Posts Filed Under wine shipping
As many of you already know, I am no friend of the Pennsylvania Liquor Control Board.
I suppose that is putting it a bit mildly, since I’ve likened their unconcstitutional state-run wine monopoly to Communism, publicly ridiculed the 40%+ premium that they add to state wine prices (while at the same time limiting selection, reducing service quality, and boating some of the worst storage conditions in the country), and accused them of engaging in fear-mongering and sycophantic lobbying to protect their monopoly position.
But who’s bitter? Me?!? I’m not bitter!!! Who you callin’ a PSYCHO!??!!!
Anyway, the good news is that I no longer have to utilize previous 1WineDude.com real estate to fight the good fight against the PLCB. I’ve found a blog dedicated to that purpose, and I’d argue that its author (Lew Bryson) does a better job of it than I’d ever do!
I give you noplcb.blogspot.com, a.k.a. “Why The PLCB Should Be Abolished“!
For PA wine lovers, this blog will be hilariously funny in the same “cuts-so-close to reality that it kinda makes you wanna cry” way that Dilbert is hilariously funny for cubicle workers…
While I will probably defer to Lew on all matters PLCB from now on, I should note that I’m not an advocate for abolishing the PLCB – or any state-run liqour monopoly, for that matter. I simply want those monopolies to adhere to the decisions of their state and federal constitutions, and to ammend existing laws to permit competition with those monopolies.
Let them have their fair shot in the real world, and not in the ‘fake’ marketplace set up under the protection of state governments. Personally, I don’t think their business plans stand a snowball’s chance in hell, but let’s leave that to the open market to decide – and not the lobbyists.
When you’re talking about a monopoly that brings billions of dollars to those states, it’s a Sisyphusian struggle to be sure, and I’m sure that some of my rants about this topic sound downright naive.
But… the way that these state wine monopolies run is appalling; the message it sends is that the government will protect businesses from having to adhere to the Constitution, so long as those businesses make enough revenue for the state.
And that’s just not the kind of world in which I want my daughter to grow up.
Forbes.com ran an interesting (and sobering) article this week about the future of small to medium wineries in the U.S. (primarily CA, WA, & OR).
What this article says is that, due to the proliferation of wineries, wine brands, and distributors (5000+, 7000+, and 450+ respectively – in the U.S. alone), consolidation is inevitable. Throw in the escalating fight for retail shelf space (usually won by the largest players with the most retail muscle) and skyrocketing land value prices in those aforementioned states, and you have an industry almost ripe for the picking. According to the Forbes.com article, a recent study by Silicon Valley Bank estimates that over 1000 of wineries in those states may change ownership in the next 10 years.
This is not just a situation impacting the U.S. Global competition is creating large wine brand conglomerates with global reach. And rising land prices are certainly not unique to U.S. wine properties – just check out Noble Rot to see what land value and inheritance taxes are doing to the Bordeaux wine area prices, which eventually are driving smaller players out of the market (and ins some cases, out of their family properties) entirely.
With all of this going on, you’d think that Internet wine sales might help to level the playing field for these smaller players.
And you’d be wrong. Way wrong…
Why? Because antiquated wine shipping and alcohol sales laws, as well as unfair state licensing fees effectively prevent many smaller wineries from selling their products online.
Those wineries that do brave the insanity of interstate sales have a heady task in front of them – according to the Forbes.com article:
“A winery shipping a single case to each state that allows direct sales (there are now 37) would have to submit 725 forms to conform with sales, excise and state income taxes.“
That’s not a joke.
This totally sucks, on two counts.
- Wineries with amazing products can’t get those products to people who want to buy them – resulting in lost sales, and, as mentioned in the Forbes.com article “family-owned microbrands have seen their pricing power and ability to demand shelf space trickle away.” This is Bad for the U.S.’s ailing economy.
- The average wine consumer also gets screwed in the process – fewer players controlling the wine brands available to you, and fewer ways for you to get those wine brands. So you can’t spend your money even if you wanted to – also Bad for the ailing economy.
I’ve contacted the campaign centers for the presumptive 2008 U.S. Presidential nominees, Senators Obama and McCain, to find out where they stand on the issue of interstate commerce and wine sales.
So far, I’ve received nothing but canned responses… but I’ll keep trying in the hopes that they answer, because for a geek like me this issue is part of the larger problem of archaic bureaucracy negatively impacting the economics of U.S. citizens. Watch this space…
(images: autocrisis.com, ecu.edu)
I know what you’re thinking, after reading the title of this post.
