HR 5034 Kills Consumer Access to Specialty Wine Retailers
It is a fact that the greatest deterrent to consumer access to wines today are the 37 states that prohibit Retailer To Consumer shipping of wine. What's going unnoticed in the debate over H.R. 5034, the bill now in Congress, is that, if passed, this bill would allow states to ban retailer to consumer shipping—without any justification whatsoever.
Retailer (not winery) to consumer shipping is the avenue through which consumer have potentially the greatest access to the explosion of domestic and imported artisan wines that have hit the American marketplace over the past 20 years. When wineries are sold out of their small lot wines, a retailer, somewhere, has it. Or an auction house (which is a retailer) is selling it on line.
The new artisan imported wines from South America, Africa, Australia and Europe can't be bought directly from the winery and shipped. One must look to retailers. And having access to services like Snooth and Wine-Searcher means you can find them. But draconian shipping laws aimed at protecting in-state wholesalers and provincial wine retailers have been passed that prohibit shipping from retailers.
H.R. 5034 will make this situation even worse and in a way that even wineries can't fathom. H.R. 5034 notes that states can only discriminate against out of state PRODUCERS if they offer "justification". Granted, the bill provides for such justifications to be announced by the mere simple and swift legislative pen that, once put into the law, is impossible to challenge.
However, H.R. 5034 doesn't even protect discrimination against retailer shipping by noting that laws must "justify" their discrimination. Under H.R. 5034 discrimination against out-of-state retailers is allowed without justification.
As executive director of the Specialty Wine Retailers Association, I've been involved in trying to open more states for retailer to consumer shipping. Through litigation, education and legislation, some battles have been won. However, since 2005 Granholm Supreme Court decision, consumers and retailers have seen their access to the market via internet sales reduced drastically, while wineries have seen their access to the market opened up. This has retarded the growth of the American wine marketplace, lessened consumer access to wine, and prevented states from increasing tax revenue.
The problems with opening more states for retailer to consumer shipping rest primarily on the fact that retailers don't possess the same level of sympathy that small, artisan farmer/wineries do. In addition, the wine industry has rallied around winery to consumer shipping and and left a small group of on-line retailers to fend for themselves with little or no support. Consumers, too, have been convinced that their access to wine depends primarily on access to wineries via the Internet. This just isn't true and isn't talked about much by consumers or producers.
As a result wine consumers in places like Texas, Illinois, New York, New Jersey, Washington State and other important wine consuming markets have been lulled into a false sense of wine accessibility by the passage of laws that seem like victories (wineries are allowed to ship there), but in fact have resulted in consumers having their access to the true American wine marketplace diminished by retailers being left out of the deal when direct shipping legislation is passed.
Retailers will certainly continue to fight for their ability to serve American wine consumers via direct sales. This will continue whether or not consumers understand this battle effects them and whether or not wineries realize that their greatest hope for even further increases in sales comes by having retailers being given access to the direct to consumer market.
But it should be no surprise that retailers are at the forefront of defending consumer rights and winery rights by working to fend off H.R. 5034 and trying to rally consumer opposition. If H.R. 5034 passes many states will rescind winery to consumer shipping rights. However. Retail to consumer shipping will likely fade away for some time altogether as wholesalers even in states where this form of commerce is legal will introduce laws that prohibit out of state retailers from shipping, without having to offer even the most half-hearted justification for their wholesaler protection bills.