Comments on the Direct Shipping Laws

[kenrbnsn]

Any one have any comments about the laws concerning the direct shipment of wines to consumers?

Here in NJ, one can order and get delivered wines from NJ wineries, but one can not do the same if trying to get wines from out of state. :(

Anybody else have any comments on these laws?

(Edited by kenrbnsn at 8:39 pm on Aug. 19, 2001)

[Kim WB]

I've actually spoken to my congressperson about this..while in CA, I had to get wines shipped back to my sister in Maryland!   The Chamber of Commerce and similiar business organizations are strong lobbyist for keeping the law, and  are joined by MADD and other groups who do not want any weakening of intrastate alcohol delivery.   Every once in a while, a vineyard in CA will be willing to ship to NJ..and they disguise it as olive oil.

[MsSumida]

when I go to Ca. and want wines shipped back, I have the winery pack it for shipping, then go to a Mailboxes Etc, kinda place and ship it myself.  That's basically the only way, unless you have a friendrelative in one of the 13 or 14 recipricol (sp?? :)) states.  THen you can have the wine shipped there, and they can ship it to you.  I've always shipped it as vinegar, olive oil or cherry juice.

[Fat Guy]

It's a complete outrage, not to mention there are some strong constitutional arguments against such policies. Here's a pretty good summary of the legal landscape:

http://www.winespectator.com/Wine/Spectator/WineWars/2001shippingintro.html

[Rail Paul]

In several states, shipping wine into the state is a felony.

The "felony" argument against a knowing shipper is a deal killer for a business. Even if you think the law in Georgia, or wherever, is bogus, a conviction will put you out of business.

And, then there's Pennsylvania, where the state runs the Liquor stores and still can't turn a consistent profit.  Protects the good citizens of the Commonwealth with some of the highest prices in the US, too.

[Steve Klc]

Twice a year or so I order a case and a half of wine from Navarro Vineyards, a wonderful, small producer nestled in the hills of California's Anderson Valley which I frequently write about.  They only sell direct to restaurants, direct to visitors in their tasting room and direct over the internet.

I paid $187.10 plus $8.42 tax plus $78. for "shipping and handling" to my state, Virginia.  It will take 15 days to receive my wine: for a consolidated shipment of all orders, driven in a refrigerated truck across the country, to reach my state and then be repackaged and repurposed through the state controlling authorities and distributors who have the monopoly on wine sales and then finally UPS'd to my door.

I'm in one of the many unenlightened, static states which do not allow direct shipping--usually trotting out some specious argument like preventing underage drinking.  All of this might change however.  Follow the links and reacquaint yourself:

Protectionism disguised as liquour control:

http://reason.com/sullum/040502.shtml

The Wall Street Journal weighed in a week late and more than a dollar short on April 8th--here are the links to the earlier articles that really mattered:

http://timesdispatch.com/news/vametro/MGBHAKEBGZC.html

http://www.washingtonpost.com/ac2/wp-dyn/A41163-2002Mar30

http://hoovnews.hoovers.com/fp.asp?....08a12fc

Looks like we're going all the way to the Supreme Court on this one.  A good general place to start if you are interested in learning more is:

http://www.freethegrapes.org/

[Roger McShane]

Interesting reading as an outsider. Having experienced the trauma of trying to buy a bottle of wine (or three or four) in Pittsburg, I thought I had entered a time warp.

For your information, in Australia section 96 of our constitution guarantees free trade between our states (which have a similar relationship to the Federal government that yours do). Therefore we have no problem shipping wine from one state to another as it would be a clear violationour our constitution.

Then again we don't have a Senator called Strom.....

[Steve Klc]

One of the Navarro wines I order--a lovely dry gewurztraminer--gets a nice mention in the NYTimes today by Eric Asimov, who concurs by writing that "Even better is the version from Navarro Vineyards, but although I see it regularly on restaurant wine lists, it's not sold in retail shops."  That doesn't mean restaurants are your only option, however.

