Wine Retailers’ Agenda for the 21st Century
Publish in the June 2017 Beverage Media journal's "Talkin' Tech column
Many of the laws that govern the retail tier were designed in the wake of prohibition with the goal of maintaining temperance. Over the past 80 years our attitudes towards alcohol have changed in ways that make these original concerns seem like an historical artifact. Today state action to block alcohol sales where they are illegal has become less important, as very few dry counties remain. Preventing sales to minors is still a major concern, but increasingly the enforcement of alcoholic beverage law more often resembles the concerns about discrimination found in the commerce clause. State laws on the sale of alcohol reflect the push and pull of competing economic interests. The National Association of Wine Retailers (NAWR) has outlined a legislative agenda for how wine retailers can shape their future.
California wineries were successful in convincing the Supreme Court that states should view the commerce clause as preeminent when it comes to shipments across state lines. That states continue to discriminate against out-of-state retailers is characteristic of the failure by wine stores to organize an effective challenge to state laws. NAWR hopes to become a focus of organized retailer action on this front and is supporting bills in TX, NY and CT that permit shipments from out-of-state retailers.
Third Party Marketers
Whether the marketer is Amazon, Drizly, or any number of consumer apps that seek to connect customers to retailers with wine to sell, they all suffer from the lack of a well-defined regulatory framework. Licensees must control the sale, payment and delivery of alcoholic beverages, but who sets the price of wines and how does a state agency enforce policy on a third party where it has no jurisdiction?
This mostly concerns the sale of grey market wines beyond the allocation of the local wholesaler. A recent move in NY to limit this provision drew attention to the importance for restaurants to be able to access older vintages and rare wines from secondary sources.
This proposal would allow retailers to purchase direct from producers, a privilege that, when available, is often be restricted to in-state purchases. Where this happens discrimination is a concern. This proposal challenges the unique role of wholesalers in this industry.
In states where a retailer may own multiple locations, it is inefficient to require the retailer receive deliveries directly from a wholesaler for each location.
30-day credit terms
There are still states where retailers are required to pay COD for all their deliveries. Retailers should have access to at least 30 days credit terms.
It is time for wine retailers to take an active part in shaping the marketplace. While there are those who seek protection from competition, the future is more likely to resemble an expanded marketplace as we move towards a single national marketplace for wine sales. NAWR seeks to have the same principal of non-discrimination applied to retailer sales that the Supreme Court delivered for wineries.