The Wall Street Journal’s article “Web’s Final Frontier: Vintners Face Hurdles Governing Online Sales; Laws Vary by State, County” A thought provoking title to begin with and a good citation for the wine and alcoholic beverage predicament we find ourselves in today in the United States.
The second paragraph politely in this article says the difficulty in shipping to consumer is a “patchwork of U.S. and state regulations governing alcohol sales…..directly to consumers’ doorsteps a mind-boggling proposition.” There are an estimated 40,000 alcohol beverage control laws in the US and every state is so vastly different that a 50-state distribution is completely inconceivable and the current beverage control framework is strictly impossible to comprehend let alone work in. Market ideals stop at alcohol beverages door–it is unfortunate and the myriad of extremely outdated and non-sensical laws on the books need a deep scrubbing and better yet many need to be eliminated. The state’s alcohol beverage control laws are least likely to reform themselves–legislators and a public dancing between enjoying wine and other alcoholic beverages and yet are afraid to demand reform.
On any given day in America someone or rather many people have broken a law didn’t know existed–better yet the alcohol beverage control authorities are at odds with themselves to understand their spun webs of confusion in code and laws. Having the privilege of working with a few ABC (alcohol beverage control) authorities I had to point out a specific allowance for a permit–if I had not a permit would not have been granted. The front line of all ABCs are not equipped to deal with the many on and off premise businesses, as well importers, distributors, events and god forbid the public. The wine, beer and spirits categories are large and complex–regulators have a hard time understanding a lesser-known varietal, regions and many other aspects.
Here is a great illustrative point; it is a scene from a winery tasting room I visited this past year:
Customer: I want this shipped to my house in Kansas
Tasting room employee: I am sorry sir–we can’t ship to Kansas–we are not allowed to do so.
Customer I had wine shipped to my house before
Tasting room employee I am sorry sir, we can’t
Customer Okay; ship it to my office in Missouri
This article keenly points out that Wine.com pays $2 million in fees and licenses–this is absolutely key to why reform will never happen; those state, city, county, and special government entities are taking in a lot of sin tax. Very few businesses can afford to pay this steep amount and hence a great recipe from keeping a vibrant wine retailing community from being online, lack of competition and smaller assortments can be insured.
It is one thing to have a licensing requirement–quite another to mandate every aspect of control on alcoholic beverages. Everything from not allowing an advertised sale to be published but it is okay to have just as long as nobody knows it (Missouri). Higher alcohol percentage wines above 15% in DC and shipped wines to Texas–never mind that spirits is at least double that….. Some governmental bodies have also forbidden screw cap–the best explanation for this has been explained to me is that anyone can open this bottle. Private label is illegal in Idaho and Georgia. After the repeal of Prohibition states were allowed to make as many non-sense ABC laws as they saw fit–further all governmental bodies could create further regulation by either a special government body or a special zone.
And as this article points out that Wine.com could not ship a food and wine basket to New York–other problems just as ridiculous exist. Alcohol in food (chocolate liqueurs), who can retail these foods? If a retailer sells both food and wine they have to be quarantined sections. And also in New York separate entrance and stores are required –think Trader Joe’s in Manhattan–two separate but not necessarily equal stores.
Though prohibition was repealed five generations ago–the after effects lingers on like a bad mid-winter’s cold. The quest to repeal Prohibition — a public excited to rid it, law enforcement no longer needing to enforce the absurd notion of this Act-everyone was too eager to not look closely at the fine print. Again, a public will need to push for true reform otherwise it will never happen. The most regulated good of all time does well here in the US but imagine if there was true competition. The web’s final frontier, at least, in the US may always be a Mariana Trench of great depth and something that can’t be touched.
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