NCPA - National Center for Policy Analysis

Free the Grapes

March 2, 2004

Small wineries have popped up in all 50 states, but consumers cannot always find these lesser known brands in retail stores; therefore, they turn to direct purchases from wineries, usually via the Internet. In the past, laws have prevented consumers from purchasing wines directly from out-of-state wineries, but these are being legally challenged, and, in some cases, abolished.

Liquor distributors, however, have lobbied to continue prohibitions on shipments from out-of-state wineries, claiming that wines not purchased from a retail outlet encourages underage drinking. But a recent report by the FTC concludes that such laws do not increase the incidence of underage drinking, and that states allowing direct-shipping usually have procedures in place for age verification at the time of delivery.

Moreover, states are recognizing the potential for revenue as many wineries offer to pay excise taxes in order to ship to another state:

  • Governor George Pataki is planning to allow New York consumers to purchase wines from other states, allowing consumers more choice and increasing state tax revenue.
  • North Carolina and Virginia are now allowing wineries from reciprocating states to ship to their states.
  • In Texas, officials are changing their laws on the heels of a court verdict.

Grassroots consumer organizations such as Free the Grapes have formed to fight wine-shipping laws, and more states will likely loosen their restrictions as such laws are challenged in court.

Source: Kenneth W. Starr, "Uncork the Law," Wall Street Journal, February 3, 2004.

 

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