What he doesn't mention (or his editors don't deem fit to mention) is why you can't buy it in retail shops or how you can get it if not in a retail shop or restaurant--the answer is complex: their wines are so good, so fairly priced, their effort to provide a wonderful tasting room experience is legendary, at every turn the winemakers engender such loyalty in their customers that the wines sell out by being offered direct to individuals without having to be in retail shops.  The 2000 dry gewurz was just released and also this Spring Navarro pulled out a 1998 dry gewurz from the cellar as well.  The best $14 or $16 you'd spend.  As for the dessert wine version--it's not clear which Asimov tasted, but he writes "If you have an opportunity to try a late-harvest gewürz from Navarro, you're in for a treat."  I'd agree wholeheartedly.

But note also that NY is in the same restrictive "3 tier system" boat as Virginia--and that New Yorkers who would like to order the dry Gewurztraminers or the rare, but superb, Cluster Select Late Harvest Gewurztraminer (last I had was the delicious 1997) can buy direct from Navarro, but have to go through the same consolidated shipping and processing through an in-state distributor as I did--and pay a premium to do so.

I can't help but wonder if more food and wine writers and editors started confronting the politics of this issue directly, more consumers would realize how small farmers are being hurt, how often the availability of special wines are needlessly constrained and restricted and really how regressive and anti-American this whole system is.  

(Might this have anything to do with ad revenue from retail wine shops and large producers?)

For anyone that wants to get on the Navarro bandwagon, you can call them at 800.537.9463, visit them at:

http://www.navarrowine.com/main.php

[dimitri steinberg]

I read yesterday (forgot where) that the Virginia Supreme Court struck down the prohibition agains out-of-state shipping as unconstitutional (commerce clause).  Not sure what impact this will have in other states - but clearly a step in the right direction.

[Steve Klc]

Dimitri--Virginia was one of the recent decisions, then a stay was issued. I think the state scorecard recently is 3 decided for, 3 against and that's why it will go to the Supreme Court.

[ajay]

I'd appreciate links to articles that describe courts striking down prohibitions against out of state shipping.  It was my impression that Congress had granted the states the authority to enact such legislation as a part of the federal government's commerce power.  [This would seem to make the VA Supreme Court's opinion curious to say the least!]

I would be thrilled, though, if the SUpreme Court were to end these odd laws, as I could finally get the wines I want at more reasonable prices.

[Steve Klc]

ajay--just go to the link I provided above for freethegrapes--all the articles, court decisions and press releases are there, even the recent New York and North Carolina ones.

[jordyn]

I'd appreciate links to articles that describe courts striking down prohibitions against out of state shipping.  It was my impression that Congress had granted the states the authority to enact such legislation as a part of the federal government's commerce power.  [This would seem to make the VA Supreme Court's opinion curious to say the least!]

I have no idea whether or not Congress passed a law allowing states to do this, but even if they did, there's no guarantee that the state laws pass Constitutional muster.  Congress cannot necessarily give away powers that are guaranteed to the Federal government, short of an amendment to the Constitution.  As an analogy, the Line Item Veto was struck down by the Supreme Court as unconstitutional because Congress was trying to transfer a legislative power to the executive branch; the fact that the legislative branch initiated this transfer of a Constitutional power still did not make it acceptable.

[Rail Paul]

I'm of the impression Congress DID delegate to the states the necessary powers to enforce their local liquor regulations as part of the amendment repealing prohibition in 1933.  That led directly to state liquor stores (PA) and the crazy quilt of regulations we currently endure.

Wine Spectator did a piece on the question in 1999? as part of their campaign against this law designed to protect wholesalers.  Interestingly, I can ship cases of wine from France to NJ far more easily than I can from Oregon to NJ. Declare the cases, pay my $35 tax, and the porter moves it to car service.

