1WineDude :: Serious wine talk for the not-so-serious drinker!: state wine laws

Showing posts with label state wine laws. Show all posts

The State of Wine in America (or "A terrible amount of luxury and unease")

Frequent 1WineDude.com readers, as well as anyone who has conversed even momentarily with me on twitter, will know that I'm a Pittsburgh Steelers fan.

Fans of the Dallas Cowboys, New England Patriots, and Baltimore Ravens may want to skip this post entirely, with all speed and probably extreme prejudice.

Are they gone? Good, let's get started!

Okay, I want to talk to you about the current state of wine in the modern world. I figured that I could work the U.S. presidential inauguration of our 44th President, the Steelers entrance into Super Bowl XLIII, and, of course, Wine. And tie it all together.

C'mon, it'll be fun. I hope...

Anyway, it's natural that, as we in the good ol' U.S. of A. celebrate the (long overdue) 44th consecutive peaceful transition of executive power from one affluent male to another affluent male, that we consider the 'state of things' - not just of the country, but for anything that we hold dear.

Like wine, for example!

Ok, so that transition was a little abrupt...

...and speaking of abrupt transitions and startling segues...

Being a Steelers fan, I'm finding the state of American Football particularly rewarding at the moment. So it's surprising (to me, at least) that I was able to control my blinding exuberance to notice a reference to Alice Munro in a recent, eloquently written Post-Gazette article by Gene Collier. Collier's article describes the unique and conflicting emotions that engulf the Steelers faithful when they host the AFC Championship game at home - a game that, until this past Sunday, they showed an ability to lose like no other team (emphasis added by me):

...modern Championship Sundays in Pittsburgh deliver a seismic coupling of pride and wariness, something realist short story master Alice Munro might call "a terrible amount of luxury and unease."

So, to recap.: that's 44th Presidential innaguration to The Steelers to The AFC Championship to the Post-Gazette to Alice Munro. All caught up? Good. "A terrible amount of luxury and unease" - a beautiful phrase, and one that uniquely captures my feelings about the current state of wine, at least in America.

To be a wine enthusiast in the U.S. is to be someone that lives with the joy of having thousands of wine brands sold in a market that continually drives up quality at all levels, while simultaneously not being able to enjoy those wines depending on what state you live in.

It makes me so terribly uneasy that I'm ending sentences with prepositions!

On one hand, the quality and selection of American wine has never been better. There has never been a time quite like this in the history of America, when it comes to Presidents, and when it comes to wine. In terms of quality and selection, this stage of American wine development trumps all others in history.

On the other hand, the unfairness, dishonesty, and bile of the state wine distribution monopolies has never been greater. To protect the revenue streams afforded to them via their monopoly position on the distribution of alcohol, many states are screwing the wine consumer - high prices, limited selection, curtailing your rights, and handicapping the free market (which screws other distributors, wineries, and you).

So, to bring us all up to speed here: that's 44th Presidential inauguration to The Steelers to The AFC Championship to the Post-Gazette to Alice Munro to the State of the American wine market to unconstitutional wine shipping laws.

Anyway...

How does the future look to me?

If you're talking U.S. executive world relations, or American Football, the future looks pretty damn good. In the words of Steelers coach Mike Tomlin: "Barack is selling hope. And I'm buying."

If you're talking the future for the American wine consumer, the jury is still out.

Cheers!
(images: amazon.com)

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The Future of Small Wineries in America...?

Forbes.com ran an interesting (and sobering) article this week about the future of small to medium wineries in the U.S. (primarily CA, WA, & OR).

What this article says is that, due to the proliferation of wineries, wine brands, and distributors (5000+, 7000+, and 450+ respectively - in the U.S. alone), consolidation is inevitable. Throw in the escalating fight for retail shelf space (usually won by the largest players with the most retail muscle) and skyrocketing land value prices in those aforementioned states, and you have an industry almost ripe for the picking. According to the Forbes.com article, a recent study by Silicon Valley Bank estimates that over 1000 of wineries in those states may change ownership in the next 10 years.

This is not just a situation impacting the U.S. Global competition is creating large wine brand conglomerates with global reach. And rising land prices are certainly not unique to U.S. wine properties - just check out Noble Rot to see what land value and inheritance taxes are doing to the Bordeaux wine area prices, which eventually are driving smaller players out of the market (and ins some cases, out of their family properties) entirely.

With all of this going on, you'd think that Internet wine sales might help to level the playing field for these smaller players.

And you'd be wrong. Way wrong...

