15 years since Granholm, and how much hasn’t changed in the three-tier system

GranholmThe Supreme Court’s Granholm decision was supposed to make it possible for us to buy wine from out-of-state retailers and on-line. So why didn’t it?

This is the first of two parts looking at how the century-old three-tier system still prevents us from buying wine on-line or from out-of-state retailers. Today, part I: The Supreme Court’s 2005 Granholm decision, and why it didn’t change three-tier as much as everyone hoped. Friday, part II: Dear Supreme Court: Please fix three-tier.

Fifteen years ago this spring, the Supreme Court made it possible to buy wine from an out-of-state winery in its Granholm decision. The court ruled that states had to treat wineries in- and out-of-state the same way. So, if residents could buy directly from an in-state producer, then they had to be allowed to buy wine from an out-of-state producer as well. This opened the direct-to-consumer wine market, which is worth about $3 billion today

Many smart people also thought Granholm would open the retail wine market, so that consumers could buy wine over the Internet and from companies like Amazon. But that never happened (save for the rare exception like Wine.com), and I explain why in a freelance piece I wrote for Meininger’s Wine Business International.

And why didn’t Granholm do that? Because state lawmakers, regulators, and the courts still go by what’s called the “public health and safety” standard that was set up by the political compromise that ended Prohibition and gave us three-tier. The doctrine says that if a liquor regulation protects the public health and safety, then it’s constitutional. And each group – and particularly the courts in almost every decision since Granholm – still insists it isn’t safe for wine drinkers in one state to buy wine from a retailer in another state. So it remains illegal.

Yes, this is silly and outdated in the second decade of the 21st century – but that’s three-tier for you.

More about three-tier, Granholm, and direct shipping
Tennessee residency law: Did the three-tier system come crashing down yesterday?
Is the coronavirus pandemic the beginning of changes to the three-tier system?
Direct shipping loses a big one

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