The Wine Shipping War is over….BUT..

You know that whole battle between distributors of wine and wineries?   That one that has the wineries wanting to be able to ship and sell their wine direct to customers while the distributors don’t want any direct sales to happen? That one?

It’s over.

Between last year’s supreme court victory, the number of states that have given in and allowed direct shipping and the seemingly ongoing self mutilation the distributors have engaged in as they try to convince us that 16 year old want to buy Chateau Lafite the who battle is over. Direct shippers win. the battle of ideas is clearly over on that front. What’s left is for the battlefield to be cleaned up as more states open their borders and retailers be given the right to sell direct just like wineries have.

However, distributors across the country have their eyes on a new prize: putting as many small, family-owned wineries out of business.

The plan to do this is centered around distributors’ attempts to get states to take away wineries privilege to "self distribute": sell wine directly from the winery to the retailer and restaurant without using a wholesaler. Many states grant wineries this right. However, if the distributing middle men have their their way, small wineries in states across the country will be forced to use distributors instead. And when that happens, wineries are at the mercy of a state-imposed partner that doesn’t care if the winery succeeds or fails.

This is exactly what happened in Virginia last year when the state revoked the wineries long held right to self distribute. Why did the state do this? Because the well-monied distributors paid them enough to get it done. Why did the distributors want this? Because a court case in Washington State informed us that allowing in-state wineries to self distribute while prohibiting out of state wineries from doing the same was unconstitutional. States either had to all wineries across the country to sell to the state’s retailers and bypass the distributors or let no wineries do so…including their own in-state wineries.

So why shouldn’t Virginia just let any winery anywhere bypass the distributor? Why not let Kendall-Jackson, Screaming Eagle and William Selyem sell direct to Virginia retailers?

There is no good reason not to allow this…unless you are a distributor that would lose money as a result. In other words, Virginia’s wine and beer distributors have bought themselves a state and a monopoly via campaign contributions.

But something interesting happened on the way to the Virginia Distributors’ Monopoly    the other day. That state’s wineries and grape growers had a meeting.

In fact, they had a meeting with local and state politicians and got in their face about the gross inequity that results from their self distribution rights being stripped from them and the prospect that many of them will face bankruptcy because distributors just don’t care to sell their wines.

This kind of get together and pressuring of state representatives is the first step in the kind of process that will break the stranglehold of the monied distributors.

Among the things that did not go unsaid at this meeting in Virginia:

-Some of the representatives have very lose ties to distributors
-Lots of money is flowing from distributors to lawmakers
-Distributors don’t care about Virginia’s wineries
-Many Virginia wineries will go out of business if the system isn’t changed
-The practice of selling from producer to distributor to retailer/restaurant is outdated.
-Distributors only care about money, Virginians ought to care about fairness.

If these points are repeated to every politician in the state of Virginia on a weekly basis and if these points are delivered to the media, local and national, on a weekly basis then Virginia’s wine industry might have a chance at survival.

2 Responses

  1. Rob Cole - September 13, 2006

    They should also hit the lawmakers with the money argument – if the in-state wineries are forced to shut down because of this, it will hurt tourism in the non-DC, non-Williamsburg part of the state. That’s one of the biggest attractions to the western part of the state.

  2. Needz - September 13, 2006

    Tom, I’m surprised you didn’t make more of the last paragraph of that newspaper article:
    ‘Perhaps David Gibbs of Virginia Mountain Vineyard had the best example of what seems the schizophrenic nature of the ABC laws in the state. Gibbs referred to a recently published article about a licensed moonshiner who is able to self-distribute his liquor: “If an ABC licensed moonshiner can sell corn liquor as a self-distributor in the state of Virginia and also sell it on his farm in his shop, certainly a winery could be allotted the same consideration.”’
    There oughta be a “laugh test” on legislation that creates situations like this.

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