Court Keeps Ban on Direct Sale of Wine in New York State


In what wine lovers and foodies are decrying as a great blow to life, liberty, and the pursuit of drink, today an appeals court judge has upheld New York laws that prohibit consumers from buying wine directly from retailers located out-of-state.

Two New York residents, Joshua Block and Sharon Silber, apparently love a particular wine shop in Indianapolis — Arnold’s Wines — so very much that they were willing wage a two-year lawsuit to enable them to buy it from there. (Apparently, wines in Indianopolis are better than those in New York. Who knew?)

For wine lovers, the ruling means that consumers are being deprived of the choice to buy wine from their retailer of preference.

If your local retailer charges $25 for a bottle of wine that you like, and a California retailer sells it for $15, the 2nd Circuit court says you have to buy it from the New York retailer at the higher price, wine blogger Lisa Carley explains.

As in many states, New York’s wine laws were enacted shortly after the repeal of prohibition in 1933. The law put alcoholic beverages in a special category, and interstate commerce for alcoholic beverage is far more strictly regulated than it is for other products. Under normal circumstances, states aren’t allowed to enact laws that discriminate against so-called “out-of-state economic interests,” but the Supreme Court has said states have complete control over how they regulate alcohol.

New York has a three-tiered system for wine: suppliers, who are either manufacturers or importers, sell to wholesalers, who in turn sell to retailers. Even within New York State, a wine manufacturer is not allowed to sell wine directly to a consumer. This is, of course, for tax purposes — every middleman supplies a revenue stream to the state — but the system was also put in place to stop liquor mafias and organized crime. This was from a time, as Southern District Judge Richard Holwell noted in today’s decision, when alchohol was largely viewed as an “immoral product” that “generated corruption and crime:” In 1941, Justice Jackson wrote, in Duckworth v. Arkansas, that “the people of the United States knew that liquor is lawlessness unto itself.”