Laws that make sense – a novel idea!

“In a move that will provide much-needed economic development to struggling wineries, grape growers, and small businesses, a comprehensive proposal has been introduced in the New York State Senate that will allow for the sale of wine and liquor in supermarkets and groceries and also enact vital reforms to the state’s “Blue Laws” to benefit liquor store owners.” This was the first paragraph of a story I read yesterday on Newsjunky.com that got my attention.

The reason it got my attention is that this is a second attempt to allow sales of wine in grocery stores in NY. The first attempt failed based on strong opposition from mom and pop liquor stores that rightly noted many would be put out of business due to current Prohibition era “Blue Laws” that limited them to one liquor license as well as restricted hours and what they can sell.

Why is this so important to New York? Simple. The New York grape growing industry is the third larget in the country and the potential for additional visibility and sales (dah, tax revenue) is significant.

Who coud it benefit? Well … certainly the New York wine industry, also grocery stores could boost their sales, and yes, even mom and pop stores would have additional freedom to expand their business due to changes in the laws. Consumers would also benefit in convenience and likely lower cost due to competition. The State of New York would benefit from addtional tax revenue as well as perhaps lower cost due to less regulation (paperwork).

Who would it hurt? Well, for those mom and pop stores that were marginal to begin with, this could be the straw that breaks the camel’s back.

Why did I take notice? After all I don’t live or work in New York.

Simply because this is how government I believe should work:

Review a problem from various perspectives,
Create new laws is warranted, or fix or amend antiquated laws that simply don’t make sense, and
Implement a better system where everyone can benefit (assuming everyone is willing to make some small changes to take advantage of the new legislation).

In the process, there is less regulation, but more business. Geez , sounds like common sense?

Hang on!

New update: another article this morning in Timesunion.com that has an interesting rebuttal from Jeff Saunders of the Coalition for the Last Store on Main Street. He makes two points:

The large grocery stores will use this to put the mom and pop stores out of business. This seems like a grey area in that the changes to the ”Blue Laws” are meant to place these stores on a much more equal footing. Not being fully knowledgeable on the current or future changes, I will leave this one up to debate in Albany.
No new legislation has been enacted in any State for the last 23 years that allows the sale of wine in grocery stores. Hmmmm. Yup .. thats a great argument! Almost holds as much sense as keeping all the Prohibition era legislation that hasn’t seen change in over 75 years that inhibits interstate commerce, puts a huge burden on small and medium sized wineries, greatly reduces consumer choice, and continues to foster a funnel stranglehold on the wine industry for no reason other than to ensure that the current monopoly continues.

Any idea what side I am leaning towards??

UPDATE August 7, 2009: Looks like someone may agree with me!

UPDATE August 10,2009:

And the saga continues ….

Another Not So Grape Decision!

Posted by Richard Beaudin on Jul 4, 2009 in Wine Shipping & Distribution | 0 comments

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 !

Welcome to the 21st Century .. or not?

Posted by Richard Beaudin on Jun 8, 2009 in Wine Shipping & Distribution | 0 comments

All right … this ever happened to you?

Let’s say its your child’s birthday and you want to purchase a special toy for him/her. You go to your local Toys R Us and they tell you that they don’t carry it in your state, but you can purchase it at a store in another state.

You go home, get on the net and look up the store. You find the toy you are looking for and put it in your shopping cart. You enter your information and hit the “buy” button. Instead of providing you a comfirmation page you get the following message:

“We are sorry but our records show that this toy represents the 13th you have purchased from us over the past year and your state only allows you to purchase one dozen yearly. Please buy from us again after (the date)”.

That’s nonsense, rediculous you say … well not so fast. This is one of the many rules in place or being put in place in many states where you can purchase as much wine from an in state winery as you would like, but you are limited when purchasing from an out of state winery.

Sound a bit unfair? Or, perhaps do you smell private interest or influence?

Unfortunately since the repeal of Prohibition in 1933, states were given the right to setup their own rules and regulations when it comes to alcohol. Frankly, many of the restrictions made sense at that time based on the illegal activity prevalent during Prohibition and the state of distribution, licensing and administration.

I am sure you have heard the old adage “if it ain’t broke, don’t fix it”. Well here we have a situation where for the wine consumer it is often broken both in terms of cost and choice, but for those involved in distribution monopolies and/or those that have businesses that thrive on the staus quo, it is working just fine!

One recent example is a new wine shipping law in Tennessee (Senate Bill 166) that would allow out-of-state wineries to ship up to 3 cases per year if they obtain a $300 non-refundable application fee and then a $150 annual permit fee. Tennesee is not alone in setting fees and limitations on shipments of wine or the size of the winery.

If availability (volume) is the issue, why then isn’t there a limit on in-state purchases from wineries or retailers?

Is the limitation in place to safeguard state revenue? Nope.. Taxes can’t be an issue either since the out-of-state wineries must be licensed.

Alright .. is it access? No not really since the state can mandate that all shipments must be signed for by someone over 21. OK … so perhaps the issue is that the delivery companies don’t have trained drivers? Not likely, most drivers have families to feed and are just as likely as any clerk in a retail outlet to safeguard their jobs.

My point: states are little by little opening up to the 21st century (internet) when it comes to wine sales, but we have an awful long way to go before consumers finally have freedom of choice when it comes to wine purchases, and the “it ain’t broke” crowd are working overtime to ensure it happens as slowly as possible.

There I go .. talkin’ up the grapes again!