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Denise

Selling online/across state lines

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We are all waiting to figure out the legal stance of the recent supreme court ruling in Tennessee started by Total Wine & Spirits. They won! Where does that leave us?! It should be opening new doors online and beyond! The dissolution of the pathetic money sucking 3-tier system should be next to go! Does anyone know where these things stand?

And on another note, Will the excise tax reduction be made permanent before the end of the year?! If not, how many of us will still be around?! 

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TexCF' link is to an informative analysis of the court'rs ruling.  Before becoming too joyous, read it.  It is straightforward and not so dense that you need a law degree to understand what the decision does and does not do.  Nothing in the case involved interstate shipments.  It involved licensing only.  Nothing struck down the three-tier system, although, the article points out, it did not "unquestionably" support the legitimacy of the system as the Granholm decision on wine shipments did.  As to the "dissolution of the pathetic money sucking 3-tier system" being "being next to go." the article goes on to discuss, briefly, two cases the challenge bans on interstate shipments.  They are based on the fact that they discriminate by allowing intrastate shipments while banning interstate shipments.  The article then points out the obvious fly in that ointment, statting "Even if the outcome of these cases is that state laws are found invalid, it will not necessarily mean that these states will allow out-of-state retailer direct shipments. Upon a court ruling that a state’s laws are discriminatory and unconstitutional, the state could decide to rectify the issue by “leveling down” to prohibit all retailer alcohol shipments to consumers, from both in-state and out-of-state retailers. As such, the law would apply equally to all retailers regardless of location, so it would not be discriminatory. “Leveling down” to remove all retailer alcohol shipping privileges would likely be unpopular with consumers, but it may find support from some segments of the alcohol industry. Thus, this outcome remains a possibility even if litigation challenging laws prohibiting out-of-state retailer shipping is successful."

So, the warning aboutt throwing the baby out with the bathwater applies.  So does the adminitipon about being careful what you wish for.  This is not for amateurs and I am an amateur, but I suggest that you  understand what your state legislature is likely to do before throwing your support behind efforts to allow interstate shipments.  I'd also suggest, again as an amateur, that unless you've got a lot of marketing money just laying around waiting for a place to land, you spend your marketing dollars and time pursuing consumers much closer to home.   I also recommend that you consider how locavore sentiments make small enterprises possible.  Is your version of Irish whiskey really better than Redbreast 12 year old?  Next,  why would I, a Washington resident, buy spirits from a small California  distiller, when I can support small local distilleries that are producing every bit as good a product?  Why  would I join a California distillery's club when I can join a local distillery's club?  Why would I buy a Mississippi whiskey instead of Redbreast?

Finally, there are many small producers who do not hold that wholesalers are pathetic money suckers.  Yes, there  is the  argument that a wholesaler does not have nearly the investment in equipmentment, etc, that a producer does, and that they should not be entitled to the same profit margins,.  But they have, or should have, expertise that you probably do not.  Consider the consequences of bypassing the supply chain.  If, by making direct shipments, you eliminate  wholesalers and brokers  and retailers who hand sell your costly product too,  you become the marketer and incur the marketing costs in any market that you might seek to enter.  You also lose focus.  You have to spend time developing marketing strategies instead of managing costs and  creating products.   What is that worth to you?  Are the small wholesalers who gain you traction in another state really only bloodsuckers?  I think you might want to consider how you can be a more effective partner with the wholesaler/broker, with each focusing on what each knows best.  But I'm an amateur and it ain't my dollars on the line..  

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1 hour ago, dhdunbar said:


But I'm an amateur and it ain't my dollars on the line..  

I agree there are probably a number of decent companies in this 3-tier system, unfortunately, we haven't seemed to find a good one yet. So we are actually, focusing much closer to home. We do however, get lots of requests for product in places we cannot ship to. There are lots of craft distilleries products I'd love to be able to get, over the rows and rows of mostly big name products available in the stores. Hoping for a continuous momentum forward.

Right now, the next big item is the excise tax. With all of this hoopla in DC, the odds of them doing any real work, including making the excise tax reduction permanent, looks dim.

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Actually, the biggest outcome of this case potentially from follow on cases, beyond expanding Granholm clearly to spirits, will be preventing states from giving privileges to in-state distilleries without also making the same privileges available to comparable out-of-state distilleries. For example, if you create a license that allows a distillery producing from a farm in your state to self-distribute, but don't allow a farm distillery from out-of-state to obtain an equivalent license, that might be found unconstitutional if challenged as an extension of the reasoning of this decision.

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On 10/8/2019 at 12:18 PM, Denise said:

Right now, the next big item is the excise tax. With all of this hoopla in DC, the odds of them doing any real work, including making the excise tax reduction permanent, looks dim.

I think the best we could hope for this year would be a one or two year extension.

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