Free at last! The Supreme Court rules on direct shipping

Wine consumers across America can rejoice with the Supreme Court ruling handed down this morning that allows direct wine shipments from wineries to consumers. Twenty six states including New York, Florida and Michigan had prevented direct shipments based on a legal framework dating from the patchwork repeal of Prohibition. (story SF Chronicle)

It was bound to be a close decision for the Court, pitting the free traders against the social conservatives, but in the end the free interstate commerce carried the day with the 5-4 decision.

“States have broad power to regulate liquor,” Justice Anthony Kennedy wrote for the majority. “This power, however, does not allow states to ban, or severely limit, the direct shipment of out-of-state wine while simultaneously authorizing direct shipment by in-state producers.”

“If a state chooses to allow direct shipments of wine, it must do so on evenhanded terms,” he wrote.

Kennedy was joined by Justices Scalia, Ginsburg, Souter, and Breyer. Showing how difficult an issue this represents for the Court and in particular this conservative Court, Justices Thomas and Scalia parted ways. Justices Thomas, Rhenquist, O’Connor were joined by Stevens in the dissent. This is a cleavage of the Court that rarely appears.

The 24 states that maintain some sort of limits on shipments will have to level the playing field between in-state and out-of-state wineries. Currently in New York, for example, wines from Long Island and the Finger Lakes can be shipped to residents in Manhattan. This ruling means that Governor Pataki and the legislature must decide whether to eliminate direct sales altogether or to allow California, Oregon and Washington state wineries the same privilege.

Given that Governor Pataki and the other 23 governors of states with limits on shipping are always looking for ways to boost revenue and they could do worse than follow last week’s example by Governor Rick Perry of Texas. Texas will collect sales tax revenue on shipments now as well as a shipper’s permit fee from wineries. Wine consumers will be waiting with eager anticipation that they decide to allow all shipments.

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4 Responses to “Free at last! The Supreme Court rules on direct shipping”

  1. […] or out-of-state, laws that conformed with the current legal environment two years before the Supreme Court decision known as Granholm v. Held was handed down. The only catch is that the winery has to have a license […]

  2. […] Alan Wiseman and Jerry Ellig studied wine retail prices in Virginia before and after the Supreme Court decision. Care to guess which period had the higher prices? Indeed, prices fell 26 – 40 percent with greater […]

  3. […] of wine shipping laws. Freer markets means greater availability and probably lower prices. The Supreme Court decision in 2005 paved the way for greater possibilities of shipping directly from wineries to consumers. […]

  4. […] wine consumers will be able to buy wines directly from out of state wineries. The Supreme Court ruled last month the New York system discriminated against out of state wineries in May. Yesterday, a mere 38 days […]


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