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COPYRIGHT 2001 Hiaring Company
If this were a simple world, someone wanting to buy a bottle of good wine would just go to the Internet, dial up their favorite winery and order it, it being delivered to their door a few days later. But in the real world, that seemingly basic transaction involves not only buyer and seller but their respective state legislatures, an army of special interest groups, the Christian Coalition, the largest U.S. winery, the Teamster's Union and a variety of private individuals who do not even live in either the buyer or seller's states. And, oh yes, the U.S. Constitution, Congress, the Supreme Court and every level of state and federal judiciary. Welcome to the world of direct shipping.
Many people are literally startled to learn that buying an out-of-state bottle of wine or beer makes them an accessory to a criminal act. And the stakes are high, too. In 29 stares, directly shipping an out-of-state alcoholic beverage to an adult consumer can land the shipper/seller in jail or cause his or her federal license to do business in alcoholic beverages to be revoked. One would be apt to ask why such draconian measures are necessary for what is otherwise a simple act of interstate commerce. The answer is complex.
We start with the 21st amendment to the U.S. Constitution, which repealed the 18th amendment (prohibition) and then went on to say: "The transportation or importation into any State, Territory or possession of the United States for delivery for use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited." That is virtually the entire 21st amendment. The vague language was bound to create a whole host of interpretation problems, and it did.
Some background is in order. The effect of the passage of the 21st amendment was to let each state decide how it would regulate alcoholic beverages. Some shucked off prohibition, others kept it in various forms--usually at the county level; some states assumed the job of importing and selling such beverages for themselves in so-called "state stores." Most, however, set up what is now called "the three-tier" system. That is, suppliers on one end, retail sellers on the other, and wholesalers in the middle. [1] This system was embraced by states because it was the simplest method of collecting excise taxes at the wholesaler or middle tier. Obviously, it was therefore in the state's economic interest to require all alcoholic beverages to pass though the three-tier system.
The only problem with that was that no amount of wholesalers could possibly supply consumers with all of their licensed beverage needs or wants. It was widely known that if consumers couldn't get it locally, they got it from out-of-state sources, going there personally (most states recognize this and set a limit on how much ethanol residents can buy and bring back from out-of-state sources) or picking up the phone and ordering it and having it shipped directly to their homes. This "gray market" coexisted very nicely along side the three-tier system because the lion's share of the alcoholic beverage sales were local. It was more convenient to go to the corner liquor store and have that bottle immediately in hand instead of waiting a week, two weeks or a month for it to be shipped. No one seemed to mind that occasionally people would go outside the three-tier system. Even...
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