If the U.S. Supreme Court strikes down state’s authority to require in-state residency for bev/al retailers, the big winner will be Amazon.com.
And the big loser will be those bev/al retailers who filed a challenge to Tennessee’s law requiring bev/al retailers to have a residence in the state. The case is being called “Granholm 2,” a reference to the U.S. Supreme Court decision that legalized direct-to-consumer shipments by wineries. We alerted you Friday the Supreme Court had agreed to hear the case.
At the time, the Supreme Court said the three-tier system was unquestionably constitutional.
Bev/al trade associations said they would review the case in terms of its impact on state regulation of alcoholic beverages.
“The U.S. beverage alcohol market is the safest, most diverse, competitive and profitable in the world—offering consumers the widest array of products available anywhere,” said Michelle Korsmo, president/ceo, Wine & Spirits Wholesalers of America.
“It is made possible because independent state regulators, in partnership with federal counterparts, maintain authority and oversight over their licensees to ensure product integrity and protect consumer safety,” she said, adding:
“WSWA has always been a staunch supporter of state regulatory authority, we will examine the issues at question in this case and assess the potential for it to impact that authority.
Craig Purser, president/ceo, National Beer Wholesalers Association, said:
“As the U.S. Supreme Court reviews Tennessee’s residency requirement for licensed retailers and wholesalers, NBWA will continue to support and defend the independent beer distribution system which works so well for so many.”
“Central to this efficient and effective system is the proven state regulatory framework under which everyone benefits. As the Supreme Court has said in previous cases, ‘The three tier system is unquestionably legitimate,’ and we look forward to them reaffirming that principle.”
Until its acquisition of Whole Foods, Amazon allowed wineries and other wine suppliers to sell wine through Amazon.com. That operation was called Amazon Wine, and wine suppliers paid fees to Amazon to sell through Amazon Wine. When Amazon acquired Whole Foods, it ran the risk of running afoul of tied-house laws which, among other things, prohibit retailers from accepting payments from suppliers to advertise their goods.
But if Tennessee’s residency requirement is overturned by the high court, Amazon will be able to sell wine in any state in which it meets other requirements pertaining to alcohol retailers.