Why? Because antiquated wine shipping and alcohol sales laws, as well as unfair state licensing fees effectively prevent many smaller wineries from selling their products online.

Those wineries that do brave the insanity of interstate sales have a heady task in front of them - according to the Forbes.com article:

"A winery shipping a single case to each state that allows direct sales (there are now 37) would have to submit 725 forms to conform with sales, excise and state income taxes."

That's not a joke.

This totally sucks, on two counts.

Wineries with amazing products can't get those products to people who want to buy them - resulting in lost sales, and, as mentioned in the Forbes.com article "family-owned microbrands have seen their pricing power and ability to demand shelf space trickle away." This is Bad for the U.S.'s ailing economy.
The average wine consumer also gets screwed in the process - fewer players controlling the wine brands available to you, and fewer ways for you to get those wine brands. So you can't spend your money even if you wanted to - also Bad for the ailing economy.

I've contacted the campaign centers for the presumptive 2008 U.S. Presidential nominees, Senators Obama and McCain, to find out where they stand on the issue of interstate commerce and wine sales.

So far, I've received nothing but canned responses... but I'll keep trying in the hopes that they answer, because for a geek like me this issue is part of the larger problem of archaic bureaucracy negatively impacting the economics of U.S. citizens. Watch this space...

Cheers!

(images: autocrisis.com, ecu.edu)

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How to Fix the Broken U.S. Wine Shipping System

I know what you're thinking, after reading the title of this post.

"Is the Dude about to go on yet another tirade about the PLCB? Okay, okay, they suck - we get it already..."

Well... the answer is "Yes." Sort of. I'm about to go on a bit of a tirade about the wine shipping laws not just of Pennsylvania, but also of WA, ID, AZ, CO, KS, MN, IA, WI, MI, IN, KY, GA, FL, SC, NC, NY, VT, CT, RI, and IL (pending review of currently proposed legislation).

The state of affairs of wine shipping laws in those states is almost hopelessly broken. Notice I say "almost hopelessly." That's because I've thought of a way to fix it. Let's break it down...

I say broken because those states have laws on the books that restrict the free trade of inter-state wine sales - a practice deemed unconstitutional at the federal (and for some also at the state) level. For the most part, these states are trying to protect state-run monopoly businesses that would be handed their own jock straps in the free market if, say, a big buyer like Costco were permitted to sell and ship wines directly to consumers in those states. The state run operations add extra cost while limiting value and selection - because they are monopolies, they don't need to compete on the basis of price or service. If individual consumer rights, or the best interests of local state wineries get in the way of their monopoly profits, those citizens are simply disregarded - even if the states' supreme courts have ruled against those practices. So, they make billions, pay big bucks to lobbyists to protect their position, and the state governments (for the most part) turn a blind eye to it all (probably because of the huge windfall).

How to fix this mess? Simple. Here's a 2-step process of playing politics that could turn the tide. The thing to keep in mind is that politics is almost always a numbers game. And it almost always involves you (the people getting screwed) getting off your keesters and getting active.

Stop buying wine from the state. I mean it. Don't buy wine from your state-run liquor store. What will this do? It will reduce the windfall (remember the part about this being a numbers game?). No profits, no windfall. No windfall, no paying lobbyists to turn the tide of free trade legislation. No lobbyists, no deceit-filled battles to block the spread of capitalism to the wine shipping business.

Disclaimer: I'm not advocating you breaking the law - and to be honest, your state's liquor laws are so convoluted you probably violated them already if you took any cough medicine this year. Anyway, I don't care where you get your wine, as long as it's not from a state-run monopoly. If you are lucky enough to live near a bordering state that does sell wine through the free market economy... well, I'm just saying that you might have alternatives.
Write your state legislators. This is still a numbers game, because far fewer people actually do this than you'd think. So, if you flood your state legislators with correspondence, eventually they will question whether the tide needs to turn against the monopolies. Especially if you followed step 1 (politicians likely won't stand by a sinking ship that is losing money) and indicate in your correspondence that you're a voter in good standing and any re-election bid support on your part will hinge on their demonstrated support of free trade.

Fortunately, writing your state legislators is very easy. Head on over to FreeTheGrapes.org - they will find your legislators e-mail addresses for you, and give you a handy form-letter to send them (don't forget to add the re-election support part - politicians usually don't like losing their jobs).

Maybe this sounds unreasonable, overly-simplistic and ridiculous to you.

But ask yourself this:

Is it any more ridiculous than a business with cripplingly poor business models, that can't compete on the basis of service, selection, and price, making in excess of $1.5 billion dollars a year by hiding behind antiquated laws and charging you artificially high prices?

