This is the second in a series of columns on wine shipping laws in the Southeast. To read the first in the series, go to www.weeklyplanet.com.
Who said a simple product like wine can't be juicily controversial? In our age of free trade and monopoly hunters, there's a quiet yet tantalizing consumer wine revolution on the horizon. The two warring factions are the powerful wine wholesalers who control which wines enter our states, and the insatiable consumers desiring access to all wines through direct shipping.
Here's the scenario: By current law, wineries must employ a wholesaler to distribute their wines in each state. This necessary relationship facilitates the collection of taxes and controls underage drinking. In addition, most wineries can't handle the marketing and administrative costs necessary to distribute their products, so wholesalers provide a valuable service. But the anti-competitive buzzer goes off when small boutique wineries don't merit a wholesaler's representation. Currently, these wineries have no recourse for distributing their product except direct shipping. But wholesalers, who pick and choose their clients, can legally block their wine from entering the state. So consumers seeking access to the boutique gems are taking action.
Enter the lawyers. For the past five years, several state circuit courts have been tackling the direct-shipping issue, and the horizon is changing. This year alone, three separate courts — in Texas, North Carolina and Virginia — have ruled the prohibitions against direct-to-consumer wine shipments unconstitutional. Lawsuits in Florida, New York and Michigan are pending.
The other party in the courtroom is the Wine and Spirits Wholesalers of America (WSWA), a strong lobbying group. The WSWA fights to keep the laws intact because it believes the system necessary. But the trade group really doesn't want anyone messing up its sweet, anti-competitive deal. Here's its official hard-line stance (from www.wswa.org): "Illegal direct shippers bypass state alcohol control systems and the Three-Tier System to evade state and local excise taxes … In so doing, they deny states and localities excise and sales tax revenue, and provide minors with a new avenue for circumventing the law and illegally obtaining alcohol."
That's a load of bull. When was the last time you saw an 18-year-old order a $15 bottle of Cabernet? Besides, shippers like UPS and FedEx use a system of ID verification when delivering alcohol. And the wine industry has already presented solutions to the tax-collecting issue.
Local wholesalers take a softer stance. Although they don't support eliminating the law since they feel it will cut into their business, they show heart when it comes to the little guys. Michael Miller, of National Distributing Company in Florida, thinks wineries without wholesaler representation should be allowed to direct ship, but he strongly feels that maintaining the current law will protect vulnerable retailers and restaurateurs whose livelihoods depend on continued consumer interest. He supports Georgia's solution to the problem, a law passed in 2000 that allows five direct-shipped cases of wine per year, provided the wineries don't already have wholesale representation.
Unfortunately, Georgia's solution is messy. Jeremy Benson, executive director of Free the Grapes (www.freethegrapes.org), the watchdog for wine commerce legislation, feels the WSWA heavily influenced the crafting of this new law, making it so complicated that no winery feels safe shipping to Georgia.
If this scenario sets off your anti-competitive antennae, then do something about it. Call or write your congressman. Freethegrapes.org will direct you to the most effective means to get heard. Until then, the war continues.
E-mail Corkscrew at corkscrew@creativeloafing.com, write to 1310 E. Ninth Ave., Tampa, FL 33605, or fax 813-248-9999.
This article appears in Sep 25 – Oct 1, 2002.
