In 1973 Irishman and Manchester United great George Best experienced a great fall from grace. At one point he was the best in the world, years later his career was on a downturn. As a waiter was delivering champagne to Mr. Best in his hotel bedroom, he couldn’t help but to say to Mr. Best, “where did it all go wrong George.”

50 years later I have the same question when I look at what happened in Wisconsin recently.

As I previously reported, Wisconsin passed a bill that will make it impossible for common carriers to comply with Wisconsin legal requirements for shipping wine. Under the Wisconsin law, a common carrier that ships on behalf of an unlicensed winery in more than two months shall be revoked. With hundreds of thousands of shipments from common carriers going into Wisconsin, there is a high probability that two mistakes could occur.

The only saving grace is the provision for common carriers has a 12-month delayed effective date, “taking effect on the first day of the 13th month beginning after publication.”[1]

This means there is time to fix the errors and try to rid the law of this unrealistic legal standard.

Now some major wine industry groups are promising legislative fixes will occur, and they will fight against these provisions attacking winery shipping.

But my question is why was it ever allowed to get to this point to begin with?

The common carrier provisions were no secret and were in early pieces of related legislation, such as Assembly Bill 304, introduced on June 8, 2023 and Senate Bill 332 introduced on June 14. 2023.

On November 14, 2023, Senator LeMahieu introduced Senate Amendment 2 to Senate Bill 268, which included the common carrier language from the two aforementioned bills. Somehow the common carrier language made it into the final bill.

It is not like the legislators did not have advanced notice of the proposed bills potential damage. On August 15th the Wine Institute wrote a letter the Chairman that “Unfortunately, as the bill is currently written, it could end all legal direct-to-consumer shipments of wine into Wisconsin.”

Why this happened

So, with the committee members being aware of the bills’ impact, why did these anti-shipping bills pass into law?

There is one simple fact we must remember; liquor wholesalers did not see Granholm as the end of the battle but the beginning. Their goal is to do everything to disrupt and severely limit DTC shipping. One sees this with their advocacy of quantity shipping limits and most recently their attacks on fulfillment houses.  Unfortunately, some in the wine