Protectionism Crushes Consumer Choice

Posted by | Posted in Wine Politics | Posted on 04-05-2011

Tom and his husband, Cy, at Gloria Ferrer.

“Considering the geographic proximity, it’s simply ridiculous that I can’t ship wine to Maryland,” reasoned Tom Natan, the owner of Washington DC-based First Vine Wine Imports + Sales, as we sat down over coffee to discuss the real-life impact of Maryland’s anti-consumer wine laws.

Maryland’s oenophiles would probably agree. First Vine imports an array of wines from France, Spain, and even Malta. For most of these wines, First Vine is the only importer in the United States. And all the wine is affordable — most bottles range in price from $10 to $35.

Yet consumers in Maryland (and most other states) are legally prohibited from purchasing wine from First Vine and other out-of-state retailers. Such laws stifle consumer choice and keep prices artificially high. Read the rest of this entry »

More on Maryland: Del. Davis Chimes In

Posted by | Posted in Wine Politics | Posted on 03-31-2011

This past Sunday, as regular readers know, I had a short oped in the Washington Post commenting on the move by Maryland lawmakers to legalize the direct shipment of wine from out-of-state wineries but not out-of-state retailers.

That day, I received a long email from Maryland Delegate Dereck Davis, who chairs the House Economic Matters Committee. I strongly criticized Del. Davis in my piece, and he took issue with most of what I wrote.

His note was thoughtful, and his argument deserves to be heard. And I very much respect his engagement with me on this. So with Del. Davis’s permission, I’m publishing his letter in its entirety. Unsurprisingly, I disagree with most of what he’s written. So once you read his letter, check out my rebuttal below the fold.

I hope that this is educational – and once again, I urge all readers to “like” the American Wine Consumers Coalition on facebook. Wine consumers desperately need an organization like this to take root. Read the rest of this entry »

The Govt. Shouldn’t Run Home Depots (Or Liquor Stores)

Posted by | Posted in Wine Politics | Posted on 03-28-2011

Pennsylvania State Rep. Mike Sturla (D-Lancaster), who chairs the state’s powerful House Democratic Policy Committee, recently met with reporters and editors at the Pittsburgh Tribune-Review to discuss the Republican push to turn the state’s liquor monopoly over to private operators.

Based on the article, Sturla is economically incompetent. And that’s putting it kindly. Here’s a letter I sent the Tribune-Review:

Editor,

Rep. Mike Sturla is convinced that “prices would increase and the enormous selection the state leverages through buying power would shrink” if Pennsylvania sold the state’s liquor stores to private operators (“Pennsylvania Liquor Control Board against private sales,” March 23).

If that’s the case, then why hasn’t Rep. Sturla called for the state takeover of grocery stores or electronics outlets? Just think how much money Pennsylvania’s consumers could save if the state leveraged its buying power for food or iPods!

The state has no more business running liquor stores than it does operating Home Depots.

Sincerely,
David White
Founder and Editor, Terroirist.com

(You Gotta) Fight For Your Right

Posted by | Posted in Wine Politics | Posted on 02-07-2011

Want some wine with those Maryland crabs? You better buy it locally. Uploaded to flickr by nate steiner.

In late January, Maryland lawmakers introduced legislation to legalize the direct shipment of wine to consumers from out-of-state wineries and retailers. On Sunday, I had an op-ed in the Washington Post urging citizens to fight for this bill.

Even though many lawmakers have signed on as co-sponsors of the bill  (83 of 141 reps in lower chamber; and 32 of 47 senators in the upper chamber), most analysts expect the retail component of the bill to fail. Tom Wark has covered this in-depth, predicting that “wine lovers and wine retailers are about to be shafted.”

The pessimism is warranted. Last week, Del. Dereck Davis (D-Prince George’s), who chairs the Economic Matters Committee, told the Washington Post, “I’m going to do what I can to forge a consensus.” A “compromise” bill, of course, would retain the Maryland laws that prohibit residents from ordering wine from Internet retailers, joining wine-of-the-month clubs, and taking part in out-of-state wine auctions.

The Post had another article on the Maryland bill in today’s paper, which included the following:

“Some lawmakers… expressed concern about the potential harm to local stores if the bill allows consumers to have wine shipped from out-of-state retailers.

“’How do we protect them?’ asked Sen. Joan Carter Conway (D-Baltimore), who chairs the Senate committee that will review the legislation.
That is the biggest sticking point for the alcohol industry. Bruce Bereano, a lobbyist for wholesalers, said allowing the sales would ‘harm in-state liquor stores that are family-owned and part of the fabric of communities.’”

