Tuesday, May 17, 2005

Don't pop the cork on the Krug yet

Victory for wine drinkers?

US Supreme Court uncorks key 'Wine Wars' ruling
WASHINGTON (AFP) - The US Supreme Court was the toast of wine lovers, after striking down state laws which bar consumers from buying bottles directly from wineries in another state.

Champagne corks popped among leading wine industry figures, and one campaigner said the dismissal of laws in 24 states marked "the best day for wine lovers since the invention of the corkscrew."

The Supreme Court came out with a 5-4 majority in a case, closely watched for its implications for Internet commerce, independent winemakers and the regulation of alcohol sales.

"If a state chooses to allow direct shipment of wine, it must do so on even-handed terms," Justice Anthony Kennedy wrote for the majority.

The court had to sort out two apparently conflicting elements of the US Constitution, one allowing states the authority to regulate alcohol sales, the other prohibiting any state from erecting barriers to interstate commerce.

The justices decided that laws in New York and Michigan were unconstitutional, because they allowed wine to be shipped from locations within those states but not from out-of-state locations.

"We hold that the laws in both states discriminate against interstate commerce in violation of the Commerce Clause," of the US Constitution, Kennedy wrote.

The ruling would still allow states to block any direct shipment of wine to consumers. But it would not permit a state to allow sales from an in-state winery while banning sales from outside the state.
I for one was overjoyed this morning and dropped Professor Bainbridge a line. I hope he won't mind if I excerpt a couple of paragraphs that I wrote:
Supporters of protectionist laws don't realize that they come at the expense of someone else. In this case, the laws "protect" wineries from competition, but at the consumer's expense. And while this may not happen often with wine, it means a consumer will have to go with his second choice, because laws requiring shipping through wholesalers make the consumer's first choice too expensive. The net result is part of the shipping industry built around redundant shipping, making it more expensive for the consumer.

Most respectfully to Justice Thomas (who dissented), I think there are better ways to hinder underage drinking. How can you completely prevent it, anyhow? Even if you require a middleman, nothing prevents a minor from borrowing an older sibling's credit card.
The professor has a more "sober" view on the situation, though. (Forgive the bad pun.) I defer to him on predicting the future of the relevant state laws. I fear he may be right.

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