| Author |
Message |
    
Dave
Supporter
Username: Dave
Post Number: 6399
Registered: 4-1997
| | Posted on Monday, May 16, 2005 - 2:53 pm: |     |
http://news.bbc.co.uk/2/hi/business/4552429.stm
quote:
US lifts ban on out-of-state wine
US states cannot prevent their citizens from buying wine directly from vineyards in other states, the US Supreme Court ruled on Monday.
The ruling overturns a 70-year old law, in place since the 21st Amendment ended Prohibition.
Under these laws, states could regulate alcohol from out-of-state and only allowed it to be sold through wholesalers, which added a mark-up.
The ruling will enable consumers to buy from wineries via the internet.
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Nohero
Supporter
Username: Nohero
Post Number: 4477
Registered: 10-1999
| | Posted on Monday, May 16, 2005 - 8:13 pm: | |
quote:The ruling will enable consumers to buy from wineries via the internet.
Finally, there's something useful on the Internet.  |
Soda
Supporter
Username: Soda
Post Number: 3223
Registered: 5-2001
| | Posted on Monday, May 16, 2005 - 11:33 pm: | |
Visited two NJ wineries over the weekend. Hope they send all their stuff outta state...
-s.
BTW: Huzzah! |
Hank Zona
Supporter
Username: Hankzona
Post Number: 3275
Registered: 3-2002
| | Posted on Tuesday, May 17, 2005 - 8:20 am: | |
there are 3700 wineries in the US...most are too small to garner wide exposure from distributors. The repeal of Prohibition left it to the states to regulate the sale of alcohol within their borders. Interestingly, the decision yesterday doesnt allow wine to be delivered to all states now, it allows wine to be delivered to states that will allow delivery of wine. Nonetheless, it should make more wines more accessible to people. Although there has been a wine glut of sorts of late, it could make for some price competition or maybe lead to bigger buying out smaller wineries (both just guesses on my part...nothing scientific behind those). The folks who stand to lose the most and who have a very strong lobby...the distributors. The folks who stand to gain the most...small producers and consumers. Its a $21 billion industry in the US and growing...there seems to be alot to go around still for everyone involved. I havent read anything extensive about it yet, but I did hear that the 5-4 Supreme Court vote was split along fairly atypical lines...at first I thought it was a vote of "states vs. federal" but not so sure now. Will be interesting to read and hear more about what was behind the different justices' decisions (maybe its obvious but not only am I not a scientific mind, Im not a legal mind either). |
LilLB
Citizen
Username: Lillb
Post Number: 644
Registered: 10-2002
| | Posted on Tuesday, May 17, 2005 - 9:05 am: | |
This reminds me how annoyed I am about Liquor Laws- they seem so incredibly antiquated. In NY you couldn't by liquor on Sunday, here, you have to wait until 12:00 to buy liquor on Sunday. It's not that I'm going to be mixing martinis at 10 am, but when you're out at the store picking up a few items and know you want to have a bottle of wine for the evening, you should be able to buy it at the same time you're buying your steaks. It's just ridiculous........ Rant over... |
xavier67
Citizen
Username: Xavier67
Post Number: 517
Registered: 6-2002
| | Posted on Tuesday, May 17, 2005 - 11:05 am: | |
I wonder if this lifting of the restriction will allow importers to sell directly to consumers. There are several importers (like Louis Dressner's) whose portfolios aren't well represented in our local stores. Even if allowed, would the importers want to do this???
What are your thoughts, Hank? |
Hank Zona
Supporter
Username: Hankzona
Post Number: 3278
Registered: 3-2002
| | Posted on Tuesday, May 17, 2005 - 11:24 am: | |
xavier,
I didnt even think of it in terms of imports. As a $21 billion business in the US, primarily run by distributors who now stand to lose marketshare (the most likely scenario is losing it to internet sales), maybe distributors will turn more of their attention overseas. Or maybe more distributors will develop private label wines, domestic or imported. It should lead to more marketing and advertising but the small wineries (I cant call them mom and pop...despite being small they still arent owned by many traditional "mom and pop" combos), although now more able to sell directly, still will suffer from economies of scale.
