talbotlucas.org: a word to the wise is sufficient

Today is a red letter day here at talbotlucas.org, for it’s the 70th anniversary of the ratification of the 21st Amendment, which served primarily to repeal the 18th Amendment and bring an end to the Prohibition era. The 21st Amendment was ratified—amazingly quickly—in 1933, but the effects of that quick ratification and lack of deliberation live on today in the battles being waged to overturn state restriction on direct shipment of wine to individual consumers.

One of the primary motivations for the original Constitutional Convention was to provide a governmental framework that would prevent economic Balkanization and ensure the free flow of interstate commerce. The development of e-commerce has made the economic boundaries between states even more transparent, and the Web provides an ideal means for small wineries to make their products available to any adult consumer. Obstructing the free flow of wine are many state laws that strictly limit the importation of alcoholic beverages (including wine) to a three-tier system established decades ago.

Some people believe the 21st Amendment is an exception to the Commerce Clause, and is the one area in which the states have full regulatory power. They argue that states have to restrict direct shipping in order to protect minors and tax revenue. Other people—myself included—don’t believe that the 21st Amendment trumps the Commerce Clause, but instead believe that the interpretation of the two provisions should be harmonized to maintain the free flow of interstate commerce while giving states leeway to address the core concerns of the Amendment. Personally, I think the fear that the Web will present a "virtual vending machine" of alcohol to minors is not only incorrect, but amazingly blind to the problems states currently face in this area with retail establishments which sell to minors and to the fake ID industry that assists minors in their efforts to obtain alcoholic beverages illegally. I think many of the proponents of direct shipping bans are trying to protect their livelihoods, and if they really wanted to "protect the kids" they'd work to toughen the penalties for those who sell alcohol to minors. But I digress, a bit...

My description of the debate is only the tip of the iceberg, and I’m writing at length on this subject as part of my research requirement at the law school. Although it was already a subject of great interest to me at the start of my project, my interest has grown now that I’ve learned more about the legal, political, social, and moral elements of the topic. All those angles make it a richly textured problem, but I don’t think it’s an unsolvable problem, and I plan to throw my hat into the ring of debate shortly when I submit my Comment—and suggestions for problem-solving—for review.

If any of this is of immediate interest, I recommend the following for more information on my perspective:

Free the Grapes! provides links, industry information, and updates specifically on the "wine wars" cases.

The Coalition for Free Trade also provides an overview of litigation (completed and ongoing) in this matter. Many cases have been successfully litigated by the Institute for Justice, a libertarian organization which is not only fighting restrictions on the direct shipment of wine to consumer, but other issues like the sale of caskets.

For overviews with a business perspective, the Wine Spectator has devoted significant space to the issue, and the Wine Institute has loads of information and links about this issue and others related to the wine industry.

The Goldwater Institute sets out many of the issues in a short, readable report recently issued to coincide with the challenge to Arizona’s direct shipping statute.

And lastly, for fun (or what fits my definition of fun reading these days), a guide to wine labeling. Interesting to see how regulated those few square inches really are.

I’ll raise a (small) glass tonight to mark the occasion, but for now...back to the books. My Business Associations final is on Monday morning; my knowledge of Federal Income Taxation gets tested on Tuesday morning; and on Wednesday, my morning will be spent showing what I’ve learned about Financial Analysis over the semester.

Cheers!