So I was looking at some speakers Camp saw on Woot and I saw a section of Woot that was solely dedicated to wine. “Awesome!!” I thought as I began to peruse through the wines and found myself a nice Iron Horse Cabernet. I scroll to the bottom hoping to find some shipping info and pricing but instead found a list of states that were approved to have wine delivered to them.
Twenty years ago, only four states allowed for legal, regulated winery-to-consumer wine shipments. Now, 35 states allow such shipments from out of state wineries, although just 12 allow retailers to do the same. The U.S. Supreme Court, Federal Trade Commission, state alcohol regulators, and state legislators have joined consumers to help update archaic laws many of which are merely designed to entrench state-sanctioned monopolies in wine distribution.
Obviously the middle man is cut out when wine is shipped from the producer directly to the consumer. This middle man is the Wine and Spirits Wholesalers of America… and let’s just say they’re not too keen on being able to be cut out.
In 2008, less than 5% of wine production is likely to be shipped directly to consumers. In 1999, state wholesalers in Texas aggressively supported a bill that carried the same penalty for shipping a bottle of wine illegally to a Texas adult consumer as the penalty for assault with a deadly weapon. Fortunately, the bill was not signed into law by then Governor George W. Bush. And more recently Florida’s key wholesalers have virtually eliminated competition by setting legal requirements which prevent the formation of new, small distributorships: Maintain minimum $100,000 in inventory and actively service 25% of all accounts in their county – that is, staffed to sell to convenience stores – even though fine wine specialists account for just 5-10% of all accounts.
This is an archaic system that still has a grip on America due to greedy companies in a time where information is rampant and business over the internet is becoming more and more common place. I’m blown away by it to be honest… I had no idea there was such a cartel in the wine distribution industry.