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And This Is Freedom?

James Laube
Posted: February 3, 2000

And This Is Freedom?
By James Laube, senior editor

With the click of a mouse, you can order a book via the Internet and it will be delivered to your mailbox the next day from a warehouse across the country. You can order a whole new computer system from out of state and it will be delivered to your front door the next morning, usually by 10 a.m. No hassles.

But if you live in New York or Florida, and you're putting together a wine tasting, and you want to have a bottle delivered to your house from an out-of-state winery or retailer--forget it. If you want to buy a couple of cases of hard-to-get California Zinfandel or Fumé Blanc for your cellar, and you live in neighboring Arizona, you're stuck. Can't do it.

When it comes to interstate wine shipping, America is still in the throes of Prohibition. Many of us live in states where it's illegal to ship in wine via the usual overnight carriers. Thirty-seven states have significant restrictions on the purchase of wine from out of state. And in seven of these states, if a winery ships you a bottle across a state line, that winery could be committing a felony. Imagine that.

Those of us who live in the free wine world can order a bottle or a case with the same ease of shipping as any other package. But if you live in a restricted state, where government-sanctioned, licensed wholesalers have a monopoly on the flow of wine, beer and spirits between out-of-state producers and local consumers, then you could be dancing with the Devil.

For most wine drinkers--and perhaps most Americans--the time has come to overhaul this antiquated system. Government intrusion in wine shipping is far too oppressive and regressive to continue. Consumers--who make up the foundation of the wine industry by buying and drinking its products--have a weak voice now, but the numbers, and the issues, are slowly tilting our way. It will take time to revamp all the state and county statutes that uphold the current "three-tier" system. That system requires wineries to sell to wholesalers, who in turn sell to retailers--each taking a markup. Lobbyists who represent the powerful wholesalers wield far too much power in state legislatures for the laws to be easily rewritten or overturned. Letter-writing campaigns to elected officials have so far been largely futile.

The wine trade--wineries, wine shops and restaurants--is still mixed on shipping. Some wineries (mostly the largest ones) benefit from the current system because their wines are placed in many locations that the wineries themselves couldn't possibly cover with their existing sales forces. Other wineries detest the power the wholesalers wield in selling their wares.

Small to midsized wineries would like the freedom to ship directly to consumers because their profit margins would increase if they could sell their products at retail prices instead of wholesale. As it is, small wineries don't allocate enough cases of wine to small markets to impact wholesalers' finances. Wholesalers make their big money on larger-volume sales. By going direct, small wineries could also circumvent the influence of the wine media, which some still view as a hindrance to their sales campaigns.

Still, many of these small wineries are the precise brands you'd like to have direct access to. I don't think most wineries would want to become direct-shippers exclusively because they appreciate the diversity of sales in wine shops and restaurants.

The hope now among free-traders is that a federal court will strike down the laws prohibiting interstate sales of wine. Just recently a judge in Massachusetts dismissed a suit against FedEx, the shipping company, and an Internet wine-sales firm. Wholesalers will appeal--they're not about to surrender a multibillion-dollar business without a fight.

The wholesaler-distributor network deserves some credit. It has dispersed wine throughout the country, educated many in the wine trade and even penetrated difficult markets. But times change, and consumers deserve better.

My sympathies go out to those who live in states with antiquated shipping laws. I keep waiting for the morning when I wake up and read about the judge who finally set wine free.

This column, Unfiltered, Unfined, features the opinionated inside scoop on the latest and greatest in the world of wine, brought to you each Monday by a different Wine Spectator editor. This week we hear from senior editor James Laube, in a column also appearing in the current Wine Spectator. To read past Unfiltered, Unfined columns, go to the archives. And for an archive of Laube's columns, visit Laube on Wine.

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