Does high court ruling uncork competition?

Ruling may be a blessing for individual wineries, but Wine.com CEO predicts it won't have much impact on broader industry.

The Supreme Court's ruling on alcohol sales may be a blessing for individual wineries, but Wine.com CEO George Garrick predicts it won't have much impact on the broader industry.

"It's not as if all these wineries have huge marketing budgets ready to go," Garrick said. "Is this good for the wineries? Sure it is. Is it good for the consumers? Sure. In the scope of the entire multibillion-dollar wine industry, does it make a difference? No, not really."

The U.S. Supreme Court ruled Monday that state governments may not prohibit residents from ordering directly from out-of-state wineries. The ruling effectively means that oenophiles in states with protectionist laws--about half--will enjoy lower prices and more choices because they will be able to bypass distributors and order directly from a winery's Web site. It could also open the doors to direct beer and hard liquor shipments.

But Garrick, who inked a partnership with Amazon.com this month, said that bottles from large wineries already can be ordered through resellers online who have licenses to ship to most states. Wine.com ships to 36 states and the District of Columbia; states such as Utah and Pennsylvania where the government controls alcohol distribution remain off-limits.

Ross Stromberg, an attorney at Jones Day who also owns the aptly named Shyster Creek Vineyards, thinks Monday's ruling will shake up online ordering by permitting direct shipments by Internet retailers. "I think as long as (an online retailer) gets the requisite license locally, and as long as New York doesn't prohibit the Amazons of the world from doing it in a discriminatory way, they would be allowed to ship directly," Stromberg said.

About the author

Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.

 

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