Wine Consumers' Grape Expectations
| By DAVID WHITE
Imagine if your state legislature, in a bid to protect mom-and-pop bookstores, barred Amazon.com from shipping into your state. Or if a local town council, worried about local dairy farmers, prohibited grocers from selling milk. Or if lawmakers banned the sale of potato chips and candy bars on Sundays in an effort to shrink our waistlines.
Such moves would be infuriating. But wine consumers face such restrictions daily.
A whopping 36 states prohibit consumers from ordering wine from out-of-state retailers. Eleven states forbid residents from ordering wine from out-of-state producers. Seventeen ban the sale of wine at grocery stores. Many prohibit Sunday wine sales.
Like virtually all of America's liquor laws, these prohibitions trace their origins to the temperance movement. Today, these laws harm consumers and serve no purpose beyond enriching special interests. Fortunately, the tide appears to be turning in the fight for wine consumers' rights.
When Prohibition was repealed in 1933, states were given the authority to regulate the "transportation or importation" of liquor within their borders. At the insistence of a motley crew of interest groups, states proceeded to impose all sorts of rules. A top priority was weakening producers.
Before Prohibition, many bars were owned by brewers or distillers. Temperance advocates blamed these bars for many ills associated with drunkenness and believed that keeping producers away from direct sales would help keep people sober. Law enforcement, too, pushed to weaken producers, as during Prohibition, organized crime controlled much of America's liquor supply.
Lawmakers answered these calls in one of two ways; they either assumed complete control over the sale and/or distribution of alcohol or they created a wholesale tier-essentially, an artificial middleman-to sit between producers and retailers.
Studies indicate that state wine monopolies-especially at the retail level-result in fewer choices and higher prices. Such monopolies should disappear soon. In November, Washington citizens voted to privatize liquor sales. And in Pennsylvania, calls to privatize the state monopoly are getting louder.
Requiring alcohol to pass through wholesalers also results in fewer choices and higher prices. The wholesaling industry, naturally, profits from this system; to protect its profits, it's friendly to politicians-from 2006 to 2010, wholesalers spent more than $82 million on state and federal campaign contributions and lobbying. This makes sense. Without a regulatory structure that literally forces producers to utilize wholesalers, many producers would cut out the middleman.
Fortunately, consumer support for this system has been waning since the 1990s, when Americans started developing a taste for boutique wines and became able to find them online. In January, New Jersey became one of the last states to legalize direct-to-consumer wine sales.
Most states continue to prohibit shipments from out-of-state retailers, but this could soon change. In late 2010, the Specialty Wine Retailers Association asked the Supreme Court to chime in on a Texas law blocking out-of-state retailers from shipping into the state. The Court refused to hear the case-thus cementing the Texas prohibition-but the effort generated enormous interest and support.
Efforts to legalize supermarket wine sales also are gaining steam. These laws are kept in place thanks to lobbying from existing wine retailers, who like being shielded from competition. In New York, Tennessee, Colorado and elsewhere, consumers are banding together to fight for the right to pick up wine with dinner.
Bans on Sunday sales are yet another relic of the temperance movement-they were promoted to keep the Sabbath holy and protect churchgoing business owners from competition. But they don't make sense. Consumers should be able to purchase wine and beer every day of the week.
The United States is the world's largest wine-consuming nation, but many of our liquor laws are antiquated and only supported by the special interests that profit from their continuation. Consumers deserve a free market in wine.
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