Wine Shipping Conflict Going to Supreme Court?

In many states around the US, laws have been crafted to favor local wine retailers or distributors over out of state suppliers. Now, the Supreme Court has been asked to rule on a Texas law which permits Texas retailers to ship wine to in-state addresses but denies that opportunity to out-of-state retailers.

At issue in the case of Wine Country Gift Baskets v. Steen, decided in the Fifth Circuit Court of Appeals, is whether, notwithstanding the 2005 Granholm v. Heald decision that determined States may not discriminate against out-of-state wine producers, the Twenty-first Amendment overrides the Commerce Clause and allows States to discriminate against out-of-state wine stores. The Specialty Wine Retailers petitioning the Supreme Court contend that the Fifth Circuit, as well as the Second Circuit, has turned the Granholm decision upside down. Rather than construing the Granholm decision as a prohibition against discrimination, these courts have interpreted that decision as a license for states to discriminate against inter-state commerce. [From Wine Retailers Appeal to the Supreme Court Over Discrimination in Wine Shipping.]

It goes without saying that laws like those in Texas benefit only a few local businesses while greatly inconveniencing wine enthusiasts by limiting their choices. Sometimes laws like this are described as being necessary to protect minors from drinking, a ridiculous assertion. Is an underage drinker likely to order a few bottles of $40 California Cabernet Sauvignon to get a quick buzz?

Another key inequity is that 38 states allow out-of-state wineries to ship to residents, while only 13 extend the same privilege to wine stores. This makes no sense from a consumer protection standpoint, and serves only to handicap out-of-state retailers. As explained at Fermentation:

There is no difference between the transaction or logistics involved in a winery selling to consumers and shipping wine to consumers on the one hand and a wine store selling wine to consumers and shipping wine to consumers on the other hand. More importantly, the arbitrary state bans on wine stores-to-consumer shipping means that consumers have far less access to wines than they could other wise. It means that many wine shops don’t have access to the commercial revolution that other industries have experienced due to the Internet and highly efficient shipping methods.

For more information, visit the Specialty Wine Retailers Association. Our blog is based in Texas, and I’d love to be able to order some unusual boxes which aren’t in the Texas retail system. Let’s hope the Supreme Court hears the case and opts to protect consumers instead of special interests.

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