The 6 Key Rights Wine Consumers Demand

Posted by Tom Wark on Aug 7, 2013

The report issued today by the American Wine Consumer Coalition outlined which states best serve and least serve their wine consumers. “Consuming Concerns: The 2013 State-By-State Report Card on Consumer Access to Wine” graded all the states and DC on the degree to which they have enacted laws and regulations that support the interests of wine consumers.

Key to this important report are the 6 pillars of wine consumers’ interests in today’s economy that the report looked at. Why are these pillars of wine consumer interests important? Here’s why:

WINERY-TO-CONSUMER SHIPPING
Without the legal means to purchase and have wine shipped directly from the winery, consumers simply don’t have access to anything other than a tiny portion of the wines produced in the United States. Most states mandate that all wines arriving in a state from a winery or importer must be brought in only by a state-licensed middleman wholesaler and that a state’s wine stores and grocery stores only purchase their wine inventory from these same wholesalers. However, there are no requirements that these wholesalers represent any winery that desires to see its wines sold in the state. As a result, a state’s retail wine shops have access to only a tiny percentage of the wines available from the 7,000+ wineries in the United States since wholesalers tend only to represent a very small number of wine brands. By allowing consumers to purchase and have shipped directly to them wines from in-state and out-of-state wineries, the state provides wine consumers with access to nearly any domestic wine they desire. Without this privilege, wine consumers are stuck purchasing what wholesalers bring into the state and see their selection severely diminished.

RETAILER-TO-CONSUMER SHIPPING
Imported wines (French, German, Italian, Australian, etc) are only sold by retailers. As a result, consumers can only obtain imported wines from wine stores in the United States. Yet, in most states, wine retailers are restricted to only purchasing their wines from in-state wholesalers. If those wholesalers do not represent an imported wine brand, then retailers and their consumers may not purchase them. However, the imported wine a consumer might want is highly likely to be available from one or more retailers in other states. It’s for this reason that allowing direct to consumer shipment from out-of-state retailers to consumers is critical to consumer access to wine. Additionally, only a few retailers nationwide specialize in rare and hard-to-find wines, making it doubly important to wine lovers that they have access to the out-of-state wine retail marketplace.

GROCERY STORE WINE SALES
A number of states still prohibit the sale of wine in grocery and food stores where consumers purchase food. This type of restriction, kept in place primarily to protect liquor stores and wine retail stores from competition, represent considerable inconvenience for consumers who, if they want to purchase a bottle of wine to go with the meal they are preparing, must make another stop, wasting time, energy, and fuel.

SUNDAY SALES OF WINE
Though rarer than it once was, a selection of states and localities still impose prohibitions on purchasing wine and other forms of alcohol on Sunday. This kind of “Blue Law” serves no legitimate purpose other than local tradition, imposing personal religious values on an entire community. It is an arbitrarily imposed inconvenience to which wine consumers ought not be subjected.

BRING-YOUR-OWN-BOTTLE LAWS
Many states still make it illegal for a wine lover to bring a bottle from their own collection into a restaurant to enjoy with their meal. While a number of states serve their consumers well by allowing this practice and allowing restaurants to charge a “corkage fee” to patrons with their own wine, too many states still allow restrictions without any reasonable justification.

STATE MONOPOLY ON WINE SALES
Two states still take responsibility for being the retailer of wine. By doing so they deprive wine consumers of the benefits of a free market in wine sales that not only tends to reduce the price of wine, but also results in far greater selection and choice for the consumer.

Tom Wark is a member of the Board of Directors of the American Wine Consumer Coalition

Posted In: American Wine Consumer Coalition, Wine Consumers

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17 Responses

Ron Marsilio - August 9, 2013

Great blog Tom. Being under the employ of the Liquor system in a control State, I would rather not comment on the price and availibility of products under a free market as opposed to a monopoly. The politics are too super charged right now. That being said, I would like to comment on the first two sections of your blog concerning shipments. All States enact tax laws to pay for their overall budget, however, certain aspects of that budget have to be financed by what is known as “sin taxes”, taxes on cigarettes, alcohol and gambling. Obviously if people buy a large portion of their alcoholic beverages and cigarettes from out of state sources, the Treasuries lose a big chunk of income that is earmarked for those aspects of the state”s budget that must be paid for with these taxes. Now it can be said that state budgets can be restructured so “sin taxes” would be not be needed, but in some cases that may take legislative approval or even changes to the state’s constitution. Besides, how many goods that you consume or use in your everyday life come directly from the producer? Nearly everything we buy, we get through a distributor, so it is not unusual to see distributors operating exclusively in the wine world either. I think at last count, there are something like 12 or 13 States that do not allow direct shipments of alcoholic beverages. One can only hope that in a closed State, the distributor driven selection is adequate enough to satisfy the most discerning needs of consumers.
Tom Wark - August 9, 2013

