Archive for August, 2006
Kentucky court strikes down interstate shipping ban
August 28th, 2006
A US District Judge in Kentucky struck down the current regulations that allow only Kentucky wineries to ship to Kentucky consumers. Bill Nelson has the full scoop in the WineAmerica News Brief and at their state issues website. As expected, the judge found the discriminatory nature of the Kentucky statutes to be unconstitutional and in violation of the Granholm decision because Kentucky wineries could ship to consumers while out of state wineries were prohibited from doing the same.
However, a new twist to the ongoing Granholm compliance issue emerges from this case. In his opinion, Judge Charles Simpson finds that the “in-person purchasing requirement discriminates, in practical effect, against interstate commerce.” He goes on to say that the onsite requirement is unconstitutional because it amounts to ‘differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.’” His solution is to require that offsite purchases are allowed if onsite purchases are allowed.
The end result of all of this is that licensed in-state and out-of-state wineries that produce less than 50,000 gallons (roughly 21,000 cases) per year can now ship directly to Kentucky residents for both off-site and on-site sales. Of course there will be appeals and much will continue to shake out in Kentucky, but the new twist sets a precedent that could create yet another ripple effect in the realm of wine shipping compliance.
Read the full Opinion here
Read the full Court Order here
Brian Williams Scolded By SWRA
August 14th, 2006
The intense response from the wine industry to the WSWA’s study last Thursday continues. This time, the target is Brian Williams and the crew from NBC news who ran an out of context fluff piece Wednesday night featuring the soon to be released study (Click here to view the newscast – PC only). The Specialty Wine Retailers Association (SWRA) sent a letter Monday afternoon to the crew at NBC admonishing them for their one-sided and deceptive reporting.
When speaking to the segment’s case study in underage internet ordering (the teenagers purchased Absinthe from a UK website), SWRA asserts:
(The) sting was not only a “sham”, it was a criminal sham and those who authorized it should be prosecuted
The SWRA is not out of place with their criticism. In addition to being the only news source to interpret the study’s findings in the WSWA’s favor, they clearly tried to associate wine shipping with the illegal importation of the hard liquor Absinthe. In one scene, the reporter stands next to a bottle of wine, a shipping box (including the “Adult Signature Required” sticker) and recites the policy of one online merchant, “We don’t think the Feds will shoot a stun grenade through your window for placing a little online order”… which was actually pulled from a UK company’s website in the general “Is Absinthe legal” category… having nothing to do with shipping the product.
SWRA’s letter goes on to cite examples of retail compliance and basically argues the common case that teenagers won’t spend the time, money or logistical effort to order wine online. It’s a fun read and the first response directed towards the softball pitchers at NBC.
Free the Grapes responds to WSWA
August 11th, 2006
Free the Grapes put out a quick response to the WSWA survey noted below. Here are a few excerpts
The wine wholesaler cartel today trotted out a tired argument already dismissed by the U.S. Supreme Court, the Federal Trade Commission, and state alcohol regulators.
The intent of the Wine & Spirits Wholesalers of America’s “survey” on underage access is to deflect attention from their real motivation: economic protectionism. Over the past 30 years, the wholesale cartel has consolidated from 11,000 wholesalers to an oligopoly of two or three per state. The wholesalers, not consumers, have been deciding which wines are available. But now, the courts, Federal Trade Commission, and state legislatures are supporting consumer choice and responding with reasonable regulations and controls.
USA Today also took a completely different interpretation of the survey results than did the WSWA, finding that teens are not rushing online to buy wine.
A year after the Supreme Court made it easier for wineries to ship products to customers in a different state, a new survey indicates that teens haven’t necessarily rushed to use the Internet to buy alcohol, as critics of the court’s decision have feared.
What do the wine bloggers have to say about the WSWA campaign? Tom Wark gives a good summary here.
TSA Prohibits Carry-On Liquids (including wine)
August 10th, 2006
In light of recent disrupted terrorist plots to detonate liquid explosives in commercial airlines, the Transportation Security Administration is implementing the following security procedures effective immediately:
NO LIQUIDS OR GELS OF ANY KIND WILL BE PERMITTED IN CARRY-ON BAGGAGE. ITEMS MUST BE IN CHECKED BAGGAGE. This includes all beverages, shampoo, suntan lotion, creams, tooth paste, hair gel, and other items of similar consistency.
This includes “all beverages” with the sole exceptions of baby formula, breast milk or juice (in the presence of a small child or baby). Expect to send your onsite purchase of wine below deck, or dumped out.
After September 11th, President Bush signed legislation allowing the shipment of “onsite” purchases in certain states to help avoid the need to carry on bulky wine packages. It looks like this provision will certainly come in handy for the wine industry’s tourists in the foreseeable future.
A response from the common carriers assisting in this matter is expected.
WSWA To Release New Underage "Research"
August 9th, 2006
Update #1: View NBC segment
Tomorrow the WSWA will release a research survey conducted by TRU (Teenage Research Unlimited):
“confirming that millions of teenagers have ordered alcohol online, or have a friend who has ordered online. The survey provides hard evidence about teenagers’ online activity, their purchases of alcohol, their awareness of the ability to purchase alcohol online, and their levels of parental oversight”
Not only will the survey press the case that teenagers like to (and can) purchase alcohol online, but it will also focus on the general compliance enforcement policies of the state liquor control authorities.
Highlights from the study and the findings will be presented during NBC Nightly News this evening at 7pm EST. This is obviously a highly coordinated PR effort on the part of the WSWA and perhaps the beginning of a new campaign from an organization that has fought bitterly against the progress direct shipping has made since Granholm. No one wants to see alcohol in the hands of minors; however we know that states are taking the right steps to ensure that even orchestrated stings do not result in underage reception of alcohol. A specific example is Michigan, who will officially announce in a few weeks that ChoicePoint and IDology are approved as authorized vendors for online age verification. Combine this technology with the carrier’s responsibility at time of delivery and you’ve got enforcement at both ends of a transaction.
I’m sure we will see a vigorous response from the wine industry to this latest volley of “research” from the WSWA. Full text of the WSWA notice is below:
All:
I wanted to give you a heads up on some very important research that we are releasing tomorrow. The information is embargoed until tomorrow and your office will receive a courtesy copy of the research as we release it to the public.
WSWA is releasing a research survey conducted by TRU (Teenage Research Unlimited) confirming that millions of teenagers have ordered alcohol online, or have a friend who has ordered online. The survey provides hard evidence about teenagers’ online activity, their purchases of alcohol, their awareness of the ability to purchase alcohol online, and their levels of parental oversight.
In addition we are releasing a summary of a telephone audit we conducted of the liquor control authorities in all 50 states and the District of Columbia asking the following questions: 1) who in your state has jurisdiction to conduct compliance checks of online purchases of alcohol, 2) has your agency conducted any compliance check or enforcement of online alcohol sales, and 3) how much money did the agency spend. Not surprisingly, only five states report having conducted any compliance checks of online alcohol purchases and in each of the five states alcohol was easily ordered over the Internet by minors.
All of this will be highlighted on NBC Nightly News tonight at 7pm EST.
Unfortunately I cannot share the research with you until tomorrow since the information is embargoed. Please call me with any questions.
Best,
Juanita D. Duggan
President and CEO
Wine and Spirits Wholesalers of America
