Washington, D.C.-Advocates for and against opening New York’s wine market—the second largest in the nation—appeared in federal court today in Manhattan in a spirited two-hour oral argument.
Three lawyers representing the wholesalers and the State of New York defended the law. One of the wholesalers’ lawyers went so far as to state that if New York consumers were given the freedom to purchase wine over the Internet—a freedom now enjoyed in one form or another by citizens of 37 states—”rat poison” would end up in wine bottles and that there would be Internet liquor distribution in middle schools.
The Institute for Justice represented wineries from Virginia and California as well as wine consumers from New York seeking to knock down the State’s law banning the direct shipment of wine from out-of-state wineries to consumers within the Empire State.
Clint Bolick, the Institute for Justice’s lead attorney on the case, said, “There are 37 states that allow the direct shipping of wine either from any state or from states with reciprocal shipping agreements. There has not been a single reported instance of underage drinking resulting from direct shipping except for state-sponsored sting operations. By contrast, there are approximately 3,000 complaints of underage alcohol purchasing in New York each year. The direct-shipment ban is not about temperance; it is about preserving the wholesalers’ monopoly.” New York does not ban in-state wineries from shipping directly to New York consumers.
Steve Simpson, an attorney and senior fellow in constitutional studies with the Institute for Justice, said, “New York consumers are hurt in three ways by the State’s ban. First, the amount of information consumers receive about out-of-state wines is limited by the State’s restriction on Internet speech. Second, their choice of wines is limited to only those that the wholesalers’ cartel will carry. And finally, consumers must pay anywhere from 18 percent to 25 percent more per bottle because of the wholesalers’ mark-ups. New Yorkers deserve the kind of freedom citizens in 37 other states enjoy.”
Bolick concluded, “We hope for a landmark ruling that could open up the free market for wine distribution across the country.”
U.S. District Court Judge Richard Berman, who presided over the case, said that he would rule as soon as he could. The hearing follows two recent victories in North Carolina and Virginia where federal courts declared bans on direct shipments of wine across state lines to be unconstitutional.