Power to the people: Why we need direct shipment of wines

More information at FreetheGrapes.org

During the 13-year mistake called Prohibition, Americans were forced to do backroom business with sleazy bootleggers selling dangerous, gut-wrenching distilled spirits brewed in bathtubs. Once the religion-driven experiment was defeated, drinkers breathed a collective sigh of relief, believing the federal government’s control over their beverage choices had evaporated. Unfortunately, that was only the beginning.

The 21st Amendment, passed in 1933, repealed Prohibition and gave every state broad rights to control the sale and distribution of alcoholic beverages. Over the years, states have developed elaborate regulatory systems, ranging from complete government control to the three-tier method, used in Georgia and Florida. “Three-tier” refers to the distribution system whereby a supplier — in our case, the winery — sells product to a wholesaler, who in turn sells it to restaurants and retailers. The reasoning for its existence is three-fold. Wholesalers collect taxes on alcohol and prevent it from reaching minors — a heartstring issue the lobbyists pull to block changes to existing laws. Three-tier also prevents the “Wal-Marting” of wine, where small retailers could be forced out of business by large competitors able to negotiate lower bulk prices directly from wineries.

But three-tier distribution has, since its origin, become as much a matter of choice limitation as one of temperance and revenue. Currently, almost 6,000 wineries call the U.S. home (up from 4,700 in November 2004). Of these, maybe 20 percent have the resources to be represented by wholesalers in all 50 states. Without the availability of direct shipping, adventurous wine consumers seeking obscure labels not handled by wholesalers (a growing category) are shit outta luck.

But in spring 2005, the U.S. Supreme Court ruled that states allowing wineries to ship directly to consumers in-state must also allow interstate shipments.

How does this affect access to limited-edition wines? Since wholesalers don’t have the financial incentive to carry small-production brands, new government regulations offer some help. Currently, 34 states allow online ordering and shipments, with varying restrictions (up from 13 a few years ago). Today in Florida, I can order limited edition wines direct, but things are headed in the opposite direction. State Senator Bert Saunders (R-Collier) has sponsored a bill, which, if passed, will impose a complete ban on winery-to-consumer shipments from any winery or wine company producing more than 250,000 gallons (about 100,000 cases). Although most small wineries produce less than 20,000 cases, and would thus be exempt, that’s not the point. Why restrict it at all? The vast majority of consumers will still grab wine at the grocery store, but when they hanker for that delicious boutique cabernet they tasted onsite at behemoth Gallo winery, they’re shut down. They can’t get it in the store at home, nor can they order it via mail. If it passes, this bill will undoubtedly be challenged in court, like similar ones in Arizona, Kentucky and Massachusetts.

However, matters are not all ass-backward in the Southeast. North Carolina residents have enjoyed the luxury of direct shipments from in-state and out-of-state wineries since 2003, mostly because their Legislature realizes that wine is a tax cash cow. And in Georgia, a bill has just been proposed that allows anyone over 21 to receive up to 24 cases of direct-shipped wine a year. But I wonder, with the strength of wholesalers in Georgia (which has some of the most draconian laws regarding wholesaler representation), whether the bill will pass.

All told, though, we’ve come a long way since 1997, when direct shipping was a felony in Florida, Georgia and North Carolina. And at least the issue is spilling out. To know more, log on to freethegrapes.org.


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