This week, an update on the news that Amazon, the world’s largest Internet retailer, wants to get back in the wine business:
• Solving the compliance problem: Lew Perdue at Wine Industry Insight, who broke the story last week, follows up with details on how Amazon will help wineries follow the various and byzantine state direct shipping laws. Because, in order to make this work, Amazon won’t ship any wine, but will leave that – and compliance -- to the wineries. All it will do? List the wine on its website, just like any other third-party reseller. Perdue also reports that only 12 states will be part of the program; again, this makes me wonder why Amazon is bothering, since 12 isn’t a whole lot and probably won’t include New York and Pennsylvania, which are notorious for their liquor laws.
• Get those lawsuits ready: I noted yesterday that Amazon’s plan could well provoke a legal shoot-em-up, given the regulatory climate in the U.S. What I overlooked is that the beer business, which hates direct shipping the way I hate the designated hitter, has very deep pockets. Case in point is a lawsuit in which two distributors are being sued by a beer manufacturer. I don’t completely understand what the suit is about, but what’s important to note is that the beer distributor trade group is supporting the distributors: “Beer distributors are dedicated to keeping alcohol out of the hands of minors and we oppose alcohol sales on the Internet.” Hope Amazon has lots of lawyers on retainer.
• What about the locals? Stephen Eliot at Connoisseur's Guide to California Wine asks: “[H]ow this [will] impact the independent, brick-and-mortar wine retailers. I have long believed that the classic wine retailer, is among the most important and underappreciated players in real wine education. …” A good question, but probably one that won’t make much difference in the short run. Assuming Amazon gets this to work, its scope will be limited and will only include California wineries (and a limited number at that). Plus, wine is different than music or books, which are mostly Internet-only products these days and put book and music stores out of business. Can’t have a digital bottle of wine.