The Supreme Court spoke to the thorny issue of state regulations on selling wine again this week. The decision announced Wednesday – although at first glance a seemingly local matter involving the right of non-residents to open wine stores in Tennessee – may signal a move toward greater choice for wine consumers throughout the U.S.
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At issue was a Tennessee law that forbids the state to issue a wine-and-liquor-sales license to anyone who has not been a resident of Tennessee for at least two years. A dispute arose when two parties, one very large and one very small – the giant national retailer Total Wine, which operates nearly 200 large wine shops in 23 states, and a couple from Utah, Doug and Mary Ketchum – filed applications for Tennessee liquor licenses.
The Tennessee Alcoholic Beverage Commission, which administers liquor licenses in the state, had no problem approving both applications. But when the Tennessee Wine and Spirits Retailers Association, a retailers’ trade association, found out about the applications, it objected, threatening to sue the TABC if it okayed the applications in spite of the restrictive law.
The Supreme Court. Only Justices Gorsuch and Roberts dissented in the 7-2 decision.
Seeking judicial guidance, the TABC asked the local federal district court and then the 6th Circuit U.S. Court of Appeals to rule whether the state’s “durational residency” requirement for liquor store operators was constitutional. When the appeals court struck down the Tennessee law, the retailers’ associaton jumped in, asking the Supreme Court to consider the case. Wednesday’s 7-2 ruling ended the debate. Tennessee’s durational residency law was dead.
That’s good news for the Ketchums and for Total Wine and its stockholders, of course, and to retailers large and small who’ve been barred from competition in Tennessee and states with similar rules. But why does it matter to everyday wine enthusiasts like us?
Michael Bindas, a senior attorney with the Institute for Justice, a non-profit law firm that represented the Ketchums through this long legal road, said in a news release, “Today’s ruling makes plain that all Americans have a right to earn an honest living and that government cannot deny someone that right simply because of where they live or used to live. No state may discriminate against out-of-staters or newcomers to protect established, in-state interests from competition. As the Court recognized, the Twenty-First Amendment is not a blank check, and the states’ power to regulate alcohol is not unlimited. Although states can impose reasonable regulations on alcohol to protect public health and safety, they cannot discriminate in order to protect favored economic interests.”
And this, in turn, matters because this case further plowed the ground that the Justices initially broke in the 2005 case Granholm v. Heald, which suggested that the 21st Amendment, which repealed Prohibition, does not flatly authorize states to pass laws that would otherwise violate the Dormant Commerce Clause. That fancy legal language, in this case, concluded that states can’t forbid wineries outside a state the right to ship wine into the state if that state allows in-state wineries to ship. Everyone has to be treated equally. This had the immediate effect of opening up direct wine shipping to consumers in most states of the U.S.
Now in nullifying Tennessee’s residency law the justices have also indicated that the same equal treatment laws apply to wine and liquor retailers as to wineries, an aspect that Granholm v. Heald had not addressed.
It will undoubtedly take more litigation to clear up all this, and the well-heeled lobbies for wine and liquor distributors who have fought long and hard to guard their monopoly aren’t going to surrender easily. But this is another step in the right direction, more significant than it might at first appear.
Briefly restated, economic freedom wins, and protectionism loses.
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If you’d like to know more about this ruling, W. Blake Gray has an outstanding overview and think piece on Wine-Searcher.com.
Here is The Institute for Justice’s statement about the case and the Ketchum family.
Finally, for a very deep dive, here’s the 57-page syllabus of the Supreme Court’s decision. Enjoy!
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You’ll often see us offering links to Wine-Searcher.com, for a very simple reason: Wine-Searcher.com is the place to go online if you want to find where to buy a particular wine that interests you. But as Wine-Searcher.com has evolved over the years, it has turned into so much more. It’s well worth a visit just to discover its many features, including its popular list of the world’s current ten best value wines!
Today’s Tasting Report
It’s almost July, so beginning Monday we’ll open a new Wine Focus on Gamay in our WineLovers Discussion Group. We’ll spend the month tasting and talking about Beaujolais and its designated villages, along with Gamay from other parts of the world. You’re welcome to come and post your Gamay reports! To get us started, here’s mine, an appealing Beaujolais from the always reliable importer Kermit Lynch.
Anna Asmaquer 2016 Domaine de la Prébrende Beaujolais Vielles Vignes ($17.99)
This clear reddish-purple wine from Gamay Noir grapes starts with a burst of ripe strawberry fruit aromas, still exuberant and youthful at three years old. The flavor is fresh and bright, with plenty of mouth-filling red-berry fruit. It seems simple at first, but cleansing acidity and soft tannins provide structure with 13.5% alcohol, and an intriguing red-clay minerality builds in the long finish. It’s a very interesting wine, good with food, and a good value. U.S. importer: Kermit Lynch, Wine Merchant, Berkeley, Calif. (June 27 , 2019)
FOOD MATCH: Even if Beaujolais is easily dismissed as Burgundy’s forgettable little brother, don’t forget that it’s the local wine of the region around Lyon, arguably France’s second food-and-wine city after Paris. It’s food friendly and versatile, and if it serves a burger as well as a steak, there’s nothing wrong with that. Just for fun, I tried it with a hot-and-spicy breakfast sausage …
WHEN TO DRINK: With the possibile exception of a few of the higher end Beaujolais wines from named villages, the Gamay grape doesn’t make wines that bear long-term aging. Still, this one is quite youthful in its third year and would surely last a few more.
VALUE:
It’s a good value table red at or near Wine-Searcher.com’s $17 average retail and my $18 retail price.
WEB LINK
Importer Kermit Lynch offers this detailed, specific fact sheet on Domaine de la Prébrende and its Beaujolais wines.
FIND THIS WINE ONLINE:
Find vendors and compare prices for Domaine de la Prebende Beaujolais on Wine-Searcher.com.
Read more about Beaujolais and scan a list of some 500 bottles and their vendors on this link at Wine-Searcher.com.
More affordable wines
Want tips to still more good, inexpensive wines? Here are Wine-Searcher links to vendors and prices for a bunch more wines for $10 or less that I’ve told you about during the past year or two. Please tell us about your favorites!
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