[ajay]

Thanks Rail Paul.  I was pretty sure Congress had delegated the power, but was unsure where and when.  I should have thought of the Constitutional Amendment repealing prohibition.  This source of the delegation raises a troubling question:

Since the authority for state liquor regulation including the bizarre direct shipinng laws is grounded in a constiutional amendment, can Congress preempt these laws with its commerce power?  My inclination is to say no, but first someone would have to convince Congress to muster the political will to impose common sense regulation on direct shipping laws.  Who knows, maybe the SUpreme Court is full of closet wine drinkers who are eqaully frustrated by their inability to acquire good Oregon Pinot Noir and California gewztraminer, and they'll construe the amendment in a favorable way

[Steve Klc]

Another excellent article:

http://www.techcentralstation.com/1051....050202A

[ChocoKitty]

Thanks Rail Paul.  I was pretty sure Congress had delegated the power, but was unsure where and when.  I should have thought of the Constitutional Amendment repealing prohibition.  This source of the delegation raises a troubling question:

Since the authority for state liquor regulation including the bizarre direct shipinng laws is grounded in a constiutional amendment, can Congress preempt these laws with its commerce power?  My inclination is to say no, but first someone would have to convince Congress to muster the political will to impose common sense regulation on direct shipping laws.  Who knows, maybe the SUpreme Court is full of closet wine drinkers who are eqaully frustrated by their inability to acquire good Oregon Pinot Noir and California gewztraminer, and they'll construe the amendment in a favorable way

Oh my goodness, this is bringing back memories of some legal research I did a while back for Coalition for Free Trade (http://www.coalitionft.org). Forgive me if I ramble (I'm trying to keep this short) and/or make a few mistakes -- I'm doing this off the top of my head.

The 21st Amendment delegates alcohol regulation to the states. The Commerce Clause in the Constitution delegates to Congress the power to regulate interstate commerce. BUT (very big BUT) states are NOT allowed to enact laws that conflict with the Constitution and federal laws (because the Supremacy Clause makes the Constitution and federal laws superior to state laws). So in this case, even if Congress remains absolutely silent on the direct shipping issue, the theory goes that state restrictions on direct shipping violate the Commerce Clause and are therefore unconstitutional. However, the states argue that the 21st Amendment delegated ALL authority to regulate alcohol purchases within its borders. So the conflict lies in the question: does the Commerce Clause trump the 21st Amendment? I'm inclined to say "yes" because of the Supremacy Clause. But, as with most things, the arguments are pretty close and I could probably argue either side with a straight face.

Besides the 21st amendment/commerce clause conflict, some states have a little twist: they allow in-state shipments of alcohol (e.g., you can have shipments from local wineries delivered to your home), but not out-of-state shipments. In that case, it's clearer that the states are violating the commerce clause because they're protecting in-state interests at the expense of free commerce between the states.

These laws have some funny consequences: I recall that the governor of MD had made a bet with the governor of CA over a Super Bowl playoff game a while back. MD gov. had signed a law prohibiting direct shipping and had been rather outspoken on the issue. Well, the bet was that if the Ravens won the playoff game, the CA gov. would send him a case of CA wine. The Ravens won, and then MD gov. found that he couldn't get his wine because of his own law! Does anyone else remember this story?

You can also check out: http://www.wineinstitute.org to get more info and updates. The goal of the wine industry is to get conflicting decisions from different courts, forcing the Supreme Court to resolve the conflict. It will be a long road.

A view from the other side: Americans for Responsible Alcohol Access. http://www.araa.org/  Strangely, the ARAA was founded by the wholesalers' lobby and MADD. I think they had a falling out a year or two later, though.

My personal experience: Michigan prohibits direct shipping, so I have wine shipped to a friend in Illinois, drive over to Illinois to pick the wine up, and then drive it back.  What fun!

[Rail Paul]

Wine Spectator's June 15 issue ("San Francisco") has an update.

North Carolina's ban on interstate importing has been overturned, based on the unfair advantage it offers local producers. The decision is under appeal, and a stay has been granted.

WS reports that the NY case has been argued, and awaits a decision in Federal court. The state's argument rests on the belief that NY licensed wholesalers and retailers are an essential element of the police power required to protect against underage drinkers. A ruling is expected this Fall, and will undoubtedly propel the group of cases to the Supreme Court.

FL and MI - no shipping into the state decision

NC and VA - the out of state ban is illegal

IN - ban held to be legal at the appeals level, because the same restrictions apply to local wineries

I believe there's also a case on the Federal docket in NJ which is waiting arguments. A ruling would go to the NJ/PA Federal appeals court, adding another appellate jurisdiction.