Supreme Court Considers Internet Alcohol Sales

The US Supreme Court is expected to hear arguments this December concerning the future of laws in Michigan and New York banning out-of-state vineyards from selling directly to customers. Thirty-six states joined Michigan earlier this year in asking the nation's highest court to reaffirm a state's right to regulate the sale and distribution of alcohol. With the popularity of e-commerce, online alcohol sales greatly expanded direct sales to consumers-which had previously been limited to phone and mail orders. Rapid growth in the size of the direct-sale market raised a variety of concerns, from the loss of state excise tax revenue to potential access for underage youth.

An unusual coalition of alcohol wholesalers, state attorneys general, and prevention specialists has come together to support the Supreme Court's review of the lower court decisions that overturned state bans on direct shipment. The vintners that originally challenged the state laws argued that prohibiting out-of-state direct sales unconstitutionally restrains interstate commerce. However, states that prohibit out-of-state sales directly to consumers claim that they are within their rights because the 21 st Amendment to the Constitution allows them to regulate the sale of alcohol within their borders.

As part of its campaign for Supreme Court consideration of direct sales, the Wine and Spirits Wholesalers of America (WSWA) commissioned an opinion poll (.pdf) that found overwhelming public opposition to Internet sales. WSWA argues that requiring wine to be sold through distributors and retailers helps prevent sales to minors and aids tax enforcement. Prevention specialists have raised alarms about the ease with which some underage consumers have acquired alcohol, including spirits as well as wine, through direct sales deliveries.