Abraham Lincoln Was Right About Wine Laws

BadLawA Pennsylvania lawyer was recently sentenced to probation and community service. His crime? Obtaining fine wine outside of the Pennsylvania state liquor store, then selling a portion to a small list of other wine loving individuals who, like the lawyer, were unable to obtain these wines locally. They were operating on the Black Market.

In addition to the probation and community service, the lawyer also had his 2,400-bottle wine collection confiscated from his home. The wine is set to be destroyed as “contraband”. The estimated value of these wines is $125,000.

The real problem for Pennsylvania is that it collected no taxes on these wines. Nor did it collect any mark-up on these wines since they were not purchased through the state-run wine stores. Of course it never could have collected mark up on these wines because they were never sold via the state system.

However, had the perpetrator been legally able to purchase these wines and have them shipped directly to him from an out-of-state winery or retailer, the state would have collected $6,000 in sales tax, instead of surely spending 1000s of dollars to put together the sting to catch him and process him.

It’s highly likely that the current effort headed up by Pennsylvania governor Tom Corbett to privatize the Pennsylvania state wine story system will fail. It’s also likely that Governor Corbett will not be re-elected, making future attempts to reform this out-dated, inefficient system unlikely for some time. The only way, under these circumstances, that Pennsylvanians will ever see better access to fine wine is if they do two things:

1. Decriminalize the transport of wine into Pennsylvania from another neighboring state.

2. Legalize direct to consumer shipment from out-of-state wineries and retailers.

There is no doubt in my mind that the State of Pennsylvania is currently losing 100s of 1,000s of dollars annually on tax revenue not collected from the direct shipment of wine. This particular lawyer is surely the tip of the iceberg.

Whenever you have in place laws such as the ban on direct shipping that make sense to absolutely no one except the commercial interests they are in place to protect, the citizens of the state give no respect to the laws and have no problem breaking those laws. It isn’t even a matter of good old-fashioned civil disobedience. It’s just a matter of the state and it’s lawmakers bringing down disrespect for the process and for the law by choosing to protect a very small set of special interests at the expense of its citizens.

The direct-to-consumer shipping channel will open up in Pennsylvania. Of this I have no doubt. In fact, the more frequently these prohibitions are enforced by the state, the faster they will be repealed. When it does, the state will gain respect from many who no longer respect its laws or law making process and will also collect a boatload of tax revenue and won’t have to spend thousands of dollars taking down the very scary wine lovers in its midst.

 


11 Responses

  1. Why Pennsylvania Liquor Control Is Doomed | 1 Wine Dude - September 2, 2014

    […] Back to Goldman: he was given the legal equivalent of a slap on the wrist for his crimes. I am not advocating breaking the law, which by all accounts Goldman did by selling those impossible-to-find-in-PA wines. But I think it’s telling that the guy was barely punished for this infraction, which in the grand scheme of things is quite minor. I think that light punishment also recognizes that this sort of “underground” market for products that PA wine lovers cannot get easily or at a fair price, or even not legally – despite the fact that they could legally obtain them in neighboring states – is a function of the antiquated PA liquor laws themselves clashing head on with the free flow of information in the d…. […]

  2. Jeff Kralik - September 2, 2014

    Tom, being a wine-loving resident of the Commonwealth of Pennsylvania, I sure hope you are correct, but I do not see it on the horizon. As you mentioned, Corbett will likely lose this November and as far as I know, privatization has never been mentioned (much less championed) by any Democrat. The fact that Corbett and his cronies could not get it through a Republican controlled legislature adds to my skepticism.

    The fact is, there are already retailers that will happily ship to the state (WTSO, Last Bottle, Wine.com, etc.) since they know (I assume) that the current state law prohibiting such shipments is unconstitutional (based on Granholm almost a decade ago).

    Smaller producers, however, still refuse to ship to the state, which is most unfortunate since these are wines that are impossible to get through the PLCB.

    I am not sure if by tacitly allowing shipments (or more likely, the state’s own incompetence) the state is quieting some critics or not, but for whatever reason bills that have been proposed under the Corbett administration have gone nowhere. With his Democratic opponent the likely winner in November, it will be at least another four years before it is even mentioned again.

  3. Thomas Pellechia - September 2, 2014

    Jeff:

    Under Granholm, if a state allows its wineries to ship direct to consumers than it must allow out of state wineries to do the same. Other than that, the state can prohibit or allow shipments from out of state wineries.

    As far as I know, Pennsylvania allows shipping from out of state provided the winery gains a direct shipper license from PA, the wines are not available already in PA stores, and the shipment has to go to PA stores for consumers to pick it up.

    Based on Granholm, I assume that PA wineries must follow the same route.

    I think that some in PA are pushing for direct shipment to consumers’ homes from any out of state or in state winery, at least that’s what they should be pushing for.

    The fact that this guy is a lawyer may have something to do with slap on the wrist punishment.

    • Jeff Kralik - September 2, 2014

      TP,

      You said: “As far as I know, Pennsylvania allows shipping from out of state provided the winery gains a direct shipper license from PA, the wines are not available already in PA stores, and the shipment has to go to PA stores for consumers to pick it up.”

      As far as I know, that is not the requirement when buying wine from a PA winery. From the Penns Woods Winery website:

      “** Call to have wine shipped to your door! 610.459.0808 — FREE SHIPPING ON ORDERS OVER 2 CASES! **”

      This is certainly not the case with any out of state winery.

      Would you not say that is in violation of Granholm? I sure would…

      • Thomas Pellechia - September 3, 2014

        Jeff:

        By the way it is worded, it;s easy to misread the Penns Woods website. I believe that statement refers to wine shipments to other states, not within PA.

        If they do ship within PA, they are violating PA rules.

        • Jeff Kralik - September 3, 2014

          Thomas.

          At a recent event, I asked them if they could ship to me. The response? “Oh yes, no problem at all.”

          Who knows what that really meant, but….

  4. Pawineguy - September 2, 2014

    Tom,

    Why don’t you name the special interests to whom you allude in red above? How could you write a post like this and leave that detail up to the imagination of the reader?

    And why is it so hard to note, as Jeff does, that the Democrats in PA are the roadblock legislatively?

  5. Pawineguy - September 2, 2014

    It should also be noted that the current effort failed not because it was headed up by Tom Corbett (it was led by Mike Turzai), but that it failed due to a total lack of leadership on the issue by Tom Corbett.

  6. Tom Wark - September 2, 2014

    PA…

    Unions have been very active in attempting to block any privatization. However, I’m not sure they’ll work so hard to block direct shipping.

  7. pawineguy - September 2, 2014

    They are active in making sure that “Direct Shipping” actually means shipping the wine to a local store, only when not currently available in the state, and requiring an affidavit being signed before you can leave the store. I’ll ask again, who are the special interests you reference above in red?

  8. Tom Wark - September 2, 2014

    PA,

    I think the votes are there for real direct to consumer shipping, the kind that allows wine to be shipped to a home and whether or not it is sold in a state store.

    Did I not mention unions above?


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