“Is the Dude about to go on yet another tirade about the PLCB? Okay, okay, they suck – we get it already…”
Well… the answer is “Yes.” Sort of. I’m about to go on a bit of a tirade about the wine shipping laws not just of Pennsylvania, but also of WA, ID, AZ, CO, KS, MN, IA, WI, MI, IN, KY, GA, FL, SC, NC, NY, VT, CT, RI, and IL (pending review of currently proposed legislation).
The state of affairs of wine shipping laws in those states is almost hopelessly broken. Notice I say “almost hopelessly.” That’s because I’ve thought of a way to fix it. Let’s break it down…
I say broken because those states have laws on the books that restrict the free trade of inter-state wine sales – a practice deemed unconstitutional at the federal (and for some also at the state) level. For the most part, these states are trying to protect state-run monopoly businesses that would be handed their own jock straps in the free market if, say, a big buyer like Costco were permitted to sell and ship wines directly to consumers in those states. The state run operations add extra cost while limiting value and selection – because they are monopolies, they don’t need to compete on the basis of price or service. If individual consumer rights, or the best interests of local state wineries get in the way of their monopoly profits, those citizens are simply disregarded – even if the states’ supreme courts have ruled against those practices. So, they make billions, pay big bucks to lobbyists to protect their position, and the state governments (for the most part) turn a blind eye to it all (probably because of the huge windfall).
How to fix this mess? Simple. Here’s a 2-step process of playing politics that could turn the tide. The thing to keep in mind is that politics is almost always a numbers game. And it almost always involves you (the people getting screwed) getting off your keesters and getting active.
- Stop buying wine from the state. I mean it. Don’t buy wine from your state-run liquor store. What will this do? It will reduce the windfall (remember the part about this being a numbers game?). No profits, no windfall. No windfall, no paying lobbyists to turn the tide of free trade legislation. No lobbyists, no deceit-filled battles to block the spread of capitalism to the wine shipping business.
Disclaimer: I’m not advocating you breaking the law – and to be honest, your state’s liquor laws are so convoluted you probably violated them already if you took any cough medicine this year. Anyway, I don’t care where you get your wine, as long as it’s not from a state-run monopoly. If you are lucky enough to live near a bordering state that does sell wine through the free market economy… well, I’m just saying that you might have alternatives.
- Write your state legislators. This is still a numbers game, because far fewer people actually do this than you’d think. So, if you flood your state legislators with correspondence, eventually they will question whether the tide needs to turn against the monopolies. Especially if you followed step 1 (politicians likely won’t stand by a sinking ship that is losing money) and indicate in your correspondence that you’re a voter in good standing and any re-election bid support on your part will hinge on their demonstrated support of free trade.Fortunately, writing your state legislators is very easy. Head on over to FreeTheGrapes.org – they will find your legislators e-mail addresses for you, and give you a handy form-letter to send them (don’t forget to add the re-election support part – politicians usually don’t like losing their jobs).
Maybe this sounds unreasonable, overly-simplistic and ridiculous to you.
But ask yourself this:
Is it any more ridiculous than a business with cripplingly poor business models, that can’t compete on the basis of service, selection, and price, making in excess of $1.5 billion dollars a year by hiding behind antiquated laws and charging you artificially high prices?
What if your state controlled your cell phone service that way? Or forced you to buy milk only from the state, even though it was stored improperly and cost 35% more than what your cousin, who lives in the next state over, pays for his family’s milk (which he can buy from wherever he feels offers the best milk at the lowest price)? Or limited your selection of underwear to a handful of brands and sizes?
Or treated women’s designer shoes the same way? (scary… that one might have the potential to drive some women I know to kill)…
Sure, there’s a big difference between “essential” goods like bread and luxury goods like designer fashions. But before you write off wine as an item that is fair play for regulation by the “pleasure police” (Robert Parker‘s term for the alcohol regulators in his home state of MD), don’t forget that two of our founding fathers (the two widely regarded to have had the most raw intellectual horsepower, by the way) – Jefferson and Franklin – viewed wine as an essential life good, equal to water and bread in terms of necessity.
So… who’s being unreasonable?
(images: blog.whathappensnow.com, wine.appellationamerica.com, ronalfy.com)