Shipping Restrictions Hamper Internet Merchant
For Wine.com, the restrictions are decades-old laws banning the out-of-state shipping of wine. The company announced Friday it is expanding into Michigan, emboldened by a federal court decision declaring state laws there unconstitutional. It is the second court ruling in recent years in favor of more open commerce.
But Wine.com CEO Rich Bergsund said the company won’t use this week’s court decision to enter markets in the remaining 24 states where it doesn’t do business. There isn’t a “domino effect,” he said, referring to similar restrictions in the states barring shipments.
The continued existence of the rules has confounded the industry. Companies like Amazon and Wine.com (California wineries, too) have argued for greater access to the roughly 35 states that still have some kind of prohibition against shipping wine – despite a Supreme Court ruling three years ago urging open markets. Still, states include New York, Maryland and Pennsylvania hold their ground.
Wine.com gets around some of the bans by locating warehouses in the states, therefore qualifying as an in-state shipper. But that of course requires an Internet vendor to build a brick-and-mortar outlet – a strategy that goes against the online grain.
Might this week’s court ruling will mark the beginning of the end of the bans? “It certainly could,” he said.
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