The Court’s June decision struck down the in-state residency requirements for retailers, allowing the mega-chain Total Wine & More and other small retailers to open stores in the state of Tennessee, where the case was filed. None of the retailers responded to requests about how they intended to move forward with their brick and mortar store openings.
‘The liquor world hasn’t been this exciting since Al Capone’s monopoly on booze broke up!’ said Sean O’Leary, an attorney and the Chicago-based president of the O’Leary Legal and Policy Group.
However, the language of the Supreme Court decision went beyond the residency issue, to touch on the rights that might finally be accorded to fine wine retailers to sell within the United States as one entity, as opposed to 50 different countries.
There has been ‘a considerable amount of discussion in the industry concerning what the decision means and just how broad its meaning and impact is,’ said Tom Wark, the Napa-based executive director of the National Association of Wine Retailers. As an outspoken proponent of interstate shipping, he adds that there may well be more than just protectionist state wine shipping laws at risk as a result of this June decision.
The ruling, that says states can’t discriminate against out-of-state interests, has opened the potential floodgates to interstate shipping of wine, with the goal of feeding underserved markets and a focus on allocated wines. Not much has happened in the slightly more than a month since the ruling, but the next year is likely to see more action.
The highest court’s decision will have to, slowly, filter down into local courts. There are currently seven states debating if retailers can ship wine interstate according to the Washington, D.C.-based Wine & Spirits Wholesalers Association (WSWA), which represents the bulk of American wine distributors.
‘The battlefield is laying itself out,’ said O’Leary. He adds that while some ‘retailers may wait until the state issues a license or a permit…. [others] are probably shipping into [other] states as we speak.’
Wark adds that the real changes will come to fore next year, as the legislature comes into session. However, it is likely that ‘some states will drag their feet in making changes.’
Those who support less-restricted interstate commerce have generally done so in the belief that an open market would benefit less-populated wine markets. Many have also stressed that much of the fine-wine slated to be shipped between states is likely to be allocated selections, sold to those who often buy at auction.
Wark adds that, ‘over the next decade we are going to witness some really groundbreaking legal battles in the alcohol industry as a result of the sweeping and game-changing nature of the Tennessee Wine decision.’
See the full Supreme Court ruling here.
