Wine Regulation & Legislation: FTC sides with the Wine Industry
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As the weight of the FTC's position continues to settle, lawsuits have been filed challenging direct shipping bans in Ohio and New Jersey. As with several other states trying to preserve their direct shipping laws, Ohio and New Jersey allow in-state wine shipping but ban out-of-state shipments. However, adding a new layer of intrigue to the issue in New Jersey, plaintiffs |
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The North Carolina Legislature has passed a bill allowing wineries that have obtained a permit to ship up to two cases per month to residents in the state. The bill attempts to remedy a federal court ruling in April that suggested all direct shipments be banned. A 1981 law barred out-of-state wineries from shipping products to North Carolina residents while letting in-state wineries engage in the practice. The court called that unfair competition and said all direct shipping should be stopped, sending the Legislature into a frenzy to create this new law. |
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The Federal Trade Commission came down on the side of wineries and wine drinkers earlier this month when it issued a report opposing bans on direct shipment of wine to consumers.
“After extensive review, Commission staff concludes that states could significantly enhance consumer welfare by allowing the direct shipment of wine to consumers,” reads the report. “Through direct shipping, online wine sales offer consumers lower prices and greater selection.”
The staff review included a public workshop, held last October by the FTC, that drew players in several industries to examine state barriers to e-commerce for a number of popular consumer products, including wine.
WineAmerica president David Sloane heralded the report, predicting it “will forever change the terms of debate on the direct shipment issue and will have an extraordinary impact on state legislatures and the federal courts in the months ahead. “wine consumers and wineries all over America should know that their voices have finally been heard on this issue, and that the federal agency charged with safeguarding competition and protecting consumers has firmly come down on our side,” he adds.
Wine Institute president and CEO Bobby Koch was pleased that the FTC was able to see beyond concerns, largely voiced by wine wholesalers, that direct shipment of alcohol facilitates underage drinking. “These laws protect the wholesalers and harm consumer choice and hundreds of small wineries that are locked out of the distribution system,” he says. “Wholesalers have used the bogus underage-access argument to preserve the discriminatory status quo. We are pleased the FTC has debunked this false claim once and for all.”
Re-published from the North Bay Business Journal, © 2003 - July 29, 2003 |
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