Asimov on wine shipping: It's over. The wholesalers won.

[Robin Garr]

"Follow the money." The nation’s wine distribution system has never fully recovered from its roots in the Prohibition-era mob. Eric Asimov didn't say that, I did. But it's implicit in his NY Times story last week:

Wines Are No Longer Free to Travel Across State Lines
Eric Asimov
THE POUR OCT. 23, 2017

For a golden moment, motivated wine lovers could rely on high-speed internet as a sort of national wine shop. A consumer in Little Rock, Ark., for example, unable to find particular bottles locally, could order them from a shop in New York. It required only a willingness to pay shipping costs.

Those days are no more. In the last year or so, carriers like United Parcel Service and FedEx have told retailers that they will no longer accept out-of-state shipments of alcoholic beverages unless they are bound for one of 14 states (along with Washington, D.C.) that explicitly permit such interstate commerce.

Click for the full story (I hope the link through Facebook will bypass the paywall):
https://www.nytimes.com/2017/10/23/dini ... ebook&_r=0

Terrible stuff. Does seem to be going backwards. And the Thunderbird example is ludicrous. Especially in an era when pre-teens can order fentanyl over the internet without problems, and go straight to their sad overdosed death.

Does anybody have knowledge/backstory on why those 14 states are the ones that still allow shipments from out-of-state? Particularly strong consumer lobbies? Particularly weak wholesaler lobbies?

[Robin Garr]

Does anybody have knowledge/backstory on why those 14 states are the ones that still allow shipments from out-of-state? Particularly strong consumer lobbies? Particularly weak wholesaler lobbies?

Let's spare folks a click by copying the list:

Alaska
California
Idaho
Louisiana
Missouri
Nebraska
Nevada
New Hampshire
New Mexico
North Dakota
Oregon
Virginia
Washington, D.C.
West Virginia
Wyoming

At a glance, I'd guess states with a strong local wine industry (California, Idaho, Missouri, New Mexico, Oregon, Virginia), states with a strong attachment to letting the good times roll (Louisiana, Nevada, and, at a white-tie-and-tails level) Washington, DC; and for most of the rest, a strong midwestern or mountain libertarian style. Strictly intuitive, no actual knowledge, but I think that covers most of them.

I have wine delivered frequently from both FedEx and UPS, no problem. Most from Europe and the left coast.

At a glance, I'd guess states with a strong local wine industry (California, Idaho, Missouri, New Mexico, Oregon, Virginia)...

Shouldn't states with a strong local wine industry have a greater interest in limiting competition from outside sources?

I have wine delivered frequently from both FedEx and UPS, no problem. Most from Europe and the left coast.

That's been my experience too, but in recent months several retailers have told friends that they can no longer ship common carrier. They've been able to find work arounds in most cases, but in one case retailer just refunded charge. Things are definitely shutting down.I have some assorted stuff with various retailers, we'll see.

[Robin Garr]

At a glance, I'd guess states with a strong local wine industry (California, Idaho, Missouri, New Mexico, Oregon, Virginia)...

Shouldn't states with a strong local wine industry have a greater interest in limiting competition from outside sources?

No, because of reciprocity. If they want to ship out - and they assuredly do, even the small producers in the age of the Internet - Granholm holds that they have to allow shipping in. It's a "rising tide lifts all boats" deal.

[Robin Garr]

No, because of reciprocity.

Also, it's not an easy case even with a strong local industry. New York's is surely the largest wine industry outside the West Coast, but thanks to NYC, New York's wholesalers are even stronger, so the wine makers can't prevail.

If they want to ship out - and they assuredly do, even the small producers in the age of the Internet - Granholm holds that they have to allow shipping in. It's a "rising tide lifts all boats" deal.

Tell that to your President!

I suspect the market dynamics are a bit more complicated. But yes, I see the logic.

At a glance, I'd guess states with a strong local wine industry (California, Idaho, Missouri, New Mexico, Oregon, Virginia)...

Shouldn't states with a strong local wine industry have a greater interest in limiting competition from outside sources?

No, because of reciprocity. If they want to ship out - and they assuredly do, even the small producers in the age of the Internet - Granholm holds that they have to allow shipping in. It's a "rising tide lifts all boats" deal.

I think pure reciprocity is pretty much dead & gone, Robin. Originally, reciprocity said that if you allow our State's wnrys to ship to your state, we'll allow your State's wnries to ship to our state. Pure & simple...only applied to wineries. Since those early days, most states have gone to a permit system. "You buy a permit to ship to our state, and collect our state GrossReceipts tax & remit".

