Corkscrew - Over the Line, Part 1

Back during Prohibition in the 1920s, Americans were forced to pay homage to seedy, toothless bootleggers to get a buzz. Choices boiled down to distilled spirits and whatever someone could brew in their basement. Once the experiment failed 13 long years later, Americans breathed a collective sigh of relief, believing the government’s control over their beverage choices had evaporated. Unfortunately, they were wrong.

When Prohibition ended, the regulation of all alcohol fell into the states’ laps. Some states — Georgia, Florida, South Carolina and North Carolina included — established a complicated patchwork of liquor laws, known as the “three-tier system.” In order to do business in these states, a winery must establish a relationship with a wholesaler before their product lands in the consumer’s hands. The system, according to the government, is necessary to collect taxes and to control underage drinking. But today, “three-tier” has evolved into an anti-competitive nightmare, with the wholesalers holding the state-sanctioned prize: control over which wineries can distribute wine in the state.

Currently, 2,100 wineries call the U.S. home. Of these, roughly 20 percent are represented by wholesalers in all 50 states. Although this limited selection may be great for most folks, adventurous wine consumers seeking obscure gems face a brick wall of legalities. If you’ve ever tried to order wine online or ship wine to the Southeast, chances are the website or winery informed you that it’s illegal (even a felony in Florida). Since the alcohol isn’t following the three-tier path, the winery cannot legally ship product. For the most part, you’re shipping boutique wines unavailable at home, but since local wholesalers don’t profit from directly shipped wine, they can block the sale using the existing laws.

In 2000, when unrelenting wine lovers in Georgia had the ban partially lifted, lawmakers put an interesting spin on the buying opportunity. Consumers are now allowed to purchase five cases of wine, provided the wine does not have wholesaler representation in the state. This solves the consumer issue of buying from small boutique wineries, but not getting your hands on the limited release, small production wines from larger wineries already selling in Georgia. Georgians are still outta luck.

Retailers in both Georgia and Florida have definite concerns about the interstate shipment issue. Walter Eisenberg, owner of Pearson’s Liquors in Atlanta, says he strongly feels the restrictive laws, even the five-case version, are a violation of consumers’ rights. James Mela, owner of Vintage Wine Cellars in Tampa, Fla. — a state where anti-competitive lawsuits are pending — finds the limitations extremely unfair to the consumer, but also wonders what will happen to the Florida wine industry once the three-tier system is bypassed. He worries consumers will forgo his store to purchase the higher-end, allocated wines over the Internet.

But will they? In theory, if the shipping restrictions are lifted, consumers could essentially sidestep the retailer to purchase wine. But even where there is an open wine playing field, retailers’ sales don’t seem to be affected. In California, where consumers buy wine without restrictions, retailers thrive. The outlets compete on selection and price, but consumers still reserve the right to purchase online. In Georgia, Eisenberg hasn’t notice a big difference in business since the laws changed in 2000.

So perhaps there is life for the retailer after the restrictions are rescinded. There’s only one large organization preventing laws from being lifted in other states where litigation is raging: the Wine and Spirits Wholesalers of America (WSWA). Next week, their side of the story.

Taylor Eason is a regionally based wino who studied the juice in France and Italy. Comments? E-mail corkscrew at creativeloafing.com.??