Tag Archives: direct shipping

Winebits 222: Robert Parker, direct shipping, regional wine

? The maestro speaks: The Winestream Media has been abuzz with Robert Parker stories, as he makes the rounds of the various big-time wine events this spring. The most important person in the wine business has hinted at retirement, has pronounced the 2009 Bordeaux vintage the greatest ever (the third or fourth time he has singled out a vintage this century), and discussed the various scandals and upsets that have recently plagued his empire. There are an almost infinite number of links and stories, and someone could probably do quite well publishing a blog devoted to nothing other than Parker news, in the same way tech blogs focus on Apple and Microsoft). The best summaries I've found are at Wine Industry Insight (scroll down to the Parker section) and at The Blend Blog.

? Burying the direct shipping bill: HR 1161, the successor to HR 5034, is officially dead. How do we know this? The distributors who were paying to push the bill through Congress have said so. Reports Shanken News Daily: " '[It] is officially off the table,' says Republic National Distributing Co. president Tom Cole, who attended the joint meeting and adds that suppliers and distributors are now working together more closely than any time in the past few decades to resolve their differences.' " Background is here; the bill, in its various incarnations, was an attempt by distributors to keep Congress from interfering in their constituionally-protected monopoly to sell wine through the three-tier system. Some in Congress wanted to give retailers the ability to buy direct from producers, or to allow consumers to buy direct from out-of-state retailers. Both are mostly prohibited by three-tier. I have no idea what the rapprochement between the producers and distributors means or what brought it about. Though that statement does sound ominous, doesn't it?

? Berger on local wine: None other than Dan Berger, one of the top wine writers in the world, has lent his imprimatur to regional wine. "Fifty years ago, if you tasted a wine from Missouri, Michigan, Minnesota, or New York, chances are you'd be lucky if it was even drinkable. … A lot has changed since then." Among Berger's top states: Texas, Virginia, Missouri and Colorado, where we have held one of our annual DrinkLocalWine conferences or will hold one — Colorado, April 28.

The Supreme Court and retail direct shipping

The U.S. Supreme Court this week declined to hear an appeal of a Texas case, Wine Country Gift Baskets.com v. Steen. In doing so, it decided that the direct shipping law as it stands, which makes it all but impossible for a retailer to sell wine to someone in another state, is perfectly fine.

Tom Johnson at Louisville Juice sums up the development nicely:

The Fifth Circuit Court of Appeals had previously ruled that the 21st Amendment gave states the power to require retailers to operate from within a state; the Gift Basket folk argued that retailers should be treated similarly under a state ?s laws regardless of where they are located.

The Supremes declined to intervene, so the case law on this tiny gray area is now clear. The world will continue to operate as it has been operating since the repeal of Prohibition.

Unless something truly untoward happens, this non-decision will almost certainly end any hopes that someone will do for wine what Amazon.com did for books and music. In fact, the legal tangle is so dense and so complicated that Amazon gave up trying to become a national, direct-to-consumer wine retailer about 18 months ago.

That’s because, under the existing law, each state can regulate out-of-state retailers anyway it wants; a retailer would have to adhere to one set of laws in Utah, another set of laws in New York, another in Pennsylvania, and so on. Which, as Amazon discovered, is impossible.

That’s why, since the advent of the Internet, no one has really succeeded in selling wine on-line. Virtual Vineyard failed. WineShopper.com (which Amazon invested in) failed. The first version of Wine.com failed. Even the current version of Wine.com has limited reach, with wine sales to just three dozen or so states.

Yes, consumers can still buy wine directly from the winery in some states, thanks to the Supreme Court’s 2005 decision in Granholm v. Heald. But Granholm, which many of us thought would pave the way for a company like Amazon to sell wine directly to consumers (what pricing! what selection!), was, apparently, an aberration. The Wine Curmudgeon was one of those people, and I have since been disabused of my optimism.

We are, as Tom noted, stuck in 1933, so we’d better learn to live with it.

Winebits 156: Direct shipping, expensive wine, 7-Eleven wine

? Retail shipping appeal: A group of American wine retailers is asking the Supreme Court to overturn a lower court decision that limited the ability of out-of-state retailers to sell wine over the Internet. The Specialty Wine Retailers Association wants the high court to decide if retailers enjoy the same protection the court gave to wineries in its landmark Granholm decision in 2005. The retailers are appealing Wine Country Gift Baskets v. Steen, in which the Fifth Circuit Court of Appeals said a non-Texas retailer could not sell wine in Texas.

? A $233,000 bottle of wine: From our friends at the Wine Spectator: A bottle of 1869 Ch teau Lafite, estimated to fetch $8,000 at auction, sold for $233,972 — making it the most expensive 750ml bottle of wine on the planet. The Spectator reports that an unnamed Asian bidder bought the bottle, and it's no wonder the bidder wanted to remain unnamed. That $233,972 would have bought 1,950 cases of $10 wine, or enough wine to last most of the rest of us about 150 years.

? New 7-Eleven wine: The convenience store chain, which sells the $4 Yosemite Road brand, is expanding its wine lineup. Look for Cherrywood Cellars, a private label wine that will sell for about $9 a bottle, and will come in three flavors — chardonnay, cabernet sauvignon and merlot. I wasn't overwhelmed by the Yosemite Road, but it was a huge success with consumers, selling out quickly.

HR 5034 and the new Congress

I'm still not convinced that HR 5034, the anti-direct shipping bill, has much of a future. But what future it does have became a little brighter after this week's election.

That's because the incoming House speaker, Republican John Boehner of Ohio, is a long-time pal of the distribution side of the business, and it's the distributors who are pushing 5034. Boehner — who prides himself on his pro-business philosophy — has taken their money and spoke at a 2006 beer wholesaler conference. Reported the wholesalers: "He sincerely thanked members of the beer industry for their longstanding commitment to the betterment of their communities." Interesting phrasing, isn't it?

Outgoing House speaker Nancy Pelosi of California, on the the other hand,  didn't like HR 5034, and had promised to block the bill from a House vote. So it's a lot more likely that HR 5034 gets a vote in the House next spring.

Having said that, there's no guarantee HR 5034 gets through the House, let alone the Senate. Or that it becomes law anytime soon.

More about HR 5034:
? HR 5034's day in Congress
? HR 5034 and Congress
? That noise you just heard was HR 5034 dying