Another analogy that just crossed my mind...in another thread, I wrote something about how the tail of music sales may now outsell the head, or the smaller, less requested recordings that the superstores dont carry have increased dramatically in sales because those same retail outlets only carry the top names/guaranteed sellers. The main distribution of course for these "tail" sales is the internet. Maybe the same will happen with wine. Will distributors finally go more aggressively after small domestic producers and give them a better cut now since getting a smaller piece of the pie is better than no pie at all? Will they cede the small producer market in the US to the internet and go for distributing more imported wines who really need more help getting a toehold here? Will the top 25 producers just blast the market with more marketing and advertising to grab even more marketshare?
I am guessing distributors already have a plan in place since the possibility of yesterday's ruling was out there for some time now. I guess I should speak with some distributors.
One more group who benefits from yesterday's ruling...UPS and FedEx. |
Dave
Supporter
Username: Dave
Post Number: 6408
Registered: 4-1997
| | Posted on Tuesday, May 17, 2005 - 12:07 pm: | |
quote:Another analogy that just crossed my mind...in another thread, I wrote something about how the tail of music sales may now outsell the head
That's the Long Tail:
http://longtail.typepad.com/the_long_tail/ |
dave23
Citizen
Username: Dave23
Post Number: 288
Registered: 5-2001
| | Posted on Tuesday, May 17, 2005 - 1:37 pm: | |
Unfortunately, this will not affect NJ. We still will not be able to get wine by mail (unless the legislature changes the law). |
Dave
Supporter
Username: Dave
Post Number: 6410
Registered: 4-1997
| | Posted on Tuesday, May 17, 2005 - 3:09 pm: | |
The court's decision overturns the law. |
Hank Zona
Supporter
Username: Hankzona
Post Number: 3289
Registered: 3-2002
| | Posted on Tuesday, May 17, 2005 - 3:50 pm: | |
I believe the court's decision allows shipping of wine by mail interstate as long as the state already allows shipping of wine by mail intrastate (if a state has a law against all shipping of wine directly, then the court ruling doesnt apply -- the decision was based on the fairness of allowing other states to ship wine, not just within the state itself)...since I never ever considered buying wine from a NJ winery and shipping it to my home, Im not quite sure what the law is exactly in the Garden State. |
ML
Supporter
Username: Ml1
Post Number: 2508
Registered: 5-2002
| | Posted on Tuesday, May 17, 2005 - 3:53 pm: | |
I read this morning that it doesn't because NJ doesn't allow delivery from in-state wineries, so it can still prohibit deliveries from out-of-state wineries. The decision affects states that allowed their own wineries to deliver, but prohibited it from other states' wineries.
Apparently, it was because the states were restraining interstate commerce in a product that they otherwise allowed to be sold in their states. |
ML
Supporter
Username: Ml1
Post Number: 2509
Registered: 5-2002
| | Posted on Tuesday, May 17, 2005 - 3:55 pm: | |
According to the Star-Ledger:
quote: The ruling, which was being heartily toasted by winemakers and wine drinkers in many parts of the country, will not apply in New Jersey, however.
The high court ruled specifically that states cannot block shipments to consumers from out-of-state wineries as long as shipments from in-state wineries are allowed. Last year, New Jersey banned shipments from Garden State wineries, which means the state has the authority under yesterday's ruling to continue blocking out-of-state shipments as well.
http://www.nj.com/news/ledger/index.ssf?/base/news-0/1116307111252740.xml |
Hank Zona
Supporter
Username: Hankzona
Post Number: 3290
Registered: 3-2002
| | Posted on Tuesday, May 17, 2005 - 3:56 pm: | |
thanks ML (MOL's Edge look-alike)...your explanation made more sense than mine! |
ML
Supporter
Username: Ml1
Post Number: 2510
Registered: 5-2002
| | Posted on Tuesday, May 17, 2005 - 3:57 pm: | |
It's kind of a no-brainer. The Constitution expressly prohibits states from restraining trade from other states.
