Tuesday, April 16, 2013

Shipping Wine To Massachusetts: A Critique Of Andelman's Plan

Like many wine lovers in Massachusetts, I would like the ability to receive shipments of wine directly from out of state wineries. There are plenty of wineries which do not sell their wines in Massachusetts but which I would like to be able to purchase. However, I still cannot do so because the legislature can't seem to get their act together and pass a constitutional law which would allow it.

In 2006, a law was passed that barred many such shipments into Massachusetts but it was later ruled unconstitutional, a decision affirmed by the U.S. 1st Circuit Court of Appeals. Since that decision on January 2010, several efforts have been instituted to create a legal framework allowing out of state winery shipments. To date, despite the passionate advocacy of groups such as Free The Grapes, all such efforts have failed but I continue to have hope that will change one day.

Currently, House Bill 294, authored by Representative Theodore Speliotis, is in the committee on Consumer Protection & Professional Licensure and it is hoped that it will receive a hearing. Dave Andelman, of The Phantom Gourmet and Restaurant & Business Alliance, seems to feel that House Bill 294 is wrong and has offered his own plan in a column, A Better Way To Buy Out Of State Winein the Metrowest Daily News. I believe Andelman's three-point plan is unduly burdensome, overly protective and based on inaccurate information.

Andelman first point states that out of state wineries should pay a $1000 licensing fee rather than the proposed $100. He states this fee would be comparable to New Jersey but that is incorrect. The New Jersey licensing fee actually is a spectrum, dependent on the production level of the winery, and ranges from $63-$938. So Andelman has provided inaccurate information concerning New Jersey's license fees.

Andelman also sees this fee as a potential means of revenue for the state, yet there is no rationale for why that should be the case. He offers no evidence that a $100 licensing fee would be inadequate to administer the cost of the program. A $1000 fee would be burdensome on small, boutique wineries which already have limited resources. That is the rationale behind basing licensing fees on the size of a winery, to not overburden the small producers.

In his next point, Andelman wants to restrict wineries to shipping one case per month to a household. The current bill allows each household adult to order 2 cases per month. He tries to make the current plan seem scary by alleging a household could order over a million bottles of wine. While technically it is possible, the chance is so remote as to be silly. The average person in the U.S. purchases only about 14 bottles per year. The vast majority of the more dedicated wine lovers still probably own less than 1000 bottles. So Andelman's worries are essentially baseless.

Andelman's suggestion prevents consumers from ordering multiple cases of wine from a single winery at a single time. Consumers generally do not order a case each month of a wine they desire. They usually want to buy it at a single time, to ensure they get the wine before it sells out. They might buy two to three cases of a wine, and then may not buy from that same winery for six months or more. There is no valid reason to restrict sales to a single case per month. That would be an undue burden, based on the usual purchasing practices of wine lovers.

Finally, Andelman alleges that shipped wine should have to be sent to a liquor store, to protect against underage drinking. He mentions that a 20-20 story and a North Carolina University study proved that minors could easily buy alcohol on the Internet. Yet he does not provide a link to either the story or study, or provide any of the actual facts from these two sources. How reliable is this information? Where was the study conducted? Does the study envision a similar system as proposed by House Bill 294? These allegations seem more like fear mongering.

The fact is that wine stores have had plenty of problems in selling alcohol to minors. As one example, the city of Haverhill conducted a series of stings on bars, restaurants and liquor stores and 25% of those places were caught selling to a minor. You can find plenty of other examples of liquor stores which have sold to minors. Yes, we need to ensure minors cannot purchase alcohol but Andelman's plan would not guarantee that.

Andelman's plan also includes that a consumer would have to pay a "nominal" processing fee to the liquor store. Could a liquor store refuse to accept shipments? Who would regulate the amount of the processing fee? Would liquor stores want the added paperwork of processing these shipments? We should not place this added burden on liquor stores. Andelman though seems to believe this would help liquor stores who "..may be forced to terminate employees if their sales fall much further after the increased amount of liquor licenses which have been issued, including large liquor sections at supermarkets."  How is that so?

He fails to explain how it would help liquor stores. They would receive only a "nominal" fee so that shouldn't be enough to make up for any alleged lost sales. He provides no evidence or statistics on whether local liquor stores have seen decreased sales or not. He fails to provide any evidence that out of state shipments would significantly affect small liquor stores.

Dave Andelman needs to provide far more details, evidence and support for his plan as currently it is lacking in many aspects. He has yet to offer valid arguments or a valid alternative against House Bill 294. And his initial inaccurate information about New Jersey licensing fees casts doubt on his own research and credibility.

I will continue to side with Free The Grapes in supporting House Bill 294.


susan holaday said...

I agree with you completely on this - Andelman's credibility, I'd say, is suspect.

Todd - VT Wine Media said...

Clean and clear legal analysis. I do feel sorry for our neighbors to the south in more 'civilized' parts, where bureaucratic nonsense wastes time and effort to control something that should be free of restraint.
80 years after the constitutional debacle called Prohibition, the only bill of rights amendment that precluded rights, we still struggle with the ineffective righting of an unecessary wrong. I understand the need for state autonomy on some issues, but the inequality among us, with respect to interstate commerce and wine, is an embarrassment for all of us.

Anonymous said...

Each state charges about $1,000, but it is broken up in various fees, this suggestion streamlines the system.

The current Bill will never pass, at least he is trying to offer suggestions to get it to happen.

I think he is a big wine snob, so he probably is sincearly trying to help get something passed.

Anonymous said...

Andelman's personal and political connections make him very suspect as far as his motives.

Anonymous said...

America, the country where any mad man can buy a gun but where wine shipping is restricted... It would be funny if it weren't tragic.

Anonymous said...

Unclear of Andelman's motives but the argument seems to be against not for trying to allow wine shipments. Having had some of the best wine in some of the least known wineries, I would love to be able to have some shipped to me as they are unavailable in the stores. It's highly UNAmerican to allow out of state gun purchases (albeit with major hoops) but not wine...come on! When did one of the most liberal states become the most conservative? I guess only when it comes to alcohol...highly comical.

Anonymous said...

I recently was vacationing in Calif and purchased some wine in Napa for christmas gifts, 8 bottles. I was unable to ship this wine to my home because of this stupid, yes STUPID law. I could probably ship a gun but not 8 bottles of wine. Mass is a laughing stock in Calif. Who is this Andelman that he should have a say in not only how much I wine I can buy, but that I can't have it shipped to my home for my own consumption. I agree that his support for the reasons he gives is very suspect. We need to vote some grownups to the legislature, wake up folks