My Op-Ed of a wine column: outdated state laws and a powerful lobbying group conspire to stifle free trade and consumer choice. Sherry-Lehmann takes a principled stand.
On My Soapbox
New York State is in the dark ages in the sale of wine and spirits. It is subject to arcane and outdated laws that defy the logic of a free marketplace and benefit a group of entrenched interests. Situations like this always harm the consumer.
A current controversy involves direct shipping across state lines. This might sound like a bureaucratic nicety, but the implications are of critical importance to small wineries and to consumers. Right now, New York State wineries as well as wine retailers are not legally allowed to ship their products to other states. And consumers of wine in New York are similarly restricted in purchasing, or at least having wine delivered, from outside the state.
Some states participate in reciprocal agreements for wine sales. New York is not one of them. In recent years we have seen Washington and Oregon surpass New York in the number of wineries and in national sales, partly as a result of their ability to ship across state lines. Proposed legislation to open interstate shipping was defeated last month in Albany. A ruling by the United States Supreme Court on a parallel suit concerning the Commerce Clause of the Constitution is expected by the end of next June.
I recently discussed these developments with Michael Aaron, chairman of Sherry- Lehmann, the celebrated wine shop in New York City, and a weekend resident of East Hampton. While Mr. Aaron has business interests at stake, he has also taken a principled stand and become one of the leaders in the fight to expand free trade and consumer choice. It is an odd situation, pitting Mr. Aaron against the very wholesalers that supply his store. The Sherry Lehmann two-page ad in the September 15th edition of the New York Times contains a scathing indictment, directly condemning the actions of the wholesalers.
The Wine and Spirits Wholesalers of America is a rich and influential trade and lobbying group. They have been in the forefront of the movement to prevent shipment of wines from state to state. Mr. Aaron now accuses them of going even further, of trying to create a cartel to stifle competition and also of trying to ban all retail deliveries. Yes, you read that correctly, and as evidence Mr. Aaron cites a letter written by the president of the Wine and Spirits Wholesalers of America. If taken to its conclusion, their proposal would prohibit all truck deliveries—even gifts—and even across town or down the street. Eliminating deliveries would of course eliminate the option to buy wine by phone, on the Internet, by fax, and through catalogs. The wine delivery truck, whether private or U.P.S., would disappear.
Retailers and wineries would become pay and carry operations, and we, as consumers, would be limited to buying only from places we can physically visit. It sounds absolutely wacky, but it is serious business that in the end would result in a small group of wholesalers consolidating power and controlling the market.
It is patently clear that not only businesses like Sherry-Lehmann would be hurt, but all retailers and winemakers and, most importantly, consumers. How absurd to think that your wine store could not deliver, that Long Island wineries could not send out their products on trucks, even, say, from the North Fork to the South Fork, and that we would not be able to shop around for the most reasonable prices and widest choices. As in every case where free trade is restricted, consumers would ultimately have fewer options and pay more. Yet that is what the Wine and Spirits Wholesalers of America is advocating. The Institute for Justice, a not-for-profit Washington-based organization, is the major opposition to this arrogant bid for power on the part of the wholesalers, and it is leading the fight in the Supreme Court to open interstate shipping.
This column is not about politics but it is about wine—about purchasing, consuming and enjoying wine. And this legal issue is of tremendous importance to our being able to do those things. Mr. Aaron’s newspaper message urges consumers to get information, voice their concerns and support the Institute for Justice, and I urge my readers to do the same.
It is a failure of Long Island’s wineries and of the Long Island Wine Council that they have not yet stepped up to the plate in any serious or forceful way on this critical issue. I have heard that some fear competition from California, but the examples of Washington and Oregon, which have open trade with California, show that competition helps rather than hurts a vibrant wine industry.
It is time for the wineries on Long Island to get involved and get behind the Institute for Justice. It would demonstrate a wine industry with backbone; it would show confidence in the ability of their wines to compete. I realize that some, especially small family operations, do not have the budgets to fund organizations, but the larger ones do, and every Long Island winery can become active in some way and let their customers know how our freedom of choice, our ability to find the best wines at the best prices, might be curbed.
