By Gerd Hirschmann
posted
Jul 18, 2012
Understanding how wine gets from the vine into the glass is
fairly complicated. Federal regulations stemming from the
prohibition created a complex process that differs from state to
state. At the federal level there is the Tobacco Tax and Trade
Bureau (TTB) of the Department of Treasury enforcing laws in
alcohol production, labeling, advertising and tax collection, and
the ATF (Bureau of Alcohol, Tobacco, Firearms and Explosives of the
Department of Justice) makes sure that laws are enforced preventing
illegal production and smuggling of alcohol.
In addition, every state and most counties, cities, towns, or
other local jurisdictions have alcohol beverage control departments
that oversee and enforce further state and local laws relating to
wine, with each state having their own jurisdiction and different
set of laws governing the distribution of alcoholic beverages,
which are most often divided in two groups: wine or beer and
spirits or liquor.
Federally the wine industry is structured as a three-tier
system: Producers and suppliers, which basically means the wineries
and importers; distributors or wholesalers, which buy from the
first tier and sell to the third tier, the retailers and
restaurants that sell for individual consumption. Sounds
complicated? Well, it kind of is.
This system is supposedly designed to protect the general
public, which is assumed to know little about alcohol and its
effects, from an industry, which would be only concerned with
maximizing profits and thus promoting overindulgence of alcohol.
Creating three levels of distribution with each level needing to
make its own profit is supposed to keep prices from becoming too
low. This gives the government different means of oversight and tax
revenues.
It gets even more complicated on the state level as several
states go beyond regulating and licensing sales and actually take
over the distribution or retail tier. There are 18 so-called
'control states' (and two counties in Maryland) that take direct
control over alcohol sales:
Pennsylvania and Utah run all distribution and off-premise
retail of wine directly through the state. New Hampshire and the
two Maryland counties (Montgomery and Worcester) control the
distribution of wine and operate government-owned retail stores,
but also allow some licensed private owners. Mississippi and
Wyoming control wine distribution but leave retailing to privately
owned stores. Alabama, Idaho, Iowa, Maine, Michigan, Montana, North
Carolina, Ohio, Oregon, Vermont, Virginia, Washington, and West
Virginia only control distribution and retail sales for spirits
(which includes wines over a certain alcohol percentage: 15% in
Alabama, 16% in Vermont and Montana, 17% in Iowa), but leave wine
distribution and retail in private hands in accordance to the
federal three-tier system.
So far so easy, it gets trickier when crossing state borders,
which is technically illegal other than for private consumption on
a small level. A Supreme Court ruling a few years ago ruled that
states cannot set a different standard for products of other states
than they do for their own, which is aimed at direct sales and
shipments from wineries to private consumers in another state. This
divides states into two groups, those that allow all US wineries to
ship wines directly to its residents and those that make any
shipment of wine illegal.
Unfortunately these complicated rules often make it hard for the
individual wine lover to find wines from small wineries that find
it too expensive to sell in every state.
Tagged:
regulations, Wine