This should make your blood boil. It’s not just offensive to consumers – it offends common sense. It’s protectionism at its worst.

Imagine if a state prohibited Amazon from shipping books, because the sales would “harm in-state book stores that are family-owned and part of the fabric of communities.” Or Zappos, because interstate sales could threaten the local shoe store.

Consumers  – stuck with fewer choices and higher prices — would rightfully be outraged. (Not to mention the Interstate Commerce Clause, which is a whole other issue.)

Anti-consumer, anti-choice wine laws must be reformed. These days, I stay on top of issues that affect wine consumers on the facebook page for the American Wine Consumer Coalition. Check it out, “like” it, and join this fight.

(Mike Diamond of The Beastie Boys is a well-known oenophile. So this video is appropriate.)

Welcome LA Times Readers!

Posted by | Posted in Terroirist, Wine Politics | Posted on 12-17-2010

For those who didn’t see it, I had a op-ed in today’s LA Times (republished in the Chicago Tribune) about the latest story in the fight for wine consumer rights. In late November, a coalition of wine retailers from across the country asked the U.S. Supreme Court to decide if prohibiting interstate wine transactions is constitutional. In my op-ed, I explain why this battle is so critical.

Many readers were surprised to learn that just 13 states and DC allow consumers to order wine from out-of-state retailers — after all, there are thousands of wine shops online, and most seem willing to ship. Many California readers wrote me about recent wines they had ordered online from all across the country.

I’ve got some bad news: You’re breaking the law. In California, Senate Bill 118 (signed in 2005) prohibits out-of-state retailers from shipping into the state. As the law states, “any person who knowingly makes, participates in, transports, imports, or receives such a shipment is guilty of a misdemeanor pursuant to Section 25617.” Technically, a retailer can only ship to the state if they have a physical presence in California or a license.

Some larger merchants have locations across the country or have jumped through the regulatory hoops required to legally ship. But many retailers are ignoring these laws, figuring that they’re too difficult for states to enforce. Wine nerds may remember when, about three years ago, wine.com started lobbying states to better enforce these laws.

Just because these laws aren’t well enforced, though, doesn’t mean they’re not worth worrying about. The law is the law — and an unjust, discriminatory law should be eliminated. Unless the Supreme Court takes this case, wine retailers will remain in Constitutional limbo, with virtually no rights under the commerce clause.

Suppose you live in Texas and find that perfect bottle — perhaps the wine you had on your first date with your spouse — at a California retailer. Too bad. Or maybe you’ve discovered a great deal on your favorite Sonoma Coast pinot noir, but it’s from an out-of-state shop. You’re probably out of luck. No other industry faces such discrimination. Wine consumers deserve a free market in wine, one in which any adult can purchase wine from wherever he or she wants.

One another note. Several commenters took issue with the gun analogy, USING ALL CAPS TO ACCUSE ME OF “UNTRUTHS.” These people should learn how to use Google. Just go to Impact Guns or one of its many competitors. There, you can order a gun online and fill out all the required paperwork. They’ll then ship the gun to a retailer in your state that allows transfer, where you can go and pick it up.

UPDATE — 7:00PM — TOM WARK posts a better explanation at the StopHR5034 facebook page: “Technically, the law David references (SB 118) left California as a “reciprocal” state for wine retailers, while making CA a “permit” state for wineries. This means unless you live in a state that has a reciprocal agreement with CA for allowing it’s retailers to ship into California and Vice Versa, then retailers can’t ship into CA. The only state that has such an agreement with CA is Missouri. That said, the CA ABC has stated that its current regulatory disposition is to not pursue enforcement of out of state retail shippers. Nevertheless, CA remains a state that primarily allows its own retailers to ship to Californians, while legally banning out of state retailers from doing the same.”

Thanks for the clarification, Tom!

No Wine For You!

Posted by | Posted in Wine Politics | Posted on 12-10-2010

Wired takes a look at the wine vending machines in Pennsylvania, and writes the following:

“Can you believe that, in the 21st century, a place filled with household lasers, instant worldwide communication and Daft Punk’s amazing new Tron album, you cannot buy wine in a grocery store in Pennsylvania? Liquor can only be bought from state-owned and controlled stores.”

Shocking, isn’t it? Believe it or not, supermarket wine sales are also against the law in Colorado, Delaware, Kansas, Kentucky, Maryland, Minnesota, Mississippi, New York, North Dakota, Oklahoma, Rhode Island, Tennessee, and Wyoming. That’s a lot of states.

The reason for these laws, as the Competitive Enterprise Institute’s Angela Logomasini explains, is “to provide special-interest protections for existing wine retailers.” It’s the wholesalers, too. They view such sales as a threat to the three-tier system that serves them so profitably.

