New Bill Threatens to End Direct Wine Shipping: "More and more like a monopoly"

By Evan Dawson, Finger Lakes Editor

Congress could soon decide whether consumers can buy wine directly from wineries, and legislation is moving more quickly than many industry observers anticipated.

A bipartisan bill (HR 5034) would give more power and control to states, which would strengthen the current three-tier system of distribution. The bill is championed by the Wine & Spirits Wholesalers of America (WSWA), but it's opposed vehemently by winery owners across the country -- including some here in New York state.

In a statement released by WSWA, CEO Craig Wolf said, "America's regulated three-tier system is -- hands down -- the best beverage alcohol distribution system in the world."

In response, one New York state wine industry executive who asked not to be identified told me, "This is coming from the head of the most exclusive millionaire's club in America. There are fewer distributors in each state now, and that's not competition. The consumer gets hurt when we lose competition. And what happens when the largest distributors just swallow up the smaller ones? It starts to look more and more like a monopoly."

The New York Cork Report has spoken to numerous industry professionals, but due to the sensitive nature of their relationship with distributors, none wanted to comment on the record. We encourage open discussion in the comments section of this post, as it is a vitally important topic.

Retailers and other professionals are offering swift reactions to the bill. "Congress, backed by the Wine & Spirits Wholesalers of America are looking to pass laws that will not allow you to purchase wines from retailers outside of your home state," wrote Daniel Posner, owner of Grapes The Wine Company, in an email to his customers (many of whom are outside of the company's New York home). "You do not even realize what is going on in your own backyard, but it is very bad."

For more information, read stories on Wine Business.com and Wine Spectator.

Comments

[Lenn Thompson]

When I first heard about this, I thought it was a late April Fool's joke, it's so ludicrous.

This will be devastating to all but the largest of wineries in this country, and many retailers to boot.

I understand why more industry folks won't go on record here, but I'd like to hear from more of them, even if they comment anonymously.

What can be done about this? Just how large an impact would this have on their businesses?

To me, this is the exact opposite of the direction we should be going with regard to direct shipping. Horrible news.

[Matt mmWine Horbund]

Great post Evan, as always. I saw Tom Wark's first and submitted it to Digg. Doubt it'll make front page - but it's something that will impact every wine lover in the US. Hopefully, a call to action and a rise in awareness will stop this bill.

The post on digg:
All your booze are belong to us: http://digg.com/d31OnBe?t

Matt

[Daryl G]

Very depressing. Looks like us wine lovers may have to start our own wine swapping network. Is anyone aware of any state and/or federal laws regarding consumer-to-consumer shipping?

[Chris]

I have a real problem figuring out why a Democratic Congress would push for this, other than a money motive? The only answer I can see is money from taxes,and campaign money from the huge wholesalers that want to control the distribution system.

[Joshua S Sweeney]

Luckily, it started making it into the news today. At 3AM this morning, the News & Record in Greensboro posted a piece on it, and they let me get a word in edgewise:

http://www.news-record.com/content/2010/04/26/article/coble_bill_to_fortify_alcohol_restrictions_upsets_wine_lovers

Now the Wall Street Journal bloggers are taking notice, which means it's only a matter of time before the mainstream news outlets get involved. We're doing the right things to take the drivers seat in rhetoric, as the reps seem to be passively "co-sponsoring" this abomination.

If I can get mention in a news story on it, there are hundreds of wine writers such as you guys who have significantly more weight behind your words. We need to seek out those who will listen before the lobbyists do!

[Joshua S Sweeney]

@Daryl G,

Most states have much stronger laws against consumer to consumer shipping. I can't even think of any off the top of my head that allow it.