Direct shipping has consequences for retail tier
Pub Date: 1/1/2003
The issue of shipping wine directly from vintners to consumers and retailers is important to members of ABL, and the licensed retail community in general. Here's why:
¢ Because alcohol beverage is a special commodity that needs to be regulated in ways distinctly different from other commerce. It must be kept out of the hands of the under-aged and face-to-face retailing is the best way to accomplish that.
¢ Because the controversy over wine shipping is in reality about shipping all varieties of beverage alcohol, and that means spirits and beer, too.
¢ Because if you allow manufacturers to sell directly to consumers, you allow them to function as retailers, a practice that was tried before Prohibition and was found to be fraught with peril. How about we stop in at the Jim Beam (owned and operated) Bar on the way home after work?
¢ Because direct shipping can bypass the state regulatory apparatus including the wholesale tier, which weakens the concept as well as the legal underpinnings of a three-tier system of state regulated and taxed production, distribution and retailing of adult beverages. This erosion of state authority and control weakens the justification for a wholesale tier which in turns weakens the justification for state regulations which call for restricting and regulating the number of retail outlets. Cheap and plentiful retail liquor licenses for everyone?
¢ Because retailers ought to support and protect the 21st Amendment to the Constitution which grants states the power to regulate beverage alcohol. Certainly few would argue federal regulation would be superior. Nor would many desire their businesses operate totally under the vagaries of city or county government.
¢ Because the fundamentals of the status quo have lent a functional stability to an industry that badly needs it. The relentless changes of recent decades have not been kind to the industry, especially retailers. Fewer disruptions are better than more.
¢ Because when it is deemed acceptable for producers to bypass wholesalers, it becomes easier to accept that they ought to be able to bypass retailers, too.
¢ Because the mega-retailers want to be able to purchase vast volumes directly from producers at substantial volume discounts which will at least initially allow them to sell at lower prices, driving small retailers out of business. It is a tiny leap from allowing direct sales to consumers to allowing direct sales to retailers with no price controls.
¢ Because eliminating wholesale businesses would wreak economic carnage that would destroy a lot of good business investments and a lot of good jobs.
¢ Because states will find it increasingly difficult to regulate and properly tax production, distribution, sales and consumption of alcohol beverages, let alone to even know who is producing and shipping and selling, and how much.
As an aside, we wonder why the neo-prohibitionist organizations are so silent on an issue that goes to the heart of alcohol availability, access and regulation.