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Put that wine bottle down and slowly back away

Don’t buy wine over the Internet, kids. The State of Texas says so.

State officials have teamed up with FedEx, UPS and other shippers to ferret out wines being sent to Texas by websites that don’t have proper permits.

That has prompted Wine.com and several other resellers to restrict sales to consumers in the Lone Star State.

Wine.com has 30,000 active customers statewide, CEO Rich Bergsund told the American-Statesman on Thursday. Those customers were notified via email this month that the company had halted shipments of wine to Texas.

Other sites not currently shipping wine to Texas include TheWineBuyer.com, WineBid.com, WineExpress.com and WineLibrary.com.

A law blocking the deliveries isn’t new, but the Texas Alcoholic Beverage Commission has ratcheted up enforcement efforts this year.

“Anybody who is going to sell to Texans has to have a permit,” TABC spokeswoman Carolyn Beck said.

And, right now, Beck said, there’s no law enabling out-of-state resellers to obtain permits allowing them to sell wine here. “They haven’t been authorized by the Legislature,” she said.

Nasty little conundrum there, isn’t it? You need to get a permit to sell wine in Texas, but there’s no law that allows an out-of-state retailer to get such a permit. Thus are crackdowns like this born. There is one potential workaround for businesses like Wine.com, but it’s at best a partial solution:

In its message to customers, Wine.com indicated it was working to set up a warehouse in Houston in hopes of securing a state permit. A lease could be signed soon, Bergsund said.

“We are hoping the state government will see this as a win-win,” the company wrote in its email, “because we will bring valuable jobs into Texas, but there are no guarantees.”

A question-and-answer section on Wine.com indicates the company has used a similar approach in other states with similar restrictions.

“We’ve opened a network of Wine.com warehouses in a number of states, giving us a local presence in those states. This enables us to legally ship wine to our customers in those states while also reducing the shipping time to get you your wine. Unfortunately, in some states not even that will suffice, so keep those letters and emails flowing to your state legislators!”

Beck said Wine.com would only be able to ship to residents of Houston, Harris County and areas within a two-mile radius of Houston’s city limits if its proposed warehouse materializes.

Given that Texas wineries can sell and ship to any customers within Texas, one presumes that Wine.com would either have to open a storefront or start growing grapes here to qualify.

Unlike many industries, online wine sales are a minimal share of the total – about one percent, according to the story, though the potential for growth is there. It’s never going to be a dominant force, but that’s not stopping state regulators here and elsewhere from intervening. It’s hard to see this as anything but an anti-competitive move, one that like the byzantine restrictions we have on selling beer in this state will do nothing for the consumers. From my perspective, as long as the Internet retailers pay the same taxes as the brick and mortar folks, it’s all good. And speaking of such things, let me give the last word to the Austin Contrarian, from whom I saw this story:

Thankfully, Texas booksellers didn’t have the political clout wielded by wine merchants and wholesalers when Amazon was getting off the ground back in the 1990s, else the State would have banned buying books off the internet, too.

Good thing there isn’t a state agency equivalent to the TABC for books.

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3 Comments

  1. […] all would be better served by getting rid of the byzantine regulatory structure around the beer and wine industries. Matt Yglesias has often written that unaccountable local regulations and licensing […]

  2. […] the State of Texas does not want you to buy wine over the Internet. The state is cracking down on retailers who send […]

  3. […] to be shipped to Texas?” And the answer is…I’m not sure. Last year, the TABC cracked down on out of state resellers who were shipping to Texas without a state sales tax permit. The TABC addresses the question of […]

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