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Ebay Bans Wine Sales Online


Dana Nigro
Posted: September 14, 1999

Ebay, a popular online auction site on which people sell everything from Beanie Babies to bottles of Bordeaux, announced that it is prohibiting sales of wine, beer and other alcoholic beverages on its U.S. site as of Oct. 13.

The Web site's action highlights the complexities of federal, state and local laws regarding the sale of alcoholic beverages -- particularly regulations on interstate shipments of such items. Many states limit alcohol sales to licensed businesses and thereby prevent consumers from selling wine directly to one another. In addition, many states make it illegal for companies and individuals to ship alcohol across state lines directly to consumers. Even when such shipments are permitted, steps must be taken to prevent sales of alcohol to minors.

Ebay is also banning listings of tobacco products for the same regulatory reasons.

On its Web site, the company explained that it "does not want to be associated with the potential unlawful sales of these items. In addition, having an unauthorized item on Ebay may expose the individual selling or buying that item to legal liability. For example, an Ebay user who lawfully sells fine collectible wines to a user in one state may face criminal prosecution if the transaction took place with a different Ebay user in another state."

One of the difficulties with Ebay's auction process is that bidders are not identified until the auction ends. Therefore, someone selling wine on the site would not know if that particular transaction would be illegal until the winner was announced.

Unlike traditional auction houses, which appraise and sell large lots of rare and fine wines, Ebay tends to list individual rare bottles, partial cases, lesser-known wines and curiosities. The company does not evaluate the products for sale; instead, buyers must trust the sellers' descriptions of bottle condition and storage history.

Sales of alcohol are still allowed on Ebay's international sites. The U.S. site permits sales of unopened collectible containers that hold alcohol, as long as the value of the product is in the container and not in the beverage.

To learn more about interstate shipping regulations, read our feature package Wine Wars and check our state-by-state listing of shipping laws.

For more about online auctions, read auction correspondent Peter D. Meltzer's report, Bidding on the Web.

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