Fortunately, folks are pushing to reform these laws in places like Tennessee and Maryland. The Washington Post’s Dave McIntyre looks at direct shipping and corkage in Maryland, but he isn’t optimistic.

It’s time for an organization like the American Wine Consumer Coalition. Our nation’s liquor laws are designed to protect and serve special interests — not us.

Daily Wine News: Whipped Lightning!

Posted by | Posted in Wine News, Wine Politics | Posted on 11-30-2010

These shots need some Whipped Lightning.

Is buttermilk an “unsafe food additive” when combined with booze? Don’t be surprised if the FDA says so. Like Four Loko, “it has an excellent chance of hurting you, and a fairly good chance of tasting good.”

The Specialty Wine Retailers Association asks the Supreme Court if the 21st Amendment overrides the Commerce Clause, and therefore allows states to discriminate against out-of-state wine retailers. Tom Wark has more.

At WinePolicy, Angela Logomasini explains why it’s a good time to read up on direct shipping. She brings attention to an important paper from Wayne Brough at Freedomworks, my recent essay in the World of Fine Wine, and a piece she wrote on HR 5034 for Practical Winery and Vineyard. Angela’s article and Wayne’s paper are definitely worth reading.

Legendary wine writer Jancis Robinson looks at the expanding world of wine. Speaking of which, should I rip up my front yard and plant a vineyard? I’ve got about 1/16th of an acre to work with.

The Bible says that wine is a gift from God “to gladden the heart of man.” And finally, Israel is making some tasty wine. Having recently tasted and enjoyed an Israeli wine — a 2006 Galil Mountain Yiron — I’m already convinced.

Daily Wine News: Lawmakers go Loko

Posted by | Posted in Wine News, Wine Politics | Posted on 11-12-2010

Uploaded to flickr by yapsnaps.

Washington joins Michigan in banning Four Loko, a drink that “packs the alcoholic equivalent of 4 beers and the caffeine content of 3 cups of coffee in a single distastefully colorful 23.5oz can.” A letter in the Boston Globe argues that “the makers of Four Loko should not be chastised for their creation, but rather praised for their quality product idea and successful marketing strategy.” I agree. No word yet on when the nanny staters will prohibit people from mixing red bull and vodka.

BottleNotes explains German wine labels. They look confusing, but that’s only because they’re chock-full of information.

Howard Hewitt visits Michigan wine country for Palate Press.

Beer producers in Florida declare war on HR 5034. Awesome.

Over at TheHillisHome, a neighborhood blog in Washington DC, I profile wine educator and sommelier David Denton. He tells me that Hillary Clinton’s drink is a vodka martini – not wine.

Warren Buffett Bets on Wholesalers

Posted by | Posted in Wine Politics | Posted on 11-09-2010

Politicians love banal acronyms. Earlier this year, Rep. William Delahunt (D-MA) introduced HR 5034 , the “Comprehensive Alcohol Regulatory Effectiveness Act.” Supporters call it the CARE Act, as if alcohol wholesalers care about consumers any more than wolves care about sheep.

Posted to flickr by Art Comments.

The bill was literally written by the special-interest lobbying group that’s pushing to have it passed — the  National Beer Wholesalers Association.

This bill would roll back the Supreme Court’s 2005 Granholm decision by affirming states’ rights to ignore the Commerce Clause when it comes to alcohol. Put simply, this will hurt small wineries and consumers.

As Eric Asimov recently detailed, it would cut many consumers off from online specialty retailers. It could hurt direct shipping from wineries. And it will encourage even more consolidation in the wholesale industry, which will drive prices up for consumers.

Thankfully, HR 5034 stands virtually no chance of passing this year.  But the bill could easily return next year.

The proof? Last week, Warren Buffett’s Berkshire Hathaway purchased Tennessee’s largest alcoholic beverage distributor. This move came just months after Berkshire Hathaway also acquired liquor distributors in Georgia and North Carolina.

I’ve detailed this move — and what it means for consumers — in a piece for Reuters.

The wholesaling industry is incredibly well organized, and some alcohol wholesalers view this fight as their last stand — as success could ensure their long-term survival.

You may have noticed the advertisement on the right-hand side of the page for Stop HR 5034. Check it out, sign up, and also join Stop HR 5034 and the American Wine Consumer Coalition on Facebook.

Warren Buffett is smart. It doesn’t matter how logical our arguments are — and how inane the arguments of the wholesalers are. Politicians are for sale. If consumers are going to win the fight against wholesalers, we need to be as organized — and as politically influential — as they are.