Supreme Decision
By Howard G. GoldbergAs a longtime wine fan, consumer Scalia surely appreciates the pleasures of access to as many varieties of wine as possible. As a justice, he joined the 5-4 majority favoring interstate shipping, which broadens such access. The court ruled that New York and Michigan, which permitted in-state shipping by local wineries while blocking shipping into the state by outside wineries, must treat both sets of suppliers equally: everybody ships or nobody does.
Justice Anthony M. Kennedy's opinion, written for the majority, sympathizes with direct sales - which bypass wholesalers and retailers - but only when such interstate commerce is devoid of discriminatory practices, as the Commerce Clause of the Constitution intends. That clause, the Court decided, trumped the states' rights to regulate the sale and distribution of alcohol: authority granted by the 21st Amendment, which repealed the 1920 to 1933 folly called Prohibition.
Although the Supreme Court could have favored the distributors' personal economic interests and ruled out all shipping, it gave small winegrowers a big victory. The producers quickly acted to protect that victory against efforts by distributors and their retailer allies, who stand to lose outdated and fraying privileges, to nullify it or water it down in state legislatures.
If the spirit that animated Prohibition was Puritanism, which H. L. Mencken defined as "the haunting fear that somebody, somewhere, may be happy," you could call wholesalers' arguments defending the three-tier system transparent protectionism. But that post-Prohibition system - under which producers sell to wholesalers, who sell to retailers and restaurateurs, who sell to the public - wasn't delivered on Mount Sinai; it doesn't constitute an 11th commandment. The networks of licensed wine and liquor handlers weren't designed to become state-sanctioned monopolies. Their purpose was to keep organized crime from gaining control of distribution, to help states collect taxes and to prevent booze from reaching minors.
Don't misunderstand: wine middlemen - distributors, wholesalers - aren't villains. In our continent-spanning nation, they are indispensable. By providing sales, promotional, educational, storage and delivery services that many producers cannot afford, they bring to consumers' attention wines that might otherwise go undiscovered. The best middlemen - those who help ferret out and gamble on unappreciated producers - are welcome tastemakers.
Predictably, legislatures in some states directly affected by the Supreme Court's ruling - Florida, Indiana, Michigan, Rhode Island, Ohio, Massachusetts and Vermont - have spawned bills that don't wholly satisfy distributors or boutique wineries. Connecticut's legislature was the first to comply; its new law allows shipments of about two cases to consumers every 60 days. New York enacted a liberal law allowing every adult to buy up to 36 cases of wine every year directly from all outside wineries of their choice in states that allow direct shipments from New York producers.
Part-measures, as one trade association executive confided to me, can be better than none or regressive ones. "Next time around, we can get them amended," he said. "The important thing is to establish a new base."
A new base - in the coast-to-coast climate of thinking - has been laid by the Supreme Court. In essence, the majority, while upholding the three-tier system, said that wine was O.K. - and that there are alternative ways to purvey it. This proposition undermines the distributors' holy writ, which holds that wine must be dispensed exclusively by them, especially as the guardians of minors. Anybody drenched by the sexual innuendo in booze ads directed at youngsters might imagine that when distributors solemnly play the in loco parentis social-responsibility card, especially in court, they want us to believe in the Tooth Fairy, too.
The game was over for their protectionist spin in 2003 when the Federal Trade Commission reported that a study by its staff had concluded that "many states appear to have found means of satisfying their tax and other regulatory goals that are less restrictive than an outright ban. These states generally report few or no problems with shipments to minors." The study also determined that "through direct shipping, online wine sales offer consumers lower prices and greater selection" than those found in shops. And it said that "by banning interstate direct shipments, states seriously limit consumers' access to thousands of labels from smaller wineries."
If you visit the dreamy Finger Lakes region of New York, why shouldn't you be free to buy and receive at home Treleaven Chardonnay produced by Peter Saltonstall at the King Ferry Winery, which he and his wife, Tacie, own? If not the Internet, fax or phone, where can America's Saltonstalls find marketing substitutes now that the distribution industry's consolidations nationwide make it uneconomical for middlemen to carry small-scale winegrowers? "At least a third of the visitors to our winery are from out of state," Saltonstall has said. "For 15 years, I have been forced to turn down follow-up business from those customers simply because they live in another state. It's ridiculous."
Distributors' fears that their livelihoods will be threatened by an increase in direct sales by many of the 3,500 wineries in the 50 states seem unjustified. What's more likely is that thirsts and tastes whetted and shaped by hitherto unavailable wines will promote consumers' interest in wines sold by merchants and supermarkets around the corner. A rising tide lifts all boats (including distributors'), as economists say.
A stream of anecdotal evidence suggests that Americans' attitudes toward wine are becoming Europeanized - more relaxed and natural. A study sponsored by Vinexpo, the Bordeaux-based international trade fair organization, predicts that by 2008 the United States will become the world's No. 1 wine-drinking country, as measured by volume.
If such a profound cultural flood tide on wine is, indeed, underway, the reactionaries who try to dam it - among them anti-free-trade Michigan wholesalers who want all inside and outside shipments stopped - will be washed away by history, as were earlier extremists: the champions of total abstinence.
How do these wholesalers differ from the Olympia oysters that Justice Scalia scarfed down with white wine? That's easy. They are still closed, and have their heads in the sand.
Howard G. Goldberg, who contributes wine columns to The New York Times, is author of All About Wine Cellars, a paperback that is part of The Complete Wine Cellar System kit (Running Press).