Wine Without Borders

Discriminating Against Imported Wines

April 23, 2008 – 10:05 am

It should be clear to all those that think about the impact of the various state laws meant to discriminate against retailer wine shipping that on another level these laws disproportionately hurt imported brands.

In a number of states consumers may have wine shipped to them from American wineries across the country, but they are prohibited from purchasing wine from retailers across the country. This leaves wine lovers with an extremely limited choice in the area of imported wines. They are able to purchase only those imported wines that wholesalers in their respective states choose to carry and sell to brick and mortar retailers.

Those anti-consumer states include: WA, ID, AZ, CO, KS, MN, IA, WI, MI, IN, KY, GA, FL, SC, NC PA, NY, VT, CT, RI and soon IL.

While the number of domestic wineries has increased significantly over the past 20 years, so too have the number of wine brands imported into America. As well as the traditional wine exporting nations of France, Italy, Spain and Germany, today thousands of brands arrive on American shores from Australia, New Zealand, South Africa, Austria, Hungary, Chile, Argentina, Canada and other counties. While thousands of brands are imported into America, discriminatory state laws concerning retailer-to-consumer shipping assure that consumers only have access to a tiny percent of the wines available.

The reason for this kind of discrimination is well established: wine wholesalers have purchased legislative protection against competition.

It should be noted that this kind of discrimination against imported wines might indeed violate American treaties. Consider the principle of “National Treatment” embodied in the World Trade Organization:

“National treatment: Treating foreigners and locals equally
Imported and locally-produced goods should be treated equally — at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents. This principle of “national treatment” (giving others the same treatment as one’s own nationals) is also found in all the three main WTO agreements (Article 3 of GATT, Article 17 of GATS and Article 3 of TRIPS), although once again the principle is handled slightly differently in each of these.” (Click Here For More Info on WTO Trading Principles)

In those cases where states allow their in-state wine retailers to ship to residents but prohibit out of state retailers from shipping there is a clear violation of the U.S. Constitution’s Commerce Clause.  However, It may also be that not only in these blatantly discriminatory cases but also in those cases where only American wineries are allowed to ship into the state that there are violations of international treaties.