Retailers suing states over direct wine shipments.

Not sure if someone has posted: if so, could not find it. Anyway glad to see it.

Thanks for posting this. I believe Tom mentioned it in another thread. I really wish them the best. The article lays out their case quite succinctly, at least as far as I understand it. This could set a very meaningful and important precedent if they’re successful. Obviously state politicians are too closely tied to the large wholesalers in most states, so the legislature will never change anything in a lot of markets. That means the courts are probably the only viable option.

It’s so ridiculous that this is the response to claims that the current laws are unconstitutional:

“This legislation protects the health and safety of Illinois consumers by promoting compliance with state law,” WSDI executive director Karin Lijana Matura wrote in a statement. “It’s about protecting Illinois consumers by abiding by the three-tier system that this industry was established on.”

I just tried, and I can’t point out how illogical those statements are without taking multiple paragraphs to look at how none of it makes any sense at all. I’ll simply say that Matura cites “health and safety” and then fails to point out how any of this is related to either, because, of course, there is no relation.

I think the WS article is mistaken when it says the Texas Package Store Association case is aligned with the Illinois and Missouri cases. As I read this, the issue is about strengthening residency requirements to obtain a alcohol sales permit, a step in the wrong direction for consumer choice.

The problem I see is that if the plaintiffs are successful, and out-of-state retailers are entitled to ship directly into a state just as in-state retailers are is that the in-state retailers are likely to use their political muscle to shut down all direct shipments, from both in-state and out-of-state retailers.


Some retailers do a lot of in-state shipping and wouldn’t want to lose all that business just on the possibility of facing some competition from out-of-state retailers. And I know that wholesalers have a lot of political muscle, but wine shop owners?

I am very happy to see this …

Salute !!!

Even though the wholesalers are even more powerful, I am sure there are quite a few state retailers’ associations that would put up quite a fight over that. I would think would get involved too, and they have quite a bit of money to throw around. I agree that this could be a problem, but I don’t think it would come down in favor of the wholesalers nearly as easily as things have so far. Plus, it’s probably the only way to combat their protective measures, so I think it’s worth doing on that basis alone.

I don’t know how it would play out in each state, but I should have noted (as mentioned below) the wholesalers might also put that pressure on the legislatures.

I suppose the basic economic tradeoff is right now wholesalers likely see in-state online distribution as a way potentially to expand sales, which is good for them. But if it appears other states’ retailers are better at it, it could decrease the amount of wine flowing through their wholesale system. So, for example, New York wholesalers may see online as good, because some large wine shops in NYC have robust national shipping programs. But NJ wholesalers (not sure of laws there - just as an example) may not get much online boost in-state so would want to keep NY online sales out.

Alcohol sales is the only area in which this type of unconstitutional interference of interstate commerce has been upheld in courts over the years. I live in Illinois, and because of the “whistle-blower” suits against retailers who used to ship into Illinois and will no longer do so, I rent a wine-storage space in St. Louis to be able to receive shipments. Wine is not like many other commodity items, since many wines cannot be obtained except via out-of-state sources. So “protection” of consumers is hogwash.

The current 3-tier scheme is anti-competitive, violates the commerce clause and only serves the self-interest of the 3-tier system and the state taxing authority.

I agree with all of this. Unfortunately, the 21st Amendment puts alcohol in its own separate category for purposes of constitutional analysis, at least to some degree, leading to this result. I would like to see a repeal of the 2d clause of the 21st amendment (or a new amendment repealing both the 18th and 21st amendments)

The commerce clause has forced the states to offer the same terms and conditions for out of state retailers as in state. So you have the ludicrous result that if you ban retailers shipping from out of state, you have to ban retailers shipping within the state.

to comply, everybody gets screwed apart from the WSWA.

There are NJ retailers like Wine Library that do a lot of business on line and ship out of state, so I don’t think NJ will be a problem state.