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Bizarre Coalition Opposes Direct Shipment of Wine

Big money and the religious right join forces against wine lovers

Kim Marcus
Posted: February 14, 2005

Call it an unholy alliance, or just another example of how politics can make strange bedfellows, but the forces marshaled against the free movement of wine across state lines are truly diverse. The latest coalition unites monopolistic wine and spirits wholesalers with puritanical neo-Prohibitionists.

First, the wine wholesalers. The repeal of Prohibition and the erection of the so-called three-tier system gave them de facto monopolies through state-sanctioned distributorships. They control what wines many of us buy and how much they cost.

But now consumers want freedom. They want access to small-production wines not usually carried by distributors. With the rise of the Internet, consumers have been increasingly able to find such wines, either by directly contacting the wineries that make them or though specialty retailers who sell them across the country.

Yet laws in many states severely restrict or prohibit sales of wine across state lines that run counter to the officially sanctioned distribution channels. In December, the U.S. Supreme Court heard arguments in two cases that might overturn these protectionist regulations.

The wholesalers have fought tooth and nail against any liberalization of shipment laws. But there's one big hole in their argument: Most direct shipments within states have never been banned. And therein lies the basis of the challenges that were considered by the Supreme Court. After all, it was, in part, to encourage commerce between the states that the federal Constitution was ratified. The Court will announce its decision sometime late in the spring.

In the meantime, the propaganda campaign continues unabated. Take a look at the website of the powerful distributor lobby group, the Wine and Spirits Wholesalers of America. Among its more bizarre claims is that wineries are motivated purely by greed in supporting direct shipments. Isn't expanding markets a standard business practice? It warns of threats to the tax revenue stream. But there are regulations in place to ensure that direct shipments comply with state tax regulations. Besides, the vast majority of wines will still need to be handled by wholesalers and distributors because of the costs and hassles of direct wine shipments.

Then there is the underage card. The wholesalers have screamed and hollered that if direct shipping were legalized, minors would be clicking away to have doorstep delivery of alcohol. This argument has caught the attention of the religious right.

In a recent Internet column put out by the Agape Press of the Christian News Service, the Rev. Mark Creech rails against direct shipments of wine. It takes some interesting twists and turns for Rev. Creech to turn his opposition to direct shipment into a moral crusade. He does so by drawing on one of the New Testament's greatest miracles: when Jesus turned water into wine. "[I]t should be noted that the alcohol content of the wine of Jesus' day was considerably less than the fortified wines of today—equating the two is like comparing apples and oranges. Moreover, Jesus would have never approved the actions of a bunch of greedy Internet wine retailers who were determined to distribute 'strong drink' at the expense of the nation's children."

Creech bolsters his argument—and exposes the link between wholesalers and the religious right—by citing Juanita Duggan, the CEO of the WSWA. Duggan finds evil intent in direct shipments. "How can anyone argue that we should dismantle the existing system of safeguards in favor of a shadow alcohol trade that is unchecked and unaccountable?," Creech's site quotes Duggan as saying.

Duggan's claims were exposed as unfounded in 2003 with the release of a Federal Trade Commission report on the subject of direct wine shipments. At the time, FTC chairman Timothy Muris said, "E-commerce can offer consumers lower prices, greater choices, and increased convenience. In wine and other markets, however, anticompetitive barriers to e-commerce are depriving consumers of those benefits." The report concluded that the dozen states then allowing direct shipments reported few or no problems with underage access, due to signature requirements, age verification procedures and supplier permits.

Folks like Rev. Creech and Ms. Duggan have joined forces to try and deprive you of the wines you want to drink. Let's hope the Supreme Court is more interested in the facts than in their articles of "faith."

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