Big retail and interstate shipping
A good article on Costco and direct shipping.
The logic of the argument against direct shipping (as summarized in the article) boggles my mind.
"Costco says that under the court's ruling, it too should be allowed to buy directly. The state argues that the Supreme Court's ruling isn't applicable because it didn't deal with the enormous quantities at issue in the Washington case.
If Costco and other retailers are allowed to buy wine and beer from out-of-state wineries and breweries, Hankins suggested, then convenience stores would be able to order deeply discounted fortified wines and beers from shady establishments in other states. The distribution system in Washington helps track what alcohol is coming into the state, he argued."
I don't buy any of this. Not for a second. Let's see, what are the arguments here.
1. Alcohol is dangerous and needs central control - (what about the children?!)
2. Costco is different because it's big.
3. Inexpensive wine, beer and liquor are a terrible thing.
4. Those alcohol people rub me the wrong way.
There are plenty of other industries that ship legal but controlled substances between states that don't require mandatory government- approved middlemen. How exactly is it that the distributors are checking IDs? They aren't. The distributor system has nothing to do with keeping alcohol from minors.
And frankly, just because someone is selling fortified plonk doesn't mean they are "shady." Petty insults do not buttress Mr. Hankins' flimsy arguments.
Mr. Hankins insists it is the volume of wine that Costco ships that is the real problem. Still, Mr. Hankins insists it is the volume of wine that Costco ships that is the real problem. Really?
Of course, the white elephant in the room is tax collection. This is an effective angle the distributor lobby uses with state governments. Along with the arguments of MADD and various religious groups, you will see the tax collection argument spring up again and again, and it's not there as an afterthought or by mistake. (The Supreme Court didn't buy the idea that tax/policing would be impossible though.)
The funny thing is that the state governments are more likely to get the full amount of tax out of a big player like Costco than they are thousands of tiny operations, simply because Costco is big and hard to miss. Bigger operations are also going to be easier to police and track because their supply chains have to be so organized, etc. (On the flip side of the tax argument, I wonder if all the mandatory markups of the middlemen have the effect of increasing the base price of a bottle, and therefore might increase the amount of tax in some state codes?) The distributors and the states they've successfully lobbied can't go after the small operations, because the Supreme Court ruling was clearly about small wineries. Plus, it's the big retail outfits that will really hurt the distributors. They don't care a hoot about some Mom 'n Pop shipping a case or two here and there. Imagine Wal-Mart (or Sam's Club, which does sell alcohol) wading into this fight. That's the real reason that being big is different.
The logic of the argument against direct shipping (as summarized in the article) boggles my mind.
"Costco says that under the court's ruling, it too should be allowed to buy directly. The state argues that the Supreme Court's ruling isn't applicable because it didn't deal with the enormous quantities at issue in the Washington case.
If Costco and other retailers are allowed to buy wine and beer from out-of-state wineries and breweries, Hankins suggested, then convenience stores would be able to order deeply discounted fortified wines and beers from shady establishments in other states. The distribution system in Washington helps track what alcohol is coming into the state, he argued."
I don't buy any of this. Not for a second. Let's see, what are the arguments here.
1. Alcohol is dangerous and needs central control - (what about the children?!)
2. Costco is different because it's big.
3. Inexpensive wine, beer and liquor are a terrible thing.
4. Those alcohol people rub me the wrong way.
There are plenty of other industries that ship legal but controlled substances between states that don't require mandatory government- approved middlemen. How exactly is it that the distributors are checking IDs? They aren't. The distributor system has nothing to do with keeping alcohol from minors.
And frankly, just because someone is selling fortified plonk doesn't mean they are "shady." Petty insults do not buttress Mr. Hankins' flimsy arguments.
Mr. Hankins insists it is the volume of wine that Costco ships that is the real problem. Still, Mr. Hankins insists it is the volume of wine that Costco ships that is the real problem. Really?
Of course, the white elephant in the room is tax collection. This is an effective angle the distributor lobby uses with state governments. Along with the arguments of MADD and various religious groups, you will see the tax collection argument spring up again and again, and it's not there as an afterthought or by mistake. (The Supreme Court didn't buy the idea that tax/policing would be impossible though.)
The funny thing is that the state governments are more likely to get the full amount of tax out of a big player like Costco than they are thousands of tiny operations, simply because Costco is big and hard to miss. Bigger operations are also going to be easier to police and track because their supply chains have to be so organized, etc. (On the flip side of the tax argument, I wonder if all the mandatory markups of the middlemen have the effect of increasing the base price of a bottle, and therefore might increase the amount of tax in some state codes?) The distributors and the states they've successfully lobbied can't go after the small operations, because the Supreme Court ruling was clearly about small wineries. Plus, it's the big retail outfits that will really hurt the distributors. They don't care a hoot about some Mom 'n Pop shipping a case or two here and there. Imagine Wal-Mart (or Sam's Club, which does sell alcohol) wading into this fight. That's the real reason that being big is different.
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