Wine Without Borders

The Consequences of Self Interest

October 23, 2007 – 7:12 am

Both Thomas Hobbes and John Locke, philosophers inspired by England’s Glorious Revolution and both central to the liberal philosophical foundation of the American political mind since the mid 18th century, observed that at the heart of man’s political motivation lies self interest. Virtue can be found in our hearts, but it’s self interest that rules the day.

In today’s politics such an observation probably wouldn’t be contested. But it is worth reminding those concerned with the politics of wine shipping.

When looked at from this perspective, it is not hard to understand how seemingly allied groups would actually end up on the opposite side of direct shipping battles. Illinois and the process that led to the passage of HB 429 is a good example.

Set to take effect on June 1, 2008, HB 420 will create a permit system whereby out-of-state wineries may obtain the permit and ship up to two cases per month to Illinoisans. The law allows wineries in and out of Illinois that produce less than 30,000 gallons of wine annually to ship up to 5000 gallons worth of wine directly to retailers and restaurants, going around the distributor who is the state-mandated supplier for these types of businesses.

The law also prohibits Illinoisans from having wine shipped to them from out-of-state retailers, a right Illinoisans had enjoyed for 15 years prior to the passage of this law.

Why didn’t wineries, who are consumer facing and serving just like retailers and who are, like retailers, strong supporters of direct-to-consumer shipping, oppose a law that prohibited their best customers—retailers—from  shipping wine to Illinoisans?

It seems intuitively correct that the more wine retailers can sell, no matter how it is sold, leaves room for the retailers to purchase more wine from the wineries. Yet, wineries in California and most in Illinois supported the passage of the law that stuck down retailers’ rights to ship into Illinois.

 Self Interest.

They got what they needed in the form of a direct shipment permit and the ability, albeit a very insubstantial ability, to sell and ship wine directly to retailers and restaurants in Illinois.  However, following the line of self interest does not always get you where you want to be via the shortest distance. Consequences often result that put roadblocks in the path toward profit.

It’s not inconceivable that the consumers who have supported wineries in their efforts to open direct shipping markets over the years will see that now they support laws that hamper access to wine. It’s not inconceivable either that retailers will also take note of this defection from what appears to be a natural alliance with retailers.