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Bad News for Wine Collectors as Delivery Companies Crack Down

Bad news for wine investors and collectors across the United States: UPS and FedEx are cracking down on the interstate shipment of wine, restricting the number of states in which many purveyors of hard-to-find, limited-production wines can do business. This crackdown is not the result of a new law, but rather longstanding laws in several states that are unfriendly to the shipment of wine (in the wake of Prohibition, each individual state was given enormous control over the distribution and sale of alcohol within its borders, creating a jumble of conflicting regulations that hinder the free trade of wine from state to state). In recent months, private couriers have taken over the enforcement of these laws from state agencies, leading to millions of dollars in lost revenue and limited options for consumers.

The argument against shipping wine across state borders offered by many lawmakers is lost tax revenue in the home state of the consumer, but it stands to reason that consumers will always buy locally if they can in order to avoid shipping charges (a bottle of wine is fragile, heavy, and sensitive to weather conditions, so the cost of shipping is often high). In our experience, a majority of consumers only look to out-of-state retailers when they are seeking small production wines that sell out immediately, or back-vintage wines that they can’t find at their local shop.

In reality, much of the blame for these restrictive state laws lies on the lobbying efforts of organizations like the Wine & Spirits Wholesalers of America (WSWA), which have a vested interest in preventing interstate sales. Under the three tier system, wineries cannot sell directly to retailers or consumers, but instead must sell their products to wholesale distributors who will mark them up by 25% or more and resell them to retail stores and restaurants. In this sense, distributors act as middlemen for all wine entering a state, increasing prices for consumers and limiting the number of choices available in the marketplace. At Estate Wine Brokers, we are working to increase the number of states we can service, but as a consumer, you can make your voice heard by visiting FreetheGrapes.org, an advocacy site with fill-in forms that allow people to easily send letters to their legislators.