A (very thin) Silver Lining from Covid 19?

silver liningI like the sentiment of the headline from W. Blake Gray’s discussion of the state of the wine business and the threat of declining demand:

“Save the World: Drink More Wine”

Unfortunately, he skips a step. Saving the world first requires getting rid of the monster in the White House. The ensuing celebration should send wine sales through the roof.

But its not all gloom for the wine industry. Writing in The World of Fine Wine, Jim Clarke thinks there might be a silver lining to this horrible pandemic—the end of three-tier.The spike in online and DTC orders has put a spotlight on the difficulties involved in shipping wine to consumers. People who never ordered wine online have begun doing so; according to some observers, the number of online wine buyers has doubled or even tripled. Many are accustomed to the ease of ordering other, less-regulated goods online, and probably reacted with dismay to the unexpected hurdles their wine orders posed.

That provides plenty of leverage to efforts to continue breaking down shipping restrictions.

The three tier system of alcohol distribution requires retailers to buy wine from wholesalers and allows state governments to regulate wine shipments. This was part of the regulatory apparatus that emerged at the end of Prohibition as a way of discouraging consumption by increasing the price of alcoholic beverages and limiting the market power of large firms. But these laws no longer make sense. They do nothing but inhibit consumer choice by making it difficult to buy out of state wines. As Clark notes:

Wholesaler arguments against allowing interstate shipping are weak, and have largely centered on tax collection, protecting minors, and protecting the public from counterfeit alcohol. DTC shipping has already proven that states can institute workable solutions to collecting that tax income; likewise with “adult signature required” deliveries by UPS and FedEx… Arguments about counterfeit alcohol sound eerily similar to the Trump administration’s concerns over voter fraud. At best they can point to problems in other countries…

A more accessible wine market won’t erase the scars from 2020, but there is something to be said for drowning sorrows in a glass of the wine you want rather than the one you had to settle for.

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