Wine Spectator: Will The Supreme Court’s Tennessee Decision Dramatically Change The U.S. Wine Market?

July 17, 2019

On June 26, the Supreme Court handed down a milestone ruling in Tennessee Wine and Spirits Retailers Association v. Russell F. Thomas, striking down Tennessee’s durational residency requirement for alcohol retailers, which mandated that only people who had lived in the state for two years or more could get a license to sell alcohol. In a 7-2 ruling, the majority opinion declared that the law existed only for economic protectionism, and not to promote temperance and an orderly market.

While the issue at hand was narrow in scope, the decision may have larger consequences for the wine market, including opening the door to challenges to laws that ban wine retailers from shipping to customers in other states.

“I don’t think it’s possible for discriminatory wine retailer shipping laws to stand now,” said Tom Wark, the executive director of the National Association of Wine Retailers (NAWR). The NAWR is a proponent of loosening shipping laws, and Wark believes the court’s ruling on Tennessee Retailers puts his organization and its allies in a very good position to make their case for out-of-state retailer direct shipping in states that currently prohibit it.

But not everyone agrees the case will have such major consequences. “Since alcohol is unlike any other consumer good, the 21st Amendment was enacted to give states authority to regulate alcohol as they see fit and that authority remains broad,” read a statement from the Wine and Spirits Wholesalers of America.

Indeed, while there was much rejoicing by shipping supporters, consumers in the 37 states that currently ban out-of-state retailer shipping shouldn’t expect to be able to order wine online from beyond their state’s borders anytime soon. “From a legal perspective, [the justices] narrowly struck down the law. And it leaves all sorts of other questions unanswered,” said William Cheek III, partner at Waller Lansden Dortch & Davis.

“It’s not as though this case definitely opened up the doors to retailer direct-to-consumer shipping in all states, but it’s certainly cause to question any discriminatory laws that a state may have for in-state retailers versus out-of-state retailers,” said Lindsey Zahn, an attorney at Lehrman Beverage Law. Wine Spectator has more on the Tennessee case’s ramifications for the U.S. wine market moving forward.—Emma Balter

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