"We may lay in a stock of pleasures, as we would lay in a stock of wine; but if we defer tasting them too long, we shall find that both are soured by age." 

Charles Caleb Colton, English clergyman, author, & suicide (1780-1832)

Wine and the Supreme Court

Winery Insight Featured Article - June 2004 by Timothy O. Rice

Wine’s time has come.

This week, one of the most divisive and antagonistic issues in the wine industry is coming to a head.  The Supreme Court has agreed to hear the New York and Michigan cases about the right of wineries outside a state to ship direct to consumers inside the state.  After decades of confusion and a patchwork of conflicting laws concerning who can ship what to whom, there now appears to be hope the courts will resolve this issue for us.

The problem arose after Prohibition was repealed.  The issue of how to regulate the sale of wine was turned over to the individual states; naturally enough, that resulted in different laws in just about every state.  After a while, a system referred to as the three-tier system arose in many, if not all, states: master distributors, distributors, and retailers, all licensed by the states, were the only way to sell alcoholic beverages.

In the United States today there are some 2,700 wineries.  A very small number (around 50) seem to produce almost 95% of all the wine.  Only about 400 have distribution arrangements that bring their products to all 50 states. As a result, the chances of a consumer or wine-collector finding that blockbuster wine from the suddenly hot boutique winery are almost non-existent if you cannot buy bottles direct from the winery.  Small wineries – and most of them are small – often cannot afford to go through the regulatory approval process in so many states.

With the growth of the Internet, people have become accustomed to searching out and ordering products from far away.  They view the system of laws and regulations that stands in their way as interference with their freedom, and they do not understand why they should be restricted.

At the same time, there are some legitimate concerns raised about the loss of tax revenue to the states, the sale of alcohol to minors, and other matters by those opposed to allowing direct shipping to consumers.  This is a complex situation, with powerful interests involved as well as small family wineries and consumers. The issues involved in the shipping of wine parallel, in some ways, the "State's Rights" issues debated so hotly before the Civil War.  Who has the right to control this?  Should it be the states?  Or is the current conflicting rat’s-nest of laws so restrictive that it restricts interstate trade and so should pass to the control of the Federal government?

Currently, the states can be characterized as follows:

Individual wine consumers and collectors view all this as an intolerable interference with their rights and/or a tax on their activities.  States, essentially, view this as a matter for local control.  In some cases, the law is effectively protectionist for local wineries or businesses, just as the South complained tariffs favored the Northeast in the pre-Civil War days.  Not surprisingly, big winegrower states like California, Oregon, Idaho and Washington are all Reciprocity states.

I wonder if it will come to a second Civil War!

For further information, please see:

Free The Grapes! (www.freethegrapes.org)

Wine & Spirits Wholesalers of America, Inc. (www.wswa.org)