There was quite a bit of excitement (or concern) when Amazon indicated intentions of adding wine sales to its already large offering last year. Seen as a step in the right direction for small and medium wineries, it seemed to be an opportunity to identify and serve a new set of customers that otherwise could not easily be reached, not to mention finally allowing wine enthusiasts access to wines that otherwise they could find or purchase.

Why? Because the three tiered distribution system in the United States doesn’t work very well for smaller wineries whose output and/or reputation cannot compete very well against large, high demand brands. If a winery finds itself on the outside of the system, there are few options to selling their product except locally, which may not be feasible or profitable.

In an article today by Wine & Spirits Daily entitled “Why Amazon Quit: Is it Wholesalers?  it  got me thinking about why it is so very difficult to change the wine shipment laws in this country. Is it the wholesalers? Well … yes.. there is a monopoly established in which they benefit greatly. But it isn’t just the wholesalers.

As suggested in the article, there really are now many entrenched interests in keeping the status quo:

• state regulators
• control state executives
• public health advocates
• industry policy wonks
• anti alcohol organizations
• …to name a few

The reasoning: ”vested interests in  preserving a system they contend has worked well for 75 years”

To some this statement is true. But to many others the system works well only to a point: It does not support freedom of choice for law abiding wine enthusiasts, it harms an industry with thousands of smaller brands that could otherwise employ more people, and it often hinders interstate commerce.

Progress continues to be made, but the battle for freeing the grapes will not be short term.

It never seems to amaze me that when we are still feeling the effects of the worst recession since the Depression of 1933 and someone in government comes up with a good idea (something we need more of !) that will promote local industry and increase local revenues, that the naysayers come jumping out of the closet only to use the same tired excuse for not  changing Prohibition Era laws that are either unnecessary, add cost,  or simply hinder business today.

Case in point, a change suggested to Massachusetts law by Sen. Jamie Eldridge D-Action that would allow Massachusetts wineries to sell and offer a tasting of their wines at farmers’ markets in the state.

What’s the problem?

According to a report from WBZ News:

“The bill is strongly opposed by liquor store owners, who also led the resistance to a 2006 ballot question that would have expanded the sale of wine in supermarkets in Massachusetts. Voters defeated that measure by a 56-44 margin.

Frank Anzalotti, executive director of the Massachusetts Association of Package Stores, said Eldridge’s bill is “fraught with peril” because there would be no guarantees that workers at farmers’ markets are properly trained to weed out minors.”

Now one would think this “concern” can be easily rectified and/or soothed:

1. Assuming the wineries are using the same employees that pour at the winery itself, there is no issue as these people are trained – and just as competent to pour as those in a liquor store (in some cases they are family members that have a lot more to lose than a hired employee at a retail store).
2. Assuming the wineries decide to hire new employees  and/or contract for a particular event, the bill could stipulate that anyone selling or pouring must be trained.

I can’t think of any small winery in Massachusetts that would put their license in jeopardy in order to move some bottles at a farmers’ market. I also doubt there would be a huge drop off in sales at liquor stores around the state as many do not carry or only minimally carry locally produced wine.

Let’s be honest: allowing the tasting and sales of locally produced wines at farmers’ markets of an by itseld will not drastically increase sales. I would think that most people would buy one or two bottles, not walk away with several cases. However, what it will do is allow more people in Massachusetts to become familiar with and hopefully interested in locally produced wines.

What is the benefit?

• Massachusetts wineries would have the opportunity to get their wines seen and tasted by those who may be totally unfamiliar with their wines. This could mean immediate incremental sales at the farmers’ market or equally as important, new repeat customers of the winery direct through a wine club or similar, or perhaps by purchasing these wines where available at a local retail liqour store, resulting in increased sales for the store(s) and the wineries.
• As stated, local retail outlets could now find a local interest in purchasing Massachusetts wines. They would have the ability to stock more of these wines and increase their sales.
• The State of Massachusetts would benefit by helping to grow a nascent industry that based on growth would now be paying more taxes and perhaps hiring additional personnel (who will pay more taxes).

Bottom line: if we can allow guns to be bartered and/or sold at events without requiring the normal waiting period or background check, I think having a small taste of wine, and then subsequent sales to adults is not only quite reasonable, it makes good business sense. 

Distribution (sales or bartering) of automatic weapons to unknown individuals makes me “fraught with peril”, and is likely less deadly than a sip of wine.

Let me make it clear:

I am not a resident of New York … so maybe not my business?

I am not a lawyer or judge, or hold a law degree…. so maybe I don’t know what I am talking about?

What am I?

I am a wine lover and enthusiast, and a believer that if something doesn’t make sense .. it isn’t true! (thanks Judge Judy for that one

So I find it fitting on this occaison and celebration - the 4th of July 2009 - to comment on a recent ruling by a three-panel judge in the Second Circuit Court of Appeals, which illogically upheld a similar judgement from 2007 regarding restricting direct shipment of wine to consumers in New York from out of state retailers when the state of New York allows shipment from in state wine retailers.

If I recall in Granholm vs. Heald in 2005 the court ruled that a state cannot discriminate between in state and out of state wineries – that if the state allows in state wineries to ship directly to consumers, it must also allow out of state wineries to do the same. The issue was pitting the right of states to control the sale and distribution of alcohol (set after Prohibition) against the the Commerce Clause in the Constitution (hence how fitting on the 4th of July!).

Help me out here everyone:  How can it be constitutional for a winery to be able to ship and not a retailer? Isn’t this the exact same principle coming into play, the only difference is the shipment would come from a retailer and not the winery itself?

Steve Heimoff in his blog “Wine suppliers are not the new Mafia provides some good insight into the decision.

Alright .. of course I know the issue: MONEY and MONOPOLY… that’s it in  nutshell.

Forget about underage drinking and tax losses. Both of these can easily be accommodated as they already have in states that allow out of state shipments.

Unfortunately, whenever money and control are at stake there is going to be a struggle.

Hey .. let’s look on the bright side .. the law firms involved will make a mint (no reference to the Federal Reserve intended !