Ron,

Thanks for commenting. In nearly every state that allows out of state wineries or out of state retailers to ship in, there is a necessity of getting a permit from the state (with a Fee) as well as that the winery or retailer remit taxes. The wineries and retailers have no problem with paying the taxes and they do pay them
William Langley - August 9, 2013

As an employee of a winery, my response to Ron is the same basic response from the U.S. Supreme Court. Legacy prohibition laws pure and simply violate interstate trade as defined by the constitution. The fact that my employer can’t even ship olive oil, much less wine, to some states would be ridiculous if it weren’t comical. This isn’t about state treasuries, we’re happy to pay any sales tax, sin or otherwise. This is about the consumers right to purchase goods across state lines.

Ron Marsilio - August 10, 2013

Pennsylvania, a closed State, does, in fact, have a program to allow direct shipments from wineries, if, as Tom states, they register to pay the taxes. The program, either due to lack of knowledge of its existence, or due to costs, is not utilized to its fullest extent. I do agree that direct shipments to consumers from the wineries is the way to go for wine collectors, however, there is a lot to be said for distributors and their ability to get the wines out there for all to see and experience on a large scale.

Again, William, the Supreme Court ruling only said that States had to treat out of State wineries the same as in State wineries. So, in essence, if in State wineries could not direct ship, the same would be enforced with those that were shipping across State Lines. In the ruling it was also stated that alcoholic beverages cannot be treated the same as regular products due to the rulings of the 18th and 21st amendments to the Constitution which places alcoholic beverages in a special category.

William Langley - August 10, 2013

Ron, I understand the technicalities of why things are the way they are. Prohibition was a result of overwhelming alcohol abuse nationwide. Laws were instated to protect that from happening again. However, that was long ago and what remains has more to do with money and politics than sensible consumption. Any study on alcoholism shows no correlation between wet and dry states. We’re simply trying to ship the consumer what they want. In our case, we can’t ship direct to PA because are so-called “allotment” is taken up through distribution – even though that is less than a third of our wine portfolio. I usually see 1 or 2 PA residents a day. I wish you could see their faces when I tell them I can’t ship wine to them while the NY resident standing nearby joins a wine club. It practically borders on a violation of human rights. It certainly violates any notion of consumer rights.

Ron Marsilio - August 13, 2013

One more comment to Bill and then I am done with this. The response of the Supreme Court in reinstating alcohol sales still stands. If there was rampant alcohol abuse then it is even more true now. You are telling me that the abuse of alcoholic beverages has gone away because now we are all grown up or something then your head is in the sand. The laws that were instituted to prevent rampant alcohol abuse, in most cases, involve accessibility. Now I am not a prude who says no one should drink, but there has been more illnessess, death, broken families and just general mayhem due to the abuse of alcohol that any other substance known to man. With that you are going to find control measures, as there should be. We are not all responsible adults unfortunately.

The other point I want to make Bill is this, I’m not sure what winery you are employed by, but they have the option of contacting our buyer for North America and submitting samples of their products that they would like to sell in Pa. and if the price is right and there is a place for the product, Pa. will buy the product directly in the absence of a distributor. If you have a distributor in Pa. then they should contact the buyer about purchasing your employer’s product. If you think the only means of getting the product to the consumer is through direct sales, you are mistaken. Most times the product is cheaper if it is bought through a distributor anyway. Who is going to get a better price, someone who buys 1,000 cases or a consumer who buys 1?

Tom Wark - August 13, 2013

But Ron….

Given all that you just wrote, what could possibly be the rationale for not allowing a winery or a retailer to also access PA consumers via direct shipment. There’s zero indication that direct shipment has any impact on alcohol abuse and such shipments are easily tracked. The fact that the state or a distributor can bring in a wine to the state (at a price 50% less than what the winery would get via direct shipment) is no argument for not allowing wineries or retailers to sell directly to consumers.

