The US Supreme Court handed down a major opinion yesterday in a historic ruling that could allow brewers to skip middle-tier distribution networks across the country by allowing retailers to ship across state lines directly to consumers.
By a surprisingly large 7-2 majority the Court affirmed a lower court in striking down a Tennessee law that required anyone seeking a liquor license to be a resident of the state for two years.
More importantly, the ruling included all alcohol beverages. The decision basically allows a retailer to ship beer, wine and spirits across state lines into any state that allows in-state alcohol suppliers to ship directly to the consumer. This opens the doors for disruptors such as Amazon/Whole Foods and creative online business model concepts to skip the consolidating middle tier wholesalers and deliver alcohol directly to consumers.
“We interpret this as the best possible scenario for us,” Daniel Posner, president of the National Association of Wine Retailers (NAWR), told Wine-Searcher in an online article today. “This ruling says Granholm applies to retailers. This means that every state that allows in-state wine retailers and auction houses and wine clubs to ship to consumers in their home state, but does not allow out-of-state retailers to ship, is now in violation of the Supreme Court decision.”
It is important to note that states do not have to allow out-of-state retailers to ship alcohol to consumers, but they must treat in-state and out-of-state stores the same. This may set up a new round of state legislative battles in those states that allow in-state shipment and wholesalers move to change the law to prohibit in-state direct sales.