A premature celebration

The press has been quite jubilant about yesterday's Supreme Court ruling on direct shipment of wine ("Let those wine sales flow" claims USA Today) but we shouldn't pop the cork on that last bottle of bubbly since it may not get easier to acquire more.

All that the Court requires in its decision is that states adopt comparable winery-to-consumer shipping laws for out-of-state wineries as they do for in-state wineries. I applaud the decision on legal grounds, asserting that fair interstate commerce applies to alcohol sales, but expect it will make wine even harder to acquire.

We can classify states into three catgeories:

1. States that allow shipment from all wineries
2. States that allow shipment only from in-state wineries
3. States that allow no shipments at all (like Tennessee)

The case has no impact on the first and third category, since the decision requires only that policies for in-state and out-of-state wineries correspond. Additionally, it seems to apply to wineries only, not retailers, thus having no impact on Internet sales from cheaper retailers out of state.

But certainly there is good news for consumers in the few states with discriminatory policies? Perhaps not. What will states in the second category do when forced to set identical policies for out of state wineries. They either allow out of state wineries to ship or prohibit in-state wineries from doing so. Since the latter option is preferred by the well-funded distributor lobby, I'm guessing this is more likely

So, the Supreme Court decision is a victory for the principle of competition, but likely to reduce than create more competition, in practice.