What if your state controlled your cell phone service that way? Or forced you to buy milk only from the state, even though it was stored improperly and cost 35% more than what your cousin, who lives in the next state over, pays for his family's milk (which he can buy from wherever he feels offers the best milk at the lowest price)? Or limited your selection of underwear to a handful of brands and sizes?

Or treated women's designer shoes the same way? (scary... that one might have the potential to drive Mrs. Dudette to kill)...

Sure, there's a big difference between "essential" goods like bread and luxury goods like designer fashions. But before you write off wine as an item that is fair play for regulation by the "pleasure police" (Robert Parker's term for the alcohol regulators in his home state of MD), don't forget that two of our founding fathers (the two widely regarded to have had the most raw intellectual horsepower, by the way) - Jefferson and Franklin - viewed wine as an essential life good, equal to water and bread in terms of necessity.

So... who's being unreasonable?

Cheers!

(images: blog.whathappensnow.com, wine.appellationamerica.com, ronalfy.com)

Read the full article...

Wine Communism: U.S. State's Non-Compliance to Wine Shipping Laws

Here's a little quiz for all of you out there in wine-land. What do you call a government that:

Limits the choices of products available to its citizens by offering them only via government-run monopoly that has no incentive to provide competitive prices, good customer service, or expanded selection;
Charges its citizens a premium for the "privilege" of the products limited choices & poor service, including taxation on goods already controlled by the government;
Refuses to change archaic legislation that was enacted over 50 years ago, in order to protect its monopoly position & profits;
Does nothing to alter its stance or comply with changing federal law, nearly three years after its current legislation has been deemed unconstitutional at both the federal and regional levels?

In most circles, the first two points could be considered Communism.

Technically, the later two points aren't Communism, but I'd like to think that most people would at least consider them reprehensible...

Unfortunately, what I've described above is more-or-less what the state of Pennsylvania is doing in its wine trade, which is controlled by the Pennsylvania Liquor Control Board, right here in the good ol' U.S. of A.

Bucking the Law Means Big $$$ for States
Actually, now that I consider it, I haven't been entirely honest with you so far. Since the Federal government ruled that PA's liquor laws banning interstate trade were unconstitutional in 2005, the PLCB has done something. It's made money. Approximately $3 billion dollars in sales (that's Billion, with a "B"), in fact. That is roughly twice the GDP of the country of Liberia.

That's big, big money. In the case of the PLCB, it's record-setting sales money, all achieved while operating what has been determined an unconstitutional system.

This is not just impacting PA wine lovers (& wineries) - similar situations are playing out in other states. The ones who benefit are the middle-men (distributors and state governments). The ones who get the short end of the stick? That's you & me, baby (and the people making our favorite beverages!).

Distributors are - not surprisingly - paying big money to protect this windfall. What is surprising is that those same groups are claiming that money is not the motivator in their efforts to protect the "three tier system" of wine shipping. $3 billion in 2 years, seemingly operating unconstitutionally, and it's not about the money?!?? I don't know how they can even say that with a straight face...

Whether You Know it or Not, You're Being Taken for a Ride

If you live in one of the States that prohibits (or seriously discourages) direct shipping of wine, and you buy wine, then you're getting screwed. Your wine choices are probably limited. You might have little (if any) recourse to purchase the wines that you want. And likely, you're paying too much for the wines that you are able to get.

What You Can Do About It
Big money issues like this one will not go away on their own. They require that wine consumers who want a fair deal - people like you (and me) - fight back:

Visit the Shipment Compliant blog to find out where your state stands, and to catch the latest news in the fight for fair wine shipping for your state.
If you have a blog or website, read Tom Wark's posts on fighting back and link to support Wine Without Borders.
Visit (and support) FreeTheGrapes.org.
Write to your state legislators and let 'em know how you feel! I have (many times) - and trust me, some of them will respond!

Read the full article...

In the News: NJ Fights for Wine Shipping Rights (Give Us Free! - Part III)

Found a great article on Newsday.com today detailing how the current archaic U.S. state wine shipping laws are negatively impacting the budding wine production business in New Jersey.

And if you think NJ is not state with fine wine potential, then you've probably not yet tasted the premium reds from Tomasello Winery, which was one of the top favorite picks of Andrea Immer on her TV show Simply Wine. For the record, Tomasello has stopped shipping wine to consumers within their own state.

This same scenario is playing out with similar negative effects all over the continental U.S. You can do something about it - starting with writing to your state legislators to let them know how you feel.