Wine Wars 6.2.4

Posted by Tom Wark on Mar 24, 2016

The direct shipment of wine is not the battlefield it was back in 2005-2010. However, a few recent actions remind us that alcohol regulations and laws remain one of the primary vehicles through which rent-seeking, protectionist laws and political payback is accomplished.

LOUISIANA PUNISHES WINERIES TO SAVE WHOLESALERS
As reported by ShipCompliant on their outstanding blog, The state of Louisiana recently declared that while direct shipping is permitted by out-of-state wineries, if awinery has a contract with any wholesaler it may not direct ship ANY wine into the state. The rule used to be that wineries were not allowed to ship any wines currently carried by a wholesaler. Of course there is no other industry in America that is prohibited BY THE STATE from directly selling one of its product to a consumer when a wholesaler in that state also represents the brand in some way. There is no legitimate public policy goal for this position other than to stifle interstate commerce on behalf it its wholesalers. Would love to see this one play out in court.

ARIZONA DIRECT SHIP BILL IS AMENDED TO DECREASE AMOUNT THAT MAY BE SHIPPED
Just when it looked like the new Arizona bill that would allow AZ consumers to buy up to 12 cases annually from an out-of-state winery would be passed, a nice lawmaker decided to push through an amendment that would reduce the amount a winery could ship to a consumer in year one of the law to six cases annually, which rises to nine cases in year two of the law and finally levels back out to 12 cases per year in year three. Like the protectionist move in Louisiana described above, this little amendment amounts to a gift to Arizona wholesalers. It turns out there is actually no justifiable public policy explanation for this kind of amendment either.

MICHIGAN SCREWS WINE LOVERS — AGAIN
A bill that would have allowed both in-state and out-of-state wine stores and retailers to ship wine direct to MI consumers was amended at a committee hearing to only allow in-state retailers to ship wine. The sponsor said he had a report from “an outside organization” detailing that Michigan retailers were losing $60 million per year because of illegal shipments by out-of-state retailers. Though we don’t have confirmation yet, we can nearly guarantee the “report” is the work of the solidly unbiased Michigan Beer and Wine Wholesalers. Why would they lie? In any case, even if the reported $60 million dollars in shipments from out-of-state retailers is accurate, the sponsor of the bill that referenced these purchases in explaining why he amended out-of-state retailers out of the bill never explained why Michigan consumers would have paid the cost of shipping on that $60 million in wine if they could have purchased those wines locally. That is the implication of the claim that Michigan lost sales to out-of-state retailers. As with the above two items, this is another example of simple protectionism and a “fuck the consumer” attitude that most lawmakers come to possess once provided with campaign contributions from industries that are willing to pay for protection from competition.

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