Professor Bainbridge...on law, politics, religion, culture & food

Lifson on Interstate Wine Shipments

Thomas Lifson of the fabulous Sunset Cellars (which I love) and the equally fab American Thinker blog posts on the Supreme Court's forthcoming decision on the validity of interstate wine shipments:

As matters currently stand, small wineries [full disclosure: I am a partner in a small winery] can only gain access to the markets of many states by working with a distributor with a license issued by the state government. If no distributor is willing to take on the winery’s products, the winery is frozen-out of the market. A number of states permit direct sale to consumers by shipping-in from out of state, but many states do not.

The state regulatory barriers create many obstacles for small wineries to grow into large wineries, and strengthen the bargaining hand of the distributors, some of whom are extremely large corporations. It is not in the least uncommon for the distributor’s and retailer’s gross margin on a bottle of wine to be as large or larger than the producer’s gross margin. In other words, if wineries are able to ship direct to consumers, they can more than double their profit margin on the bottle.

I've got a TCS column coming out on this issue (assuming Nick takes it!), which inadvertently failed to link Thomas' post. Sorry about that!