Raise a glass!

Yesterday's Supreme Court ruling in the wine shipment cases was good news, at least in the limited context that the Court didn't uphold the status quo of different treatment for in-state and out-of-state wineries. But it wasn't great news.

Contrary to some of the reports I heard yesterday, the ruling does not create an unfettered right to order wine on the internet or for wineries to ship wine anywhere in the country. It only requires that a state have consistent regulation for all wineries, whether in-state or out-of-state. Those states that already have a consistent set of rules - like Maryland, which prohibits all direct shipments to consumers - won't be affected, and states with inconsistent rules only need to make them consistent. Thus, in Michigan, one of the states that lost in yesterday's ruling, the state's alcohol regulatory commission wants the legislature to change the law and prohibit all sales that aren't face-to-face at retailers. (In Michigan, then, yesterday's ruling was good news only in the short run, with the potential for being bad news in the long run.)

And the ruling is not going to do away with the "crazy quilt" of state regulation, as other reports indicated. A winery will still need to know all 50 states' shipping regulations in order to avoid sending their wines into states where such shipments are illegal, the same as today: An Oregon winery would need to know that it could ship direct to the consumer in North Carolina with no problem, that it is commmitting a felony if it ships direct to a consumer in Maryland, and that it needs to have a $65 annual license to ship direct to a consumer in Virginia. Still sounds like a crazy quilt to me.

Ultimately, though, I'm not sure it will make all that much difference, at least here in Virginia. Under the regulations in effect before yesterday's ruling, if you wanted to have a winery ship a bottle or a case direct to you, you already could - provided the winery had that $65 license for direct shipment. (And as a rule of thumb, a winery probably needs to sell 2 or 3 cases a year in Virginia to break even on that license fee.) So, if you wanted a bottle of the 2003 Cakebread Rubaiyat, which I've never seen available in a wine shop in Virginia, you were already permitted to do so. If you wanted a bottle of Zinfandel from the Hart Winery, you'd be out of luck.

I'm not sure that yesterday's ruling will change that situation much: Arguably, all wineries need some sort of license to ship within Virginia - the out-of-state ones need the $65 license, and the in-state wineries need their annual winery license (at a substantially higher fee). At most, Virginia might change to require an additional shipment license for all in-state wineries wanting to ship direct to a consumer. The end result would be the same, though: a winery without a shipping license won't be able to ship to a Virginia consumer.

Further, it probably won't make that much difference for the individual consumer. The cost of shipping a single bottle or case will add significantly to the price of the wine; enough so that you probably won't want to order direct from the winery all that often, and only for more expensive wines. You wouldn't buy a $10 California chardonnay and have it sent to you for an additional $8 or $10 very often when you could get a better one for $15 at your local wine shop.

It may make a bit more of a difference for the small or medium-sized winery, to be able to sell wine to an out-of-state customer who tasted it at the winery on a trip last year and now wants more. Probably not a lot of difference, at least to a winery that now sells out of its vintages at the winery, which will now sell a slightly larger portion through out-of-state shipments instead of immediate, face-to-face sales.