Ron Marsilio - August 13, 2013

To be perfectly honest with you Tom, there really is no rational reason, and that is why the PA legistature is working hard to change the direct shipment laws, but there are politics involved. The Republicans want a complete abandonment of the current system with the direct shipment legislation, while the Democrats want to reform and renew the control system with direct shipment legistation. However, to view the AWCC’s State consumer ratings based on control is totally unfair. I believe 1,000 people were polled. How many of those 1,000 shop in PA? Do they know what products are available here and at what price? Do they know the level of training that our staff goes through? I have access to privately owned wine and spirits stores in non-control States and I see no “parting of the waves” in reaching the retail promised land. Prices are not significantly different. In some cases PA is higher and in others we are lower. Some of the bigger stores in more upscale demographic areas have upwards of 4,000 SKU’s. There are highly trained Retail Wine Specialists in every wine oriented store and all stores are clean, well-organized and under the process of “re-branding” as we speak. We work hard to present a pleasant, well-stocked and highly competetive retail enviornment throughout the State. If the product you are looking for is not in your local store, we have the mechanisms in place to get that product to you from the store where it is located whether it is 2 miles away, or on the other side of the State. We do this and control who’s hands the alcoholic beverage goes into better than any grocery store can. What is so great about buying a mass produced bottle of wine in a grocery store anyway? Is there someone there that can help you better than a Pa Wine and Spirits Shop? We, as a society, are getting too lazy. We need one-stop shopping for everything and if we cannot find a parking place right next to the handicapped spots at the big box stores, we will drive around for 20 minutes until we find one. The big box stores have already handicapped Main Street America and now we want to put it in the grave. What a shame!

Tom Wark - August 13, 2013

Ron,

The degree to which the PA stores do a good job really isn’t the point. The fact is that the number of wines PA residents have access to amounts to a tiny minority of wines available in the American marketplace and PA law bans PA residents from accessing anything but what the buyers at the state stores decide they ought to be able to buy.

Further, there are grocery and food stores across the country that sell wine that have outstanding selections of wines, so it does no good to diss the selection of wines in grocery and food stores.

As far as politics go, the real politics in PA have to do with privatization. The issue of direct shipment of wine is really supported in a bi-partisan fashion.

Ron Marsilio - August 13, 2013

True, direct shipment is supported in a bipartisan fashion, but each side wants direct shipments attached to a privatization or control bill. Again, we are only 1 of many States that do not allow direct shipments, even though PA has a mechanism in place for wineries to register to pay the taxes and direct ship to consumers. The point is, that if PA became an open State, it still would not get an A, a B, or even a C in this bogus poll because of its “control” status. I say let those who are taking the poll visit PA and shop in our stores and take advantage of what we have to offer, and then make a decision on what grade to give. Also, we do not only offer our consumers what the buyers select, we also have an SLO (Special Liquor Order) program to give consumers access to products that are not stocked in the stores but are still brought into the State through distributors. The only thing PA residents cannot do on a regular basis is order directly from some wineries. Those wineries that wish to get their products into PA have the avenues to make that happen. You know as well as I do that the wineries without good distributors do not have access to all consumers and the same is true for producers of any other products.

Tom Wark - August 13, 2013

Ron:

First, the Report looks at how state laws impact consumers. The survey of 1000 wine drinkers was done in advance of the report to determine what rights wine drinkers found most important.

With that, let me put it this way:

Would PA wine consumers be better off if they could buy wine in grocery stores? YES

Would PA wine consumers be better off if they bought wine in a free market where various business competed to provide them with choices in wine? YES

Would PA wine consumers be better off if they had the option of buying direct from wineries, rather than just was was brought in by the state or distributors? YES

Would PA wine consumers be better off if they had the option of buying direct from out of state wine stores rather than just what the state and distributor brought in to the state? YES

Finally, consider that many wineries do not want to have access to “all consumers” by virtue of being on store shelves. Many merely want to have access to those consumers they can sell direct to for a number of reason. They may want to cultivate their club membership. They may want to interact only with those that have experienced the winery in person. They may want to market only to those that are willing to spend $75+ on a bottle of wine. They may want to market to PA consumers without having to relinquish 50% of their retail price by selling to a distributor first.

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