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Home > Blogs > Uncorked > Archives > 2005 > November > 02 > Entry
Currying Favor with the Prohibitionists
The following analysis and history on Ohio’s wine shipping issue comes from David Schildknecht of Mason, OH-based Vintner Select, a wine importing and distributing company. One comment from your “Uncorked” author: David mentions a piece of draconian legislation that has been introduced (not passed, just proposed) that would, in David’s words, ban any wine shipment “from any sales transacted by computer, mail, or telephone.” Considering the impact such a law would have on…
… Ohio’s wine industry — its wineries, grape growers, wine shop owners, etc. in every legislative district in the state — it’s difficult to imagine such a bill would gain enough votes to become law — especially with the powerful speaker of the House predicting the Legislature will go in the opposite direction, toward a less restrictive shipping system. In fact, it smells of grandstanding by some legislator who knew full well when he or she proposed the bill that it had zero chance of passing, but who wanted to curry favor with his Prohibitionist constituents. But thanks to David for making sure we can keep an eye on such proposals to ensure nothing “sneaks through” when we’re not paying attention. Anyway, here’s David’s take on the current state of wine shipping in (and to) Ohio, and on restaurant wine-list prices in Ohio:
“I realize that the State of Ohio (in which I nowadays reside as does the import-distribution business for which I work) is often cited for being consumer-unfriendly on account of policies such as mandatory minimum mark-ups. But misinformation abounds both within the State and without about Ohio regulations (including those governing pricing - but that is a topic for another day). And this general level of misinformation seems to prevail among wineries and consumers in other States as well.
For example (to address the question at the head of this thread), Ohio has traditionally been cited - and unwittingly treated as a “no-ship” zone - by out-of-state wineries. In fact, Ohio has for decades permitted shipping by private individuals. Way back in the early eighties when I began my retail wine career in Washington, DC, I was amazed to find that a group of wine enthusiasts in Ohio were the only ones among my customers to whom I could routinely consign loads of over-the-road freight, with the State of Ohio issuing an official authorization. Note that this Ohio law applies to shipments from retailers and not just wineries (whereas the Supreme Court Decision only relates to “producers”, i.e. wineries).
There were however three conditions for obtaining a permit as a consumer to ship wine into Ohio: 1) payment of the relevant tax; 2) a limit to the total gallonage per year; 3) certification that the wine was not available through an Ohio distributor. The gallonage limit did not amount to a serious impediment for those who - like my customers from back in the eighties - pooled these permissions. And it is not clear to me whether there was ever active scrutiny by the State to determine that the wine to be shipped was not already registered with a local wholesaler. In any event, what has changed in the wake of the Supreme Court’s recent decision regarding parity of shipping is that Ohio’s Division of Liquor Control has announced it will no longer enforce restrictions 2) and 3) [which, incidentally, correspond with Ohio Administrative Code Section 4301:1 Rule 23!] when issuing consumer shipping permits. (Incidentally, Fedex and UPS have now lifted any restrictions consumers may have experienced in trying to ship into Ohio.)
What comes next though is still anybody’s guess. The change in practice at Liquor Control is a sensible expedient but the Ohio Legislature - like that of other States - must ultimately determine how to change State law to conform with the Supreme Court’s recent decision. It is widely recognized that either an open door policy OR (sadly) a ban on all shipment of wine within the state in question will fulfill the conditions of parity set forth in that decision. Since Ohio has a significant wine industry of its own, one hopes our legislature will take the liberal approach which New York’s governor is advocating for that State. Then again, Michigan has a significant quality wine industry as well, which that State now appears intent on sacrificing in the name of liquor control and the supposed protection of minors. At present, Ohio legislation has been introduced that would take a different approach, by cutting off shipment from any sales transacted by computer, mail, or telephone! Local wineries have already raised the alarm that such a law would be just as much a death knell as would an outright ban on any shipments of wine within the State.
Permit me to end on a less depressing note and drive home the point that progressive as well as restrictive elements can be found amid our crazy-quilt of fifty-one (don’t forget DC!) different liquor control laws. I am pleased to point out to any who have not enjoyed the Ohio culinary scene that we have one of if not the least restrictive laws concerning dual (on- and off-premise) licenses, which aren’t even permitted in most states. In addition to the conveniences afforded by dual licenses, they have had the effect - through competition - of significantly driving down the price of wine in restaurants, indeed so much so that in many fine dining establishments, bottle prices are not significantly higher than retail prices, or occasionally represent minimum Ohio retail plus a fixed service charge. This situation is immediately evident to any of the many winery proprietors or representatives who visit Ohio in my company and quickly becomes a topic of astonished conversation.”
So there you have it, courtesy of Mr. Schildknecht.
Cheers!
Mark Fisher
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Comments
By Bob
November 3, 2005 1:12 PM | Link to this
I would like to thank David for posting this good information. It is probably too much to hope for, that the politicians would figure out that the public really doesn’t need them to protect us from ourselves. For any shipments that a reasonable individual buyer might make, it costs the state more to collect the tax than the tax itself. Certainly the 3 tier system in Ohio provided a certain level of stability to the wine market but why do we need the state to do that for us? There isn’t a state enforced marketing system for other goods. There are many knowledgeable and creative people in the various tiers of the wine industry in this state. Imagine what interesting and affordable wines they could bring us if it were not for the state’s interference. We should all encourage our state officials to expend their efforts in keeping us safe by enforcing existing laws that require responsible usage and behavior and get out of commercial enterprises.
By jens
November 2, 2005 2:10 PM | Link to this
In my experience which is more limited than David’s most restaurants in Cincinnati charge 1.5 to 3 times retail pricing on their wine lists. I wish more restaurants priced at $10 over retail. I would buy more, expensive wines and maybe an extra bottle! Let’s hope that David’s assessment on the legislative front is accurate so that there is more open shipping. Of course, that does raise the topic of the fairness of the three tier system as it relates to in-state versus out-of-state wineries. Further, should retailers be allowed to buy direct from out-of-state wineries? jens at cincinnati wine garage