ticket. I’m not asking anyone to run out and vote for him in the primaries (or however that works) because I don’t even know if I will, but he’s at least someone to check out.

  24. I miss you guys……….interesting observations.

    Brian, the lifetime licenses is one thing Az does right. Funny story.

  25. When I was living in Virginia, I ordered one of those wine clubs for my wife, not realizing I’d have to sign for the wine when it was delivered by UPS. Pain in the ass. And they won’t let you sign a release–you have to have it delivered where you can sign for it. So, yes, UPS does enforce the rule (and can you imagine the penalties it would face if it didn’t?) so there’s really no argument there. UPS does what it is told.

    But this whole thing is ridiculous. Online sites use credit cards for age-verifying other “adult” entertainments, so why is it good enough for porn, but not for booze? There is no reason. It’s about protecting local financial interests, and in some cases, profitable state monopolies on liquor distribution. Hell, I’d be a lot happier if I could price alcohol online like I can nearly every other product on the market. But that’s not an option.

  26. What a bunch of idiots the wholesalers are. You’d think that one of them, just one, would figure out that internet sales would open a huge new market for somebody with, say, a warehouse full of low-cost booze and no storefront.

    good enough for porn, but not for booze

    There’s just so . . . much packed into that.

  27. Try these guys for your up to date news and contacts.

    Free the Grapes

    They were hugely informative when we were going through our Florida wine adventures and they cover the wholez country, legislature by legislature, bless their hearts.

    Best of luck in your good fight!

  28. I always thought the age enforcement argument was laughable. Who are you going to trust more, someone who’s making $9 / hr working retails 30 hours a week or the FedEx delivery person who’s making $65k / yr + benies? Who has more invested in not getting fired for checking IDs?

    In Minnesota some cities still own their own liquor stores. Last summer Lakeville PD ran a sting and busted some employees of the city’s liquor store selling to minors. THEIR OWN CITY EMPLOYEES WERE SELLING TO MINORS.

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