The wholesaler's mouthpiece, Craig Wolf, is obviously an idiot, just another Wayne LaPierre. The thought of teenagers shipping Thunderbird from Nevada into NewYork is laughable. Why would they do that when they can buy it easily from the nearby 7/11 or whatever. And then he goes on to tie retailer shipping to the deaths from illicit alcohol in other countries. How he can make such statements with a straight face is beyond me..but I can see if thay can say stupid things like that in the WhiteHouse...no reason Craig cannot follow their lead as well.
Asimov was a wuss for not labeling him as an idiot and calling him out for such stupid statements.

What I am curious about is what inpacts this as been on a lot of those non-winery wine clubs, like the WSJ or NYTimes wine clubs. Or the K&L wine club.
Tom

[Jenise]

I have wine delivered frequently from both FedEx and UPS, no problem. Most from Europe and the left coast.

Washington's not on that list but I've had no problems here. I buy wine from out of state almost monthly. Only once in 15 years here have I had an issue and that was buying from NJ, where there's no reciprocity.

[Robin Garr]

Washington's not on that list but I've had no problems here. I buy wine from out of state almost monthly. Only once in 15 years here have I had an issue and that was buying from NJ, where there's no reciprocity.

There's some gap between theory and practice, that's for sure. Even in Kentucky, one of the stupidest of the felony states, it's possible to get some wine clubs and some wineries/retailers through the cracks. It's frustrating, though, because most will refuse, so choice is limited. If it weren't for a few good, smaller importers - I am hugely thankful for Kermit and Vanguard and a few others - I wouldn't be able to get much here beyond Yellowtail.

[Robin Garr]

I think pure reciprocity is pretty much dead & gone, Robin.

Thanks for the update, Tom. Living in Kentucky, even in the urban Ohio Valley, I'm pretty much insulated from all these developments. The only good news is that our ABC isn't enthusiastic about pursuing a few wine geeks and the specialist shippers who serve them, so a lot can slip under the radar. But most shippers are afraid of the "F-word" even if it does apply only on the second offense after a warning.

[Jenise]

Per my friend, an exec at Wine.com who lives here in Washington state:

No problems in WA (that I am aware of). I think most of the material in the article is old news because we have had issues over the years in states like NY, NJ and TX. But we have LC’s in each of those markets. Fedex/UPS is still picking up our packages to all states we were previously shipping to.

Here is our official statement:

“ Wine.com operates out of multiple warehouses throughout the country, which are in place to comply with state laws. We ship to states where we have legal licenses. We have been operating with FedEx and UPS for 18 years now, and should they decide to alter any of their operations with regards to our current licensing, we will have plenty of notice and customer’s current orders will not be affected.

The Federal and State governments I believe distinguish between wines for personal use (not for sale-"home-made" wines made for personal use) and wines for sale.
A retail license issued by one state does not mean that retailer can sell outside that state. Now if the state allows the retailer to apply for a shipping permit (and sell wine outside the state) and he signs a contract with a private carrier (who is bonded and licensed to transport wine- UPS and/or Fed-EX etc) and gets a permit or license to distribute and sell wine in the destination state. There should not be a problem.

Salute

Wow The EU is a more open single market than the USA , at least in wine.

I have bought from Germany and Italy with no problems and am thinking of orders from Spain and Portugal. However, some countries with high excise taxes and state wine retailing monopolies for ostensibly public health reasons, e.g. Sweden and Finland, try to make life difficult for personal wine orders from other countries, as does the UK just for tax reasons.

(In the UK any possibility of direct ordering may come to an end in March 2019 as the drawbridge across the English Channel is raised and the portcullis at Dover, other ports and airports comes thudding down.)

[Robin Garr]

Wow The EU is a more open single market than the USA , at least in wine.

The reality of the USA as a body of somewhat autonomous states shows itself in alcoholic beverages almost more than any other product, Tim, because the Repeal of Prohibition was written that way, taking the federal government out of the business of "transportation" of alcohol and leaving that issue up to each individual state. I'm not sure what the original point of that was, and it has come to look increasingly stupid over time, but we're clearly stuck with it.

Basically Tim a lot of “piggy backing” goes on. Take wine and liquor retail licenses. Basically it only allows you to sell the bottle of wine or liquor from the premises. The consumer than takes the bottle off premises and drinks it (hopefully at home). The retailer themselves are not legally allowed to conduct tasting (serving and drinking on premises). Instead for instance, a licensed winery representatives (whose license permits them to conduct “off-site” tasting) maybe present conducting the tasting on the retailer’s premises.

Salute