The Federal Trade Commission just finished a study of wine buying that looked at how laws preventing consumers from ordering the nectar of the vine online affect prices at conventional stores. The study draws some interesting and potentially broad conclusions, even though the agency focused on just one state, Virginia.
But looking through the findings I was struck by my own questions. Who buys his burgundy and blush online anyway? And why would you? My husband and I seem to find plenty of terrific wines at a variety of local shops, including Sutton Place Gourmet, the tiny Grape Finds in Dupont Circle and even Whole Foods (formerly known as Fresh Fields).
It turns out there are all manner of people out there who like to buy wine online, and for good reasons. Many others, though, can't make such transactions because state regulations won't allow it. That is provoking some seriously feisty battles in a variety of states -- a pretty good example of a passionate group of consumers rattling the cage to get what they want, and, some might argue, deserve.
The problem with online buying isn't really the purchase itself, it's the shipping. Many states prohibit "direct shipments" of any alcoholic beverages to consumers, and in some places, including Maryland, it's even a felony. Other states simply make it terribly burdensome, requiring middlemen and licenses.
The arguments against allowing direct shipments of wine to consumers are, on their face, understandable. States have the right, under the 21st Amendment, to regulate the sale of alcohol within their borders. That helps to keep alcohol sales controlled, prevent underage purchases and provide for efficient collection of taxes.
Many states believe that direct shipping of alcoholic beverages to consumers would circumvent these controls, potentially putting more alcohol into the hands of minors and keeping money out of state coffers. The Wine and Spirits Wholesalers Association, the trade group representing the distributors that sell to wine stores and supermarkets, supports this position.
This system of controlled distribution has "served consumers and states well for seventy years," the association says on its Web page. "WSWA is committed to preserving the integrity of the state-based alcohol control system."
Well, of course it is. After all, that system benefits wholesalers by making them a critical link in the sale of wine.
But maybe the wholesalers are having the same reaction to the direct shipping of wine that many other retail sectors have had to the advent of Internet sales: fear. When the Internet took off, many retailers worried that it would hurt their market share. But those who have embraced the new technology have largely benefited from it. The Internet is another avenue of competition, but one with great potential as a marketing tool and an alternative revenue stream.
Of course, there are still some prickly issues about direct shipments of alcohol even if the wholesalers were more open to it. There are real concerns about underage drinking and tax collection. But wine lovers argue these issues can be handled without restricting consumer choice.
Most people interested in buying online or directly from a winery want access to wines they cannot get at their own local retail outlets. Some are collectors who might buy fairly regularly from small and high-end vineyards. Others are just regular folks who occasionally want to get unusual reds and whites from various California wineries -- people like Jason Anderson of Falls Church.
"I have family in California, so we travel out there quite frequently," he said. "We like to pick up wine when we're out there -- and then you can't get it shipped to you. . . . It's unfathomable."
Devotees say they're willing to pay taxes and support efforts to curb underage drinking. But they say the states can create a system that achieves those goals while still allowing consumers freedom of choice. Wineries can be responsible for collecting the taxes. Delivery companies can be required to get the signature of someone 21 or older. Besides, argue many wine lovers, the majority of online purchases in states where direct shipping is legal is for higher-end wines that kids wouldn't be buying.
It was wine lovers' passionate feelings on the subject that prompted the FTC to wade into the ferment in the first place. The agency held a public workshop on barriers to electronic commerce back in October. "Wine was one of the most contentious panels, and wine was the panel that we got the most public input on," said Jerry Ellig, acting director of the office of policy planning.
The FTC soon realized there had been no empirical studies of the matter, leaving the arguments on both sides largely theoretical and ideological. "We thought, 'Let's try to gather some data and figure out how big or how small an effect this kind of law might have in one state,' " Ellig said. The agency studied all the wine shops in McLean and compared their offerings with those online.
The study found that "if interstate direct shipping were legal, Virginians would have access to greater wine varieties and some lower prices," he said. The study looked at 83 of the most popular wines and found that about 15 percent of them were available online but not in retail stores. It also found that the more expensive wines generally cost less online, even after shipping charges. On the other hand, shipping made most wines under $20 a bottle cost more.
The agency's working paper on the subject seems to add one more argument in favor of the wine drinkers. But they've got a pretty persuasive case even without that, which may explain why there's been a steady march nationwide toward loosening up the direct-shipment laws.
"I wouldn't expect that all states will open up, but over time, more and more will," said Jeremy Benson, director of Free the Grapes, a group that's fighting for the repeal of such legislation. "It's one or two every year."
What's changing some of these laws are suits alleging that direct-shipping bans violate laws protecting interstate commerce. One state that will change this year is Virginia. Two weeks ago the governor signed a bill that would allow for direct shipments of wine to consumers. That law will take effect July 1. Similar legislation is pending in New York and Texas. In Maryland, though, direct-shipment laws have become more restrictive in recent years. The District allows limited direct shipments of wine.
I don't know of any other type of shopping that is as restrictive or arbitrary as the online buying of wine. But it seems the tide is turning for the 2,650 tiny wineries that together make less than 5 percent of all the wine produced in this country. Cheers.
If you have a question, comment or concern about what you see when you shop, write to Margaret Pressler at firstname.lastname@example.org.