Editor's Blog Retailer Shipping: Don't place your order yet
Posted by: Joel Goldberg in Untagged on
Oct 03, 2008
Judge Denise Page Hood's ruling in the wine retailer shipping case sends welcome news to Michigan's beleaguered consumers. Following the logic of the U.S. Supreme Court's 2005 Granholm decision, she ruled that Michigan must treat in-state and out-of-state retailers equally. If the former can legally ship wine to Michigan residents, we need to let the latter do likewise.
You don't need to be a hard-core wine geek to recognize two facts: (1) Michigan's wine selection pales next to that of many other good-sized states. (2) Our wine prices are among the highest in the country.
If Judge Hood's decision stands, it could help make more wines available here, and level the price premium Michigan consumers currently pay.
But don't place your orders with those California or New York retailers quite yet.
The well-funded defendants (most of whom pay their legal bills with our tax dollars) are nearly certain to appeal to the U.S. Circuit Court, and possibly on to the U.S. Supreme Court. The shortest (and most likely) scenario -- in which the Circuit Court affirms Judge Hood's decision and the Supreme Court refuses to take the case -- still entails two more years of legal wrangling.
If we look at the aftermath of the Granholm decision, the follow-up to a consumer court victory will be a political donnybrook in the Michigan legislature, as the state's powerful Wholesalers -- one of the defendants in the case -- lobby to ban all retailer shipping -- both in-state and out-of-state -- rather than give up any chunk of their lucrative monopoly. It's not yet clear where Michigan's retailers will come down, or if they'll split ranks based on how much shipping they do themselves.
Finally, even if favorable legislation ultimately passes, the state's LCC -- another defendant -- is sure to drag its heels for many months devising the regulations and forms that permit out-of-state retailers to ship to Michigan.
My best estimate: even if things go as smoothly as possible, no out-of-state retailer will ship a single bottle of wine legally to any Michigan resident before the end of 2011.
So if you're thinking about placing that order, you may want to make it for some 2008 Bordeaux futures.
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Good post
As it stands now, according to the Judge's order Michigan residents may buy from out of state retailers. The question is whether or not the Judge would stay her order in the event that there is an appeal.
Also, I can't imagine Michigan wine retailers actually wanting to give up their right to deliver wine to Michigan residents. Would they really want to cut off their nose despite their face?
Bottom line: Big wine for consumers!
What's the post-ruling status?
"The State of Michigan may continue to collect any tax due on the sale of the wine and may continue to require licenses and permits for direct interstate sales and deliveries, so long as these provisions do not discriminate against out-of-state wine retailers."
I'm not an attorney. But the way I read this, none of the out-of-staters currently has the license required to collect Michigan sales taxes. And Michigan can also pull a delaying act until it figures out how to license retailers in a non-discriminatory manner. So I'll stick to my opinion: shipping isn't going to happen soon. But I'll also check with some attorneys for their interpretation.
On Tom's last point, I can easily imagine most Michigan retailers being more concerned about an invasion of out-of-state shippers -- and incurring the ill will of Michigan's powerful wholesalers on whom they depend for inventory -- than they are about losing their small-to-nonexistent shipping operations. Again, though, I plan to check.
[For those who may not know, Tom is Exec Director of the Specialty Wine Retailers of America -- http://specialtywineretailers.org -- who clearly have a horse in this race -- and also writes a great wine blog, Fermentation: http://fermentation.typepad.com].
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Yes, thank you, I believe I WILL try some Michigan Cabernet Franc next to that '86 Cheval Blanc
