Wine

Wine: Internet Sales Benefit Some Sellers, Consumers

(By James M. Thresher For The Washington Post)
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By Dave McIntyre
Wednesday, June 3, 2009

Tom Natan is a wine retailer without a store. From his home in Adams Morgan and a small self-storage warehouse a few blocks away, he runs Firstvine.com, a virtual retail operation specializing in wines from southern France. In the era of Amazon.com, with the Internet challenging bricks-and-mortar retailers for primacy, this may not seem surprising. Given the archaic regulatory system by which this country controls the distribution of alcoholic beverages, however, Natan's modest operation seems almost revolutionary, despite its small scale.

"I have a regular retail license. The District does not require a walk-in shop," Natan said. He personally delivers orders of a single bottle or more to any D.C. address and has sent wines by FedEx to Virginia and California. District residents can order wines through Firstvine.com and receive them the next day.

I would like to buy some of Natan's wines, particularly the Domaine Chaume-Arnaud 2007 "La Cadene," a beguiling $20 Rhone white that offers peach and exotic spice flavors that unfurl in the glass. But I can't, because I live in Maryland, one of 15 states that outlaw direct shipping of wine to consumers. (Legislation that would have allowed Marylanders to have wine shipped to their homes failed again this year in Annapolis in the face of stiff opposition from the wine wholesale lobby.)

The Internet is a regulatory minefield for wineries and retailers, and it is frustrating for consumers who don't live in permissive jurisdictions. The "new media" and 21st-century retailing must grapple with the 21st Amendment to the Constitution, which repealed Prohibition but left alcohol regulation to the states. Matters improved after the Supreme Court in 2005 ordered states to treat in-state and out-of-state shipments equally. But lots of states impose multiple fees and other requirements for out-of-state wineries and retailers wanting to sell to their residents.

Many local stores grapple with this shifting landscape of shipping laws. Vanessa Moore, owner of Unwined in Alexandria, took advantage of a new Virginia license allowing Internet wine sales and launched http://www.unwinedonline.com in December. Her first orders were from U.S. residents abroad sending gifts to friends back home. She has had "random success," she says, mostly with "esoteric" wines that might not be easy to find elsewhere. Moore uses a company called Ship Compliant to help her stay on the good side of the law in the various states where she sends wine.

Stores that specialize in rare wines or that can offer high-volume discounts are likely to have the most success selling over the Internet. Addy Bassin's MacArthur Beverages added a shopping cart feature this year to its Web site, http://www.bassins.com, and now receives 10 to 20 orders per day, store manager Mark Wessels said. Far from being a fusty old store, MacArthur even announces news of sales and wine tastings via Twitter. (As of last week, the store had 23 followers.)

The Internet has been a boon for sales at Schneider's of Capitol Hill, says co-owner Jon Genderson. The store now draws about 15 percent of its business from out of the area but also has many local customers who order online for pickup at the store. Traffic to the Schneider's Web site, http://www.cellar.com, also has been helped by favorable reports on Yelp, a popular review site, he said.

The District of Columbia allows wineries and non-D.C. retailers to ship to any District address, but with a limit of one case per address. Virginia residents can buy two cases of wine a month from any single out-of-state winery or retailer. Virginia charges shippers $130 for a license; shippers also must report their sales monthly. (State-by-state shipping laws are summarized at http://www.wineinstitute.org).

Most wine lovers prefer visiting a traditional store, especially for that bottle for dinner tonight. But collectors love surfing the Web for bargains.

"There is a fantastic amount of competition for this market," says Joe Heflin, a wine collector who says he has bought 30 to 50 cases annually for the past five years from various Internet stores based across the country. That competition yields steep discounts and occasional offers of free shipping (shipping costs vary but typically are about $30 per case).

Heflin favors Wine Library and Wine Chateau, two large New Jersey stores with vigorous Web operations. The bottles arrive at his home office in Reston the next day. "They offer price and convenience, but you have to know what you want," Heflin says. "This is not something that would work for someone who wants only a few bottles or personal service. But for someone who knows what they want and can buy by the case, it's an incredible opportunity."

Dave McIntyre can be reached through his Web site, http://www.dmwineline.com, or at food@washpost.com.


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