Vice Squad
Sunday, May 29, 2005
Be careful what you wish for

In an earlier brief post, I suggested that the Supreme Court decision (links to opinions are here; see also Jim's earlier post) that prohibited discrimination between in-state and out-of-state wineries with respect to direct shipments of wine was good news for wine drinkers. Alas, I was wrong. Perhaps I underestimated the power of the state wholesalers lobbies. There are, of course, two ways to eliminate disparities in the treatment of in-state and out-of-state wineries. One is to let everybody ship the stuff directly, the other is to prohibit direct shipments altogether. It appears that at least some of the states are taking the latter route. Things are moving in that direction in Michigan and, as I learned this morning, they have already arrived there in Indiana (see this column by Mike Leonard; paid subscription required).

Apparetnly, on May 20, the Indiana Alcohol and Tobacco Commission (ATC) issued a letter stating that in-state direct shipments of wine are considered to be Class A misdemeanor. ATC Chairman, David Heath, seems to have taken a line from Casablanca by appearing to be shocked by the discovery that gambling, ooops.. sorry, direct wine shipments have been taking place in Indiana. His letter to the wineries begins in this way, "It has come to our attention that wineries in Indiana may be engaged in selling wine by taking orders via Internet, mail, and/or telephone and directly shipping to the consumer's address." Of course, these shipments have been going on in Indiana for only 30 years. In fact, the initial lawsuit contained evidence about direct wine shipments in Indiana obtained from the official state website that describes Indiana wineries.

Incidentally, the legality of changing the rules by an ATC letter without going through a formal admninistrative process is questionable. So, perhaps this letter will be challenged and ATC will be forced to jump through some bureaucratic hoops first. But now I am not sure if it is such a good idea to press ATC to follow the rules. God knows what the regulators will come up with during the formal administrative process of revising their interpretation of the current Indiana law.

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