30,000 Cases And You Are Good To Go
In the never-ending direct shipping wars, the anti-consumer side (wholesalers) has taken up a new strategy to protect their previously legislatively-favored position. In various states, as legislators and consumers wise up to the notion of free trade, wholesalers are attempting to convince lawmakers to allow direct shipping of wine to consumers, but only by smaller wineries. They want to exclude large wineries from shipping direct to consumers.
In Massachusetts the wholesalers have suggested and the House is considering a bill that would allow direct shipping of wines from anywhere in the country by wineries that make 30,000 cases of wine annually or less.
Somehow, legislators have been given the idea that if BIG wineries are able to ship direct, fewer people will head off to liquor and wine stores to buy low priced wines and this will cut into the retailers’ and wholesalers’ business. Leaving aside the idea that retailers and wholesalers should somehow be protected from competing in a free market, the idea that large wineries shipping to consumers is simply silly.
The fact is, MA’s retailers are going to lose more business as a result of small wineries being able to ship direct to customers. People don’t buy $10 wines over the Internet. It’s far more convenient to purchase these wines at the local grocery store. However, it’s those $20 and up wines that people are willing to buy on-line. It’s the hard to find wines from small wineries that, while they may be distributed in MA in small quantities, people are willing to search for on the Internet.
That said, it strikes me that not allowing a 45,000 case or 1,000,000 case winery to ship direct bumps up against the admonition in the recent Supreme Court ruling that laws respecting direct shipment of wine need to be fair and equal across the board.
If I was a 50,000 case winery that also happened to make, say 500 cases of a single vineyard Syrah, I’d be pretty upset that I couldn’t sell direct to MA customers, but my competitor down the street, who makes 30,000 cases of Central Coast Cabernet is allowed to ship to MA. Great. More lawsuits.
Part of the problem, and the reason why legislators entertain these anti-competitive and anti-consumer proposals is that they simply are not educated on the issues at hand and how the wine industry works. If they are educated, it’s likely an education delivered by the wholesalers, who have, shall we say, a skewed perspective. It’s highly likely that entities like The Wine Institute, Free The Grapes and Wine America may also be doing a bit of education. But it’s hard to compete with the kind of teachers who are also offer campaign donations along with their course materials.