Land of the free

A California Zinfandel fan, based in New York, is so furious she can’t order her favourite wine over the internet that she’s taking her grievance to court.  The future of interstate drinks sales hangs in the balance, says Jon Rees

THE UNITED States Supreme Court will soon make a decision that will not only transform the American wine market, but will also show whether America has really kicked the Prohibition habit.

Hard to believe now, but it is easily within the lifetime of the average American pensioner that it was against the law to have an alcoholic drink in the United States.  The Noble Experiment, as it is still sometimes called, lasted an astonishing 14 years, from 1919 until 1933 and was, as so often, a law passed with the best of intentions.

Though even the Puritans, were not against drink, and certainly most presidents were never inclined to take the pledge – Thomas Jefferson grew grapes and called wine "a necessary of life" – there is a long history in the United States of campaigning against drunkenness.

For many Americans, too, their religious beliefs were inextricably entwined with casting out alcohol.  The result, almost from the seventeenth century onwards, was that ordinances and regulations were passed in an effort to control drink, with towns and entire counties, deemed "dry".

America was not the first state to ban drink; Finland and Iceland also did so (beer was banned in Iceland until 1989), while Canada banned it in large swathes of the country over many years.

However, when this astonishingly bold, idealistic move ended in the US, the effects of depriving a hardworking, thirsty nation of a time-honoured aid to relaxation and conviviality was plain to see.

Organised crime was entrenched and it was the law, and lawmakers, that had fallen into disrepute.  Furthermore, per capita consumption of alcohol had risen in every year of the ban.

So, in 1933, the 21st Amendment was passed which ended Prohibition for good.  It did not usher in an entirely laissez-faire system, of course, since it allowed states to regulate the sale of alcoholic beverages.

A lot of states were reluctant to give up control of drink entirely, so many, like New York State, passed laws requiring out-of-state sellers of alcoholic drinks to sell only to licensed wholesalers in the state, who would then market the wine and beer to other retailers.

This also means, of course, that individuals who might want to buy wine directly from out-of-state wine sellers or vineyards are forbidden to do so, while winemakers complain that the statecontrolled wholesaling system is too expensive for them to use.

This was irksome to a few, but nothing more, until 60 years later and the dawn of the internet.  Now it has become a major issue, requiring the intervention of the United States Supreme Court, no less.

The reason is that the internet has become the key medium for wineries, especially the smaller wineries, to reach faraway customers.  There are an awful lot of small wineries in the US, too.

In fact, 80% of American wineries are rated as small, producing less than 25,000 cases a year; and there are now nearly 3,000 of them, up from a mere 500 a quarter of a century ago. Meanwhile, the US has become the fourth largest wine market in the world worth around $22 billion a year.

But when visitors to a vineyard in one state like what they drink and want to order some when they return home, they cannot do so.  It is an issue for 24 states which do not allow direct shipments to their residents, including New York, the secondbiggest wine consuming state after California.

One day it became an issue for one New Yorker in particular, a commercial real estate broker called Robin Brooks-Rigolosi, who is rather fond of Californian Zinfandel.  She tried to order some over the internet from a small Californian winery run by David Lucas, but  discovered it was illegal to do so.

So, she, Mr Lucas, and a libertarian public interest law firm called the Institute for Justice, took the case to court.  Their contention is that the law preventing Ms Brooks-Rigolosi from ordering wine violates the commerce clause of the constitution which bars states from enacting laws which unduly interfere in interstate commerce.

Ms Brooks-Rigolosi says her case is about liberty, noting that the internet allows her access to art, culture and products from afar, but "parochial" state laws are preventing her from enjoying a perfectly legal commodity.  Similar cases have been brought in Florida and Michigan.

The states, meanwhile, have argued that since the 21st Amendment explicitly gives them the right to regulate alcohol, commerce law restrictions do not apply.  They also argue that the existing laws help limit underage drinking since unrestricted internet marketing could see underage consumers ordering drink from afar.

The wineries dispute this last point since the main delivery companies require an adult signature when they drop off wine to a customer, while they also suggest that younger people are simply not interested in ordering a $30 bottle of Chardonnay over the internet.

Price is another key issue since the small wineries say they cannot afford to sell their wine to the wholesalers at the discounts they demand.  Lucas, for instance, says he would ship only 50 cases of wine into New York and cannot afford to sell his wine to wholesalers at the 50% discount they want.

The states’ argument is further undermined because some states allow direct shipping of wine to customers from in-state wholesalers. 

Legal experts say it is anybody’s guess which side the Supreme Court comes down on since three members have in the past indicated that the 21st Amendment overrules the commerce law, while two have made judgments suggesting the opposite.

On their decision, after at least five years of legal disputes, rests the shape of the American wine market.  Asked what he would do when Prohibition was repealed, the famous Untouchable detective, Elliot Ness, said simply, "Have a drink."

Wine consumers in the United States must hope the judges of the Supreme Court are in the same frame of mind.