A Not-So-Modest Wine Proposal for 2006

Proposal: Force Wholesalers To Buy Every Single Bottle of Wine in Monopoly States

Across the country from Washington State to Arizona to Kentucky to Indiana and elsewhere we are going to see truly consequential political battles in 2006 over who can sell wine to whom.

At issue is the fact that many states allow their wineries to sell directly to retailers while out of state wineries are not allowed to. After the Supreme Court decision in May that slapped down NY and MI’s discriminatory laws that had in-state wineries shipping to consumers but stopping out of state wineries from doing the same, most lawmakers conclude that discriminatory regulations simply won’t fly, whether they apply to retailers or consumers purchasing the wine from wineries.

In 2006 wholesalers across the country will attempt to have laws passed that FORCE wineries to sell their wine to wholesalers if the wineries want their bottlings on retail shelves or restaurant menus.

FORCE them to use a Wholesaler.

This would mean: 1) significantly lower profits for the wineries, 2) loss of control of their branding and marketing, 3) probably far fewer sales of their wine, and 4) the likely demise of many small wineries across the country.

So I have a question…

If Wineries are to be FORCED to use wholesalers to get their wine to market, shouldn’t wholesalers be FORCED to represent the wineries?

In fact, shouldn’t wine wholesalers be FORCED to buy every single bottle of wine produced by wineries in states where it becomes illegal for wineries to sell to retailers and restaurants themselves?

Just a little question for wineries, wholesalers and lawmakers to consider as they all gear up to fight this battle in 2006.

The issue in Arizona
The issue in Kentucky
The issue in Washington State
The issue in Indiana

Posted In: Shipping Wine


4 Responses

  1. Dave Butner - January 4, 2006

    What a stupid suggestion!
    What is more relevant to wine drinkers is how these laws will affect them and their local wineries.
    Here in Washington state, Costco just won a suit where the court ruled it a violation that local wineries can sell directly to them, but out of state wineries must go through a distributor.
    The state Liquor Control Board now has until April to sort this out.
    What you may not realize is that they have two options – 1) is to let all out of state wineries sell directly. 2) is to make the locals use distributors.
    The easiest way out for the legislators is option 2 which will be a blow to the small wineries and consumers.

  2. tom - January 4, 2006

    Perhaps you misunderstood my position. I believe than any other decision by the legislature in Washington other than opening up direct sales to all wineries, in state or out, is really just wholesaler protection.
    That said, if the legislature fails to act, which would cause a closing down of self distribution by WA wineries, or if the state legislature chooses to protect the wholesalers and force all wineris to go through distributors, then I want the wholesalers to also be forced to purchase every single bottle of WA wine that WA wineries woudl like to sell to them.

  3. Dave Butner - January 5, 2006

    I’m not sure what you mean by “wholesaler protection”.
    If they rule to open up direct sales to all wineries, in-state or out, that is beneficial to both the wholesaler and the wineries because it cuts out the middleman.
    Any other decision is NOT beneficial to either, so I don’t see where your “wholesaler protection” comes from?
    Of course your idea of FORCING the wholesaler to buy every type of wine made I am sure is somewhat tongue-in-cheek, no?

  4. tom - January 5, 2006

    When I refer to “Wholesaler protection” I mean any law that gives favorable treatment to the wholesaler/distributor tier of the wine industry. By stating in law that wineries must sell their wines only to a wholesaler/distributor in order to have it placed in a restaurant or retail establishment you have a severe case of protectionism for the wholesalers/Distributors.
    That said, if this were made law, I honestly would like to see someone suggest that the wholesalers be FORCED to purchase all wines from any winery that asks since WA wineries would no longer be allowed to sell direct to retailers and restaurants as they have been for years.

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