Editor’s Note: The Press of Atlantic City wrote an editorial August 1, 2019 that captured the main arguments in favor of expanding consumer choice in wine. You can view the whole article using this link, or read the text below.
Several years ago we urged New Jersey to allow residents to buy directly and get shipments from wineries, as 44 other states do.
There is still time for state officials to quit depriving consumers of this benefit, but they’d better hurry. A recent U.S. Supreme Court decision has made it clear the judiciary will act if New Jersey’s leaders won’t.
The court affirmed the ability of out-of-state wine retailers to ship to consumers, striking down a Tennessee law that imposed a residency requirement for retail sales of liquor. Last month, three New Jersey residents and a New York liquor store followed that up with a civil suit using similar arguments against New Jersey’s ban.
A previous federal lawsuit that dragged out for nine years pushed legislators and then-Gov. Chris Christie to open a crack in the ban in 2012. As part of its settlement, they enacted a law allowing shipments from wineries producing fewer than 250,000 gallons a year.
That limit meant New Jersey consumers still couldn’t buy 90 percent of U.S.-made wines — and the wineries they could buy from accounted for less than 5 percent of wine consumed. That’s essentially still an outright ban, and only one other state — Ohio — sets such a “capacity cap.”
The 2012 law also discouraged eligible wineries from participating, It required them to obtain a newly created Out of State Winery License from New Jersey, post a bond of up to triple the tax on its highest two-month wine sales, file two detailed bimonthly reports and keep a complete list of purchasers for at least three years.
States got the authority to make their own rules on alcohol sales when Prohibition was repealed in 1933. Many restricted sales to protect in-state businesses, but with the explosion in the number of vineyards and the rise of wine-country tourism, people pressed for the right to start buying wine directly.
In 2005, the U.S. Supreme Court ruled unconstitutional laws in New York and Michigan banning direct shipments to consumers from out-of-state wineries.
The Eagleton Center at Rutgers, in a 2015 study commissioned by the Wine Institute, found that allowing all wineries to ship to New Jersey consumers would yield the state an additional $4 million a year in taxes and fees. A bipartisan bill in the state Legislature to do so would require that the wineries buy a license for up to $7,500 a year.(Editor’s note: the annual winery permit fee would be $938, not $7,500.)
Another $4 million a year would be small change compared to the $30 billion-plus revenue the state already gathers each year. So far, legislators have listened to the strong opposition from the New Jersey Liquor Store Alliance.
State leaders should give consumers access to the full wine market (and take credit for it) instead of wasting taxpayers’ money trying to fight and delay court-ordered access.