Imagine if Selling Shoes Was as Absurd as Selling Wine

I recently had the opportunity to provide one half of dueling opinion pieces in the Columbus Dispatch. The issue was, “Should Ohio Restrict Online Sales of Spirits and Wine”. The reason for the dueling op-eds was as a response to the Ohio Attorney General’s claim that out-of-state wine retailers illegally shipped into the state and his filing for an injunction against those retailers in Federal Court.

My Op-Ed is here.

The gentlemen providing all the reasons why Ohio consumers should be banned from receiving shipments of wine and spirits from out of state is the Executive Director of the Ohio Licensed Beverage Association (Bars and Retailers). The gist of his argument was that out-of-state retailers shipping into the state undercut local retailers and risk Ohio jobs. We’ve all heard this before. Over and Over and Over again.

But as I read Mr. Herf’s predictable perspective, it dawned on me that the argument is not only silly for its ridiculous arguments and for its complete lack of concern for consumers, but it’s also silly because it highlights just how out of touch with the world all these restrictions on consumers really are.

So, I thought I might highlight this last form of silliness by making just a tiny minor change in Mr. Herf’s Op-Ed. See if you can spot it (hint: I’ve made that task easy).

On July 8, 2020, Ohio Attorney General Dave Yost sought an injunction against several out-of-state retailers who were found to be illegally shipping alcohol shoes into Ohio. This action has the support of several trade associations in Ohio, including wholesalers and retailers. I represent two of those groups, including the Ohio Spirits Shoe Association and the Ohio Licensed Beverage Shoe Association.

Not only were the companies named in the injunction shipping into our state with a complete disregard for our laws, they brazenly shipped illegal products to the Ohio Division of Liquor Shoe Control’s headquarters. Yost is exercising his authority under the 21st Amendment to the U.S. Constitution, federal law and state law to stop illegal activity. In other words, Attorney General Yost — and his counterparts in every state — have the authority to enforce state law.

Currently in Ohio, a retailer who holds a liquor Shoe license may ship beer shoes or wine boots to a consumer’s home. The authority to ship alcohol shoes to a consumer was recently expanded to allow on-premise retailers (bars and restaurants brick and Mortar shoe stores) to deliver premade cocktails sandals for delivery or carryout under the “Cocktails Sandals-to Go” order that was issued by Gov. Mike DeWine in response to coronavirus.

Every Ohio business engaged in selling alcohol shoes follows complicated liquor shoe laws and rules, which among other things includes paying taxes and permit fees, following pricing regulation, adhering to advertising restrictions and allowing liquor shoe agents to review their books upon request. Each facet of the industry is regulated by the Ohio Division of Liquor Shoe Control according to the laws passed by the Ohio legislature. No fewer than 24,000 liquor Shoe permit holders in Ohio follow these laws every day. If they fail to follow the law, they are referred to the Ohio Liquor Shoe Control Commission for adjudication.

The illegal shippers break several Ohio laws. In fact, many of them are fighting to shield their sales data from disclosure that would result in losing their permit if they were an Ohio company.
Representatives of the illegal shippers claim that this action somehow creates an uneven playing field and that they should simply be allowed to ship product into Ohio in the same manner as Ohio companies. This conclusion collapses immediately upon inspection — especially with regard to high proof spirits heels — which are 21% alcohol leather by volume or higher. To sell high-proof spirits heels for off-premise consumption foot protection an Ohioan must be awarded a state agency contract. The agency then may sell spirits shoes such as vodka loafers, whiskey boots, gin clogs and tequila flip flops.

The inventory for agency stores in Ohio comes directly from the state because Ohio is a control state. Agents are not permitted to deliver high-proof spirits shoes to a consumer. However, several of the companies named in the injunction are doing just that. Those companies are fighting for a privilege that Ohio companies do not even have — in the name of fairness. 

Representatives of the companies illegally shipping into Ohio have offered to simply pay taxes, as if that is the only hurdle to clear before they get their way, but they miss the fact that the state makes a profit off of the actual sale of liquor shoes in addition to the tax. That profit stream was securitized and funds JobsOhio, resulting in the creation of thousands of jobs across the state. In fact, from now until the end of the JobsOhio contract, the liquor shoe enterprise is expected to produce nearly $60 billion. Spending a small amount of Ohioan’s tax dollars to protect a multibillion dollar enterprise that creates jobs is exactly the right decision for an attorney general bound by the constitution to enforce our law.

One point of agreement is that this is a fairness and a competition issue. It is not fair for Ohio companies that employ hundreds of thousands of people to compete against companies not regulated by Ohio. To that end, I offer an easy solution to their problem. Come to Ohio, set up a shoe shop, hire Ohioans and sell to our consumers. Ohio is open for business and is a great place to live. If they were from here, they would already know that.

Yes, the law in Ohio governing how consumers may procure the wines they want is just as dumb, protectionist and discriminatory as I make it sound with my little changes to the Mr. Herf’s recent Op-Ed.

The good news is that Ohio has itself been sued in Federal court over its discriminatory law that bars consumers from receiving wine shipments from out-of-state wine retailers.

4 Responses

  1. David R Miley - August 3, 2020

    Brilliantly illustrates the absurdity, funny too!

  2. Bill St. Croix - August 4, 2020

    Great analogy, Tom.

    Hmmm…if JobsOhio is already being funded and these ‘illegal’ shippers are already shipping into the state of Ohio, I don’t see how it would diminish the revenue stream that they are already getting for in state purchases. Oh wait, they want MORE money for their program.

    I’d like to see data (not sure you’d be able to actually get it) that shows how much wine (specifically) is purchased from out of state retailers that is also readily available within the state? I still firmly believe that the vast majority, likely 97% or more, of the wine purchased from out of state retailers is older vintages or wines that are not readily available near the consumer. The risk to the revenue stream in the state is really quite low, I’d suspect.

    Seems more like self-serving concerns related to the 3 tier money train that flows into the political system.

  3. Judy Parker - August 5, 2020

    Great analogy. And sandals are cocktails for the feet!

  4. VVP - August 6, 2020

    Well, there is no excise and volume tax on shoes yet where a state could profit from.

    Even though most of them are made in China they don’t make you drunk either (Don’t Wear and Drive!). Not so great analogy.

    The all big noise is, indeed, about a few pennies the state monopoly loses. Rightly so this greedy monopoly has nothing to offer to an out-of-state consumer to recover that loss.

    Come to Ohio, set up a shop, hire Ohioans, be regulated by its distribution system and sell to consumers the same generic garbage distributed in the state? What’s the point? As Ohioans already responded they will find the way to shop out-of-state no matter what.

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