There Will Be No Tucking of Tails in the Wine Shipping Battles

A response to an indignant follower...

I recently received an email inquiry from a Gmail account asking the following:

“How much money and how much of the courts [sic] time are you going to waste with your idiotic idea that states don’t have the power to ban wine shipping from retailers? You’d think that three decisions by courts might have led you to tuck your tail between your legs in disgrace.”

Here is my response (Hint: there will be no tucking of tails):

For many years commentators, judges, and advocates of discriminatory alcohol policy linked to the “three-tier-system” of alcohol regulation have adhered to a fundamental misunderstanding of how alcohol regulation operates. This misunderstanding has been enshrined, importantly, in court decisions. Understanding the misunderstanding is fundamental to moving toward a future in which gatekeeping, rent-seeking, unfairness, and unconstitutional laws do not form the basis of alcohol sales in the United States.

The fundamental misunderstanding at the heart of the alcohol regulatory and legal system is how the “three-tier system” operates. This “system” only has two things that are inherent to it, particularly from a legal and jurisprudential perspective: 1) a state grants licenses to alcohol businesses operating in their state, and 2) licensed retailers located in their state are required to purchase their inventory from in-state wholesalers.

That’s it, those are the only inherent and essential elements of a three-tier system.

These essential elements of a three-tier system assure that wine offered for sale at retail WITHIN the state moves through a legally prescribed route: Licensed In-state wholesaler to licensed in-state retailer.

What’s critical to understand is that nothing about this three-tier regulatory scheme prohibits a consumer from purchasing alcohol from an out-of-state source. The 21st Amendment does not give states the power to prohibit their residents from purchasing alcohol from a source located outside the state. The question at issue in numerous lawsuits over the past 25 years is not whether a state can prohibit its residents from buying alcohol from outside the state that did not move through the state’s own three-tier system, but whether the consumer may arrange to transport their wine purchase into their home state.

Equally important to appreciate is that when a consumer in one state makes a purchase of alcohol (via telephone or the internet) from a retailer in another state, that transaction has no impact upon nor disrupts the flow of alcohol through their home state’s three-tier system.

It is important to note that it was the United States Supreme Court that is the source of the misunderstanding that has wreaked havoc on the distribution of alcohol in the U.S. and led to confusion within lower courts that have heard challenges to discriminatory wine shipping laws. Here’s why.