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WineDirect Blog

Your Source for All Things DTC

June 17, 2016 | Matthew Mann

DTC: Pennsylvania Finally Listens

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If the Commonwealth of Pennsylvania can pass direct-to-consumer (DTC) wine shipping, any state can. 

Listen up, Alabama, Mississippi, Utah …..

If the Commonwealth of Pennsylvania can pass direct-to-consumer (DTC) wine shipping, any state can.  In the over 10 years since the Granholm decision kick-started the movement opening states to DTC wine shipments, a more tortured path to final passage of legislation granting the citizens of a state the fundamental right to order a legal product across state borders can’t be imagined.

A broad coalition of disparate players, politics and circumstances created a legislative atmosphere so Byzantine and treacherous that even an issue so seemingly innocuous as permitting law-abiding adults to purchase fine wines from law-abiding businesses in an open market was impossible to pass and become law.  Oft-times it was party politics driving the divide and resulting in the failure of each proposed bill, with the Legislature under the control of one party, and the Executive office under the control of the other.  At other times it was the vagaries of lawmaking strategy that was the culprit, linking passage of any DTC bill to the overall privatization of the Commonwealth’s alcoholic beverage distribution system, thereby bringing into the play every trope and canard by DTC opponents from access of wine to minors to reduced state revenue from lost profits from the sale of alcohol to state employee union group’s desire to maintain the security, benefits and protected status of the multitude of union members employed by the state in the distribution chain.

As this stalemate dragged on over the years, Pennsylvania’s coffers profited.  More importantly, however, the Commonwealth’s wine-consuming residents suffered, held captive to the dictates of a distribution system where selection and price were absolutely controlled by the whims of a select few state buyers, rather than the open selection and price competition of the marketplace.  While quite sincere in their goals to improve a bureaucracy-limited system to increase selection and access by the public, periodic attempts to reform the state-run procurement and distribution model resulted in failed efforts to be more “consumer-friendly”.  They invariably suffered the fate of all marketing reforms not tied to a responsive market and consumer-driven desires, failing to provide either greater choice or lower prices.  Remember the kiosk plan designed for grocery stores?

In the end, it took the persistence and rationale of a growing number of legislators, no doubt hounded by their constituencies and influenced by the reasoned arguments of key wine industry trade organizations such as the Wine Institute and Free the Grapes!, to ultimately accept and understand that the only effective way to achieve its goals of responsiveness to the ever-changing and demanding market was to let the consumer have true access to the supply, unhindered by a state-apparatus borne of the economic and technological environment of the 1930’s.

The decision by Pennsylvania to let loose the efficiencies of the market, the availability of information of the internet, and to rely on an adult buying public sophisticated enough to responsibly purchase wine is long overdue and very welcome.  Wine consumers and the hard-to-find boutique wines they desire, neither of which the state-controlled distribution system could possibly accommodate, can now find each other, to the mutual benefit of not only the winery and consumer, but of the Commonwealth itself by reducing bureaucratic overhead and maintaining tax revenue and accountability.

Are you listening, Oklahoma, Delaware, Rhode Island, Kentucky …..

Looking for details on what Pennsylvania’s changes mean for you? Check out this great piece on the ShipCompliant blog.  A Keystone Change – Pennsylvania to Allow Direct to Consumer Sales of Wine

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