My guess is a lot of states will respond by simply prohibiting all diret deliveries from wineries. |
ML
Supporter
Username: Ml1
Post Number: 2511
Registered: 5-2002
| | Posted on Tuesday, May 17, 2005 - 3:59 pm: | |
Hank,
I meant a no-brainer for the Court, not you. Our last posts crossed in cyberspace.
I look like The Edge, huh? I guess that's why he wears a hat all the time. |
Hank Zona
Supporter
Username: Hankzona
Post Number: 3291
Registered: 3-2002
| | Posted on Tuesday, May 17, 2005 - 4:03 pm: | |
it was mentioned in the word association thread after a picture of the Edge and Bono was posted.
As for the alcohol laws, when Prohibition was repealed, putting the power in the states was specifically tossed in, even though they knew at the time it was an exception to the interstate commerce laws. The distributors' lobby is an extremely strong one..its safe to say they will at least fight it on a state level now (and most certainly already began). If they win will depend on just how much money they spend I reckon. With some powerful distributors here in NJ, lets say theres a good chance the law wont change on the state level immediately. In New York, the lobby may not be effective because NYS has alot of smaller wineries and would love to be able to widen the promotion Im sure. |
xavier67
Citizen
Username: Xavier67
Post Number: 519
Registered: 6-2002
| | Posted on Tuesday, May 17, 2005 - 4:10 pm: | |
"Last year, New Jersey banned shipments from Garden State wineries..."
Now, why would they prohibit wineries from selling and shipping wines yet allow retailers (like, The Wine Library, or The Wine Messenger) to sell and ship wines? Can there be more naked (in terms of who was behind it and why) law than this? |
Oscar Levant
Citizen
Username: Map_le_wood
Post Number: 40
Registered: 10-2003
| | Posted on Tuesday, May 17, 2005 - 4:13 pm: | |
This was hardly a "no-brainer", as evidenced both by the 5-4 vote and the lack of an ideological split on the Court. In fact, the clear language of the 21st Amendment seems to argue for a different result:
"Section 2. The transportation or importation into any State...for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited."
The case is however part of a continuing line of cases that de-emphasizes the apparently plain language of the Amendment and instead subordinates it to the Commerce Clause.
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Oscar Levant
Citizen
Username: Map_le_wood
Post Number: 41
Registered: 10-2003
| | Posted on Tuesday, May 17, 2005 - 4:25 pm: | |
Xavier67: New Jersey, like many States, adopted a "3-tier system" after repeal of Prohibition. This system required the strict separation of manufacturer, wholesaler and retailer. Generally, this meant that manufacturers could only be in the manufacturing business, wholesalers could only sell wholesale to retailers and retailers could only sell to the public. (The reason for this strict separation of functions traces back to the days before Prohibition when breweries owned their own saloons, which pushed product indiscriminately and operated irresponsibly.)
That is why retailers can ship to the public and others cannot. Over the years a few exceptions have developed, such as brewpubs and small wineries, and they are allowed to both produce product and sell it to the public.
I'll bet that New Jersey's wholesalers saw that the Supreme Court could rule the way it did and got the no in-state shipping law passed (probably over the small wineries' objections).
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ML
Supporter
Username: Ml1
Post Number: 2513
Registered: 5-2002
| | Posted on Tuesday, May 17, 2005 - 4:38 pm: | |
I guess the term "no-brainer" was a bit strong, but it seems to me that the case was decided properly. Since the 21st Amendment and the commerce clause are in opposition, the Court had to decide what makes sense in practice. Since states are already allowing wineries to ship direct (if they're in-state), there is no practical value to excluding out of state wineries. Since there's no practical difference if I consume wine shipped to me from a NJ winery or a NY winery, the prohibition only works on one level -- as a restraint of interstate commerce. |
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