Issue link: http://read.dmtmag.com/i/230154
END POST TYLER COLMAN Time to Push Back 154 V I N EYA R D & WINE RY M ANAGEM ENT | But the elephant in the room is Amazon. The mega-retailer from Seattle has the power to transform the business of wine retail, but it has bent over backward to play by the existing rules and avoid showdowns with regulators – to such an extent that it still has not launched wine retail sales in New York and operates only in a handful of states. The whole situation is a mess. Consumers, innovative retailers, wineries and states would all be better served by clear rules, transparent decision-making and a loosening of the strictures that have kept wine unsold in warehouses rather than uncorked and on dining room tables. U n f o r t u n a t e l y, t h e r e 's b e e n a tightening of laws affecting wine retail, as only 14 states permit outof-state shipments, down from 18 in 2005. Clearly, this is headed in the wrong direction. In the wake of the Supreme Court's 2005 Granholm v. Heald decision, which opened up sales for wineries by striking down discrimination against out-ofstate producers, retailers should be afforded greater protections. New Hampshire offers a way forward. The state charges out-ofstate retailers $500 to ship to Granite State residents. Given that New York is a much larger market, a retailer such as Wine Library might well pay $5,000 or more to have the right to ship to New Yorkers. Multiply that permit fee by a few hundred retailers and throw in 7% sales tax collections, and the New York treasury would get a boost, particularly important in an age of budget cutbacks. Jan - Feb 2014 So while there's an easy policy way out, what's lacking in many states is political will. The New York State Liquor Authority is an appointed board that operates with all the transparency of a papal conclave. Unaccountable to voters, the smoke it blows doesn't obscure the fact that its actions show that consumers, innovation and even state revenues don't figure prominently into its calculus. There's more than a whiff of influence of large distributors setting the agenda at the liquor authority, and one thing distributors don't like is wine coming in from out of state. To have things change in New York and the 35 other states that don't have reciprocal retailer shipping on the books, someone will have to push – and hard. It could come from Wine Library, which continues to ship wine to New York and could provoke a showdown. If Amazon threw its bulk behind the cause, it would garner considerable attention. A new consumers' organization emerged last year – the American Wine Consumer Coalition – and the National Wine Retail Association has been fighting legal battles for several years now. If wineries gave a hand to the retailer fight, via California's Wine Institute, other organizations, or individually, then wine would flow a little easier across state lines. (Opinions expressed in this column do not necessarily reflect those of Vineyard & Winery Management.) ine Library, a wine retailer in Springfield, N.J., was catapulted to international visibility thanks to Gary Vaynerchuk's gonzo videos. In more than 1,000 episodes of Wine Library TV, Vaynerchuk tasted wines outside in a snowstorm, interviewed the biggest names of the wine world, and spit in a bucket emblazoned with the logo of the New York Jets. Sales jumped with the store's notoriety, topping $60 million as the shop shipped cases of wine around the country, including New York. (Vaynerchuk eventually jumped ship to pursue his own social media consulting company.) In late summer 2013, New York sent something to Wine Library: a cease and desist order. That's right, the counsel to the New York State Liquor Authority told Wine Library to immediately stop shipping to New York residents because it doesn't have a New York retail license. The Liquor Authority chose its high-profile target for the confrontation it afforded; at least one other retailer in New Jersey, online seller WTSO, currently has more revenue. Why would the authority take on one of the best-known wine retailers in the country? Because it is sending a message to sellers of all stripes as it grapples with the changing economics of wine retail. The authority took a shot at Lot18 when the company's business model let it profit from the sale of wine by using a retailer's license. New York fired its salvo at Wine Library as a warning to out-of-state retailers. Tyler Colman, author of the wine blog Dr. Vino, teaches wine classes at New York University and the University of Chicago, and wrote the book "Wine Politics: How Governments, Environmentalists, Mobsters, and Critics Influence the Wines We Drink." Comments? Please e-mail us at feedback@vwmmedia.com. w w w. v wm m e d i a . c o m