Prohibition Hasn't Ended Yet

Special Interest-Serving Laws Restrict Wine Imports to Michigan

It’s been nearly seven decades since the national war against alcohol during Prohibition (1920-33) came to an end with the repeal of the Eighteenth Amendment. But 30 states, including mine (Michigan), still prosecute a kind of mini-Prohibition of their own: They forbid consumers from buying wine from other states unless the products are shipped through a state-licensed liquor authority. (Some number of states also have similar laws against imports of other forms of booze but I’m focusing on wine in this essay because it’s what I like best.)

The Michigan law is a relic from 1934, when states took over the regulation of alcohol sales after national Prohibition was repealed. Its practical effect today is to bestow a monopoly privilege on domestic sellers, raise prices, and limit choices for consumers.

Imagine if the state of Georgia passed a law declaring that its citizens could not buy peaches from producers in any of the other 49 states unless they imported them through a state agency that jacked the price up 25 percent. Could such a law be defended as anything but a brazen favor for a special interest, Georgia peach growers?

Yet in Michigan and 29 other states, ancient laws that restrict the importation of wine are often seen as serving some public good. The fact is, they don’t serve the public and they don’t do any good. No credible evidence exists showing that people who tend to abuse wine are deterred from getting it because of these regulations.

According to Deborah Simpson of the Institute for Justice (IJ), a Washington, D.C.-based legal advocacy group with a track record of getting special-interest legislation thrown off the books:

  • Laws in most of the 30 “prohibition” states even forbid tourists who visit wineries to ship a bottle or a case of wine home to themselves. Seven states classify such shipments as a felony. In some states, like Maryland, a consumer may not even carry wine back home from a visit across the Potomac to Virginia’s wine country. They are limited to purchasing wine from one of the 50 wineries typically sold in the average wine shop or liquor store, a minuscule percentage of the 4,500 labels produced in California alone.
  • With such oppressive laws, you may well have to wait until your next vacation to enjoy once more that lovely California Pinot Noir.

Without a doubt, lots of people ignore such laws and transport lots of illegal alcohol across state lines even for the purpose of resale. Short of searching every car and truck at the borders, no state can possibly expect to stop the flow. The primary effect of these anti-booze laws is probably confined to preventing wineries and other beverage distributors from selling their wares over the Internet. If you live in one of the 30 Prohibitionist states and have ever attempted to purchase wine from one of hundreds of Web sites of wineries in other states, you’ve discovered that all but a handful send back a reply, “Sorry, yours is not a ship-to state. We can’t sell to you.”

In Michigan, a tiny number of out-of-state sellers have been “approved” to sell and ship to Michiganians: They are the ones—surprise, surprise—that agree in advance to comply with state regulations and promise not to undercut the prices charged by in-state producers.

Simpson explains:

  • Those restrictions are not only maddening to small wineries, which, like any business, depend on finding and keeping new customers, they are profoundly anti-consumer given the Internet’s ability to match producers to virtually every interested consumer. Websites could help California or Virginia wineries locate potential customers in New York and advertise their latest-release wine to that interested audience. But under New York’s laws, if a winery owner posts any wine list or order form on a website or sells wine directly to that New York consumer, he is an outlaw. Defenders of these protectionist, nanny-state rules argue that opening up the market to Internet sales would make it easier for underage minors to get alcohol. James Rodney of Birmingham, Michigan, has a commonsense answer to that: “I really think a minor who wanted a bottle of good wine would find someone to buy it for him instead of using a credit card over the Internet and waiting for delivery at his parents’ residence or even a college post office box.” Like thousands of citizens who don’t abuse alcohol and would simply like to get an occasional bottle from a favorite out-of-state winery, Rodney wonders what makes the state think its law does any good. He notes that Michigan wineries that have Web pages can and do sell wine legally over the Internet to Michigan residents!So ultimately, what we’ve got here is not a law that prevents wine drinking; it’s simply a law that prevents one convenient way of getting it, or of getting the particular vino of one’s choice.Nonetheless, the Michigan Liquor Control Commission does make an enforcement effort. In a state of nearly 10 million residents, the Commission seized more than a hundred packages of illegally shipped wine, beer, and liquor last year. That’s right—barely a hundred packages. Only a nincompoop could think they got it all, or that a hundred packages represented more than a drop in the vat. At the same time its agents snapped up a few bottles of booze (probably spending a small fortune to do so), the Commission has been fighting a lawsuit filed by Michigan residents who claim the law is unfair and violates the interstate commerce clause of the U.S. Constitution.

    No matter what happens in Michigan courts, the ban on interstate sales of alcohol may run afoul of events elsewhere. IJ is litigating a challenge to a similar state law in New York. In refusing to dismiss the case last September, a U.S. District Court judge noted that the repeal of Prohibition in 1933 was not intended “to empower states to favor local liquor industries by erecting barriers” to competition. If the case goes all the way to the U.S. Supreme Court, the states may be hard-pressed to defend discriminatory treatment of one another’s alcoholic beverages in interstate commerce.

    Legislators don’t need to wait for the courts to work this out. They should recognize the futility of this throwback to Prohibition, strike a blow for freedom of choice and competition, and repeal these ridiculous, special-interest-serving and otherwise utterly futile laws.

More by Lawrence W. Reed

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