Perpetuating a Broken System

I have this discussion a few times each week and it always starts with the same question: “Can you ship wine to my state?” I can only hope the answer is yes, otherwise it is up to the customer to figure it out on their own.

One does not simply ship wine directlyThe fact that many, if not all, states within the US of A are governed by post-prohibition era laws regarding shipments of alcohol is beyond me. How the myriad of permits and registrations aren’t seen as an interference of interstate commerce I will never know. The only thing that many of these laws and regulations do is perpetuate a system that is truly broken.

The 3-tier system in the alcohol world works like this: A wine producer ships to a distributor who then ships to wholesale accounts (retail shops and restaurants). In many cases it is necessary because someone like me who has a very small production and a day job can’t jump from state to state promote my wine. It helps to have boots on the ground that are familiar with the area and has a better local contact list than I will ever have.

I had a conversation with a gal from Pennsylvania about a week and a half ago who lived in the Bay Area for some time. She, and her husband, are big wine fans which is why they try to make it out to California at least a couple times of year. One of their biggest pet peeves about moving back east, specifically PA, is the lack of options when it comes to wine and the prices for the wines they don’t necessarily want. I pick PA out of the crowd because a good insider’s source is the 1 Wine Dude1 who has dealt with the peril of Pennsylvania wine shopping/shipping on the regular.

That one state however is literally the tip of the iceberg. In 2013 the American Wine Coalition published a report on the status of wine access in all 50 states2. Each state was given a grade based on a number of criteria that related to access to wine. In short an A+ meant that it was pretty easy for consumers to get access to the wines they want and an F meant the opposite. Out of the 50 states here is how many received each grade:

A+ to A- = 9

B+ to B- = 13

C+ to C- = 5

You can read the full report here: http://www.wineconsumers.org/wp-content/uploads/2013/08/ConsumingConcerns4small.pdf

The rest fell below a D+ which means that there are about 23 states that suck at letting their citizens enjoy the wines they like. (28 if you think a C is a shitty grade like I do). Now it has been a couple of years since the report concluded so I am sure these numbers have changed however it is still far too difficult for consumers to enjoy the wines they love.

The rational behind these laws and regulations is vast. Some states are wanting to protect local wine producers from being overrun by out of state producers. Some states want to make sure they they can have the ability to tax shipments of wine appropriately which can lead to issues that the state of Illinois and wineries around the US are experiencing3. Other states might have alcohol distributors so deeply ingrained in their political system via lobbies and donations that politicians end up keeping their iron fist clenched (largely because the distributors are scared that they are going to lose market share if direct shipping is allowed). These are just a few of the numerous excuses that are thrown in the direction of the general public.

The result is a rats nest of permits, fees, taxes and potential penalties that producers have to sift through. Luckily systems like Ship Compliant have come into existence to help us sort through the mess but having worked in shipping, compliance and dealing with these questions every day I cannot help but think:

“Wouldn’t it be great if we didn’t need a system like Ship Compliant?”

Having worked in shipping/compliance, and now starting to expand the reach of MTGA,  I can tell you it is an immense pain in the ass. So much so that when it was my day job I threw down an ultimatum to my boss at the time:

Find me a new position or I quit.

For the longest time I have viewed distributors as a necessary evil. This was largely because I have had nothing but bad experiences with them until the last 6 months or so. The state of wine sales through some distributors is horrible. They don’t respect the producers, much less know what they are selling in the first place. They are order takers, not sales people. I’ve been blessed thus far as I have grown with MTGA to work with a few great people who understand that it does come down to dollars and cents but more importantly there is a story to be told. They see the artistry and passion that goes into wine and they respect it. My wine isn’t just another line item in their book of offerings.

But that still leaves me hanging when it comes to direct shipping, especially this time of year as holiday gifts are flying from one coast to the other. For us small guys permits and licensing can add up to some hefty expenses, especially if you have just a couple of clients in one particular state. That is the reason why some wineries simply don’t ship to states that allow for direct shipping.  top gunI am not quite sure how some of these laws aren’t seen as interference of interstate commerce… but they aren’t. There are some wine producers out there that see these laws as that interference and as a result flip the proverbial bird to the permitting process but they are few and far between because the fines that can come as a result can cripple a business if it doesn’t shut it down first.

In theory when consumers are given more options the economy actually grows, as does tax revenue for the states that are worried about their bottom line. In fact business for distributors could have the opportunity to grow because they then have an influx of more producers who are looking to get into the state who don’t have boots on the ground. It has the potential to be the proverbial win-win situation.

For the time being stay tuned in to Free The Grapes, especially if your state is one of the holdouts when it comes to direct shipping. We, as an industry, will continue to try and get you the wine you want/need.

-Manderson

1 – Roberts, Joe. “I Hate The Pennsylvania Liquor Control Board.” 1 Wine Dude. N.p., 12 Mar. 2009. Web. 28 Nov. 2015.

2 – “Consumer Concerns.” AWCC. American Wine Consumer Coalition, 1 Aug. 2013. Web. 28 Nov. 2015.

3 – Romano, Aaron. “Wineries Fight Back Against Illinois Lawsuits.” Wine Spectator. Wine Spectator, 3 Aug. 2015. Web. 28 Nov. 2015.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s