Illinois: Interstate Wine Ban Hurts Us All

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Say you live on the North Shore and frequent Pantheon Wine Shoppe, where you plan to buy a nice, rare Bordeaux for a valued New York client. Sorry, but unless you plan to deliver it yourself, you're out of luck.

For years, regulators have looked the other way while wine shops skirted a law prohibiting interstate liquor shipments. Many shops and wine auction houses here operated in a fuzzy gray area that allowed them to ship without consequence. But the gray area went black at the start of the year, after Gov. Bruce Rauner signed a bill that stiffened the penalty for interstate liquor sales, making it a Class 4 felony. For those of you keeping track, that puts the "crime" on par with aggravated assault and stalking.

As if the fear of a felony charge and confiscation of the wine weren't enough, the nail in the coffin of interstate wine sales came when, in recent months, FedEx and UPS stopped accepting liquor shipments unless the booze is bound for one of only 14 states that permit it. (It's illegal to ship liquor through the U.S. Postal Service.)

Not surprisingly, local liquor wholesalers, who contribute generously to legislators, were behind the new bill. The preposterous reasoning they give is that it keeps control of alcohol in-state, stopping minors from being poisoned by counterfeit spirits. What's more, a spokesman for the Wine & Spirits Distributors of Illinois, a trade group representing 68 in-state wholesalers, told Crain's contributor H. Lee Murphy: "We don't believe that the laws here are anti-competitive. Consumers in Illinois already have access to a wide assortment of brands."

What it is, of course, is a power play, a way to keep wholesalers at the center of the business instead of letting consumers buy direct from wine shops and auctions.

Obviously, the bill substantially hurts local wine merchants and auctions that have relied on having a large pool of national and foreign buyers for their products. It also hurts consumers, who, up until this year, at least, could have shopped for the best product and the best prices from around the country via the internet.

We applaud efforts to repeal the law, including several lawsuits brought by Joseph Doust, who runs 15 wine shops in Fort Wayne, Ind., called Cap n' Cork. Doust's recent lawsuit, which challenged the constitutionality of interstate-shipping prohibitions in Illinois and Michigan, was dismissed by a U.S. District Court judge in Chicago in June. Doust's lawyers have said he'll appeal.

Allowing direct shipping works for everyone: for consumers, retailers and the state. Oenophiles are able to access any wine from any shop and at the best price, retailers widen their circle of potential customers and Illinois collects revenue on the sales. There's no reason to keep this law that so clearly exists to protect liquor wholesalers and distributors. Join us in raising a glass toward repeal.

By Crain's Editorial Board
November 23, 2017
Source: Chicagobusiness.com