Tag Archives: commerce

Why is wine.com nervous?

Well, it’s because the Supreme Court is hearing arguments in cases challenging bans on interstate, direct-to-consumer wine shipments in New York and Michigan. Both states allow in-state wineries to ship wine to adult buyers but keep out-of-state wineries from doing the same thing. The crux of the argument is whether the 21st Amendment permits discrimination against out-of-state wineries.

That’s Section 2 of the 21st Amendment, which states “The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.”. Section 1, for those who need a refresher, repealed the 18th Amendment.

So why would wine.com be worried? Because states could decide that order-by-internet wine sites would violate their rights to prohibit importation. Prohibitions, mind you, often set up under the guise of “protecting the children”, thinking these rules often prevent minors from drinking.

Aside from the fact that any child who really wants alcohol will get it, the morality argument here is a paper tiger. Money, almost always, will trump morality. Reports from the Court today seem to indicate that’s exactly what the justices are thinking:

The justices expressed reservations about the laws, adopted in 24 states, and the arguments by the states seeking to justify the bans as necessary to protect minors from alcohol and to be able to collect taxes on the sales.

The other 26 states allow direct sales. Some of the challenged laws ban direct shipments from out-of-state wineries through sales on the Internet or on the telephone, but allow direct sales by wineries within the state.

Wine.com shouldn’t worry too much. I think the rulings here will be fairly cut and dry (so to speak).