Wine Industry Consumers: Join, Help, Fight!!
Posted by Tom Wark on Oct 9, 2009
It has been a while since I posted an update on the status of the Specialty Wine Retailers Association. the organization for which I happily serve as Executive Director and that is leading the effort to give wine stores and consumers the legal right to transact business with one another. So here goes.
In 2006 SWRA sued the state of Texas. Texas allowed its own wine stores to ship wine to Texans but prohibited out of state stores from doing the same. That s blatant discrimination and protectionist to-boot. In a Texas Federal District Court the judge said such discrimination was unconstitutional and sited the Granholm v. Heald Supreme Court decision from 2005. Wholesalers, distributors and the State of Texas didn t like the sound of this, so they appealed to the Fifth Circuit Court of Appeals.
However, the Texas judge also declared that while that kind of discrimination is unconstitutional, Texas may require that all out of state wine stores wanting to ship wine to Texas consumers must first purchase their wines from Texas Wholesalers. That s impossible. SWRA Appealed .
At this moment we await a decision from the 5th Circuit. It could come any moment and many people are watching this decision very closely.
In the meantime, SWRA continues work to increase its membership, fund raise, lobby and educate consumers and the trade.
What s at stake? Today there are hundreds of thousands of wines available in the U.S. marketplace. But in any given state only a relatively small number of those wines are available to consumers. If they want to get them, they ll need to buy outside the state directly from wineries or from out-of-state retailers.
Thirty-Seven states now allow out-of-state wineries to ship wine to their consumers. But what happens when the winery is sold out of the wine? Well usually you can find the wine at a retailer in some state or at auction at a brick and mortar or on-line auction house. But only 13 states allow out-of-state wine stores to ship to their consumers.
What happens if you want an imported wine from Austria or France or Germany or Argentina or Madagascar or Israel, but it s not available in your state? You ll need to get on the Internet, do a little searching and find out which wine retailer has it in stock. But only 13 states allow out-of-state wine stores to ship to their consumers.
Which States allow their citizens to have wine shipped to them from out-of-state wine merchants? NH, VA, WV, LA, NE, ND, WY, NV, AK, OR, DC, NM, MO. Chances are, your state isn t on that list.
It should be obvious why this is a problem for consumers.
But why is it a problem for the Wine Industry?
For wineries, these restrictions and prohibitions on wine retailer shipping means a very simple thing: you don t sell as much wine. When retailers are prohibited from shipping into states, that means retailers don t sell as much of your wine. They don t reorder as quickly. And your brands don t get the wider exposure they need.
For wine stores that understand the Internet has created a national marketplace and who are inclined to take advantage of it as well as the increase in consumer interest in wine, these protectionist restrictions on shipping reduce your revenue, reduce the value of your business and brand and make it harder for you to make a living.
If you are a wine retailer that is taking orders on the net you SHOULD BE A MEMBER OF SWRA IF YOU ARE NOT ALREADY! The dues are minimal: the equivalent of your wholesale cost on a case and a half of $30 or $40 srp wine. But beyond that, this is no time to sit on the sidelines as opponents of your right to sell wine legally and ship it to your customers are working to make sure you never get to access the real market for wine.
If you are a consumer you SHOULD BE SUPPORTING SWRA AND GETTING READY TO TELL YOUR ELECTED OFFICIALS TO STOP PANDERING TO A SMALL GROUP OF WHOLESALERS WHO DON T GIVE A DARN ABOUT YOUR ABILITY TO ACCESS WINE.
So who opposes the right for consumers to have wine shipped to them from out-of-state wine stores? Wholesalers and distributors. The Wine Spirit Wholesalers Association leads the charge, claiming minors will get their hands on alcohol and claiming that retailers can t be trusted to remit taxes.
The National Beer Wholesalers oppose retailer shipments too, claiming it will destroy the three tier system that mandates they too get a cut of nearly every bottle of beer sold in America, whether their services are needed or not.
Most state based wholesaler associations don t want you to have access to any wines their members don t bring into a state.
These are very powerful forces that give campaign donations like it s candy, that have extraordinary access to the halls of government and that masquerade as advocates for social safety while merely protecting their privileged position inside the three tier system.
SWRA remains the only trade and consumer organization in America dedicated to giving retailers and consumers the ability to transact business with each other efficiently and legally.
If you are a wine lover or wine retailer, isn t it time you stepped up and did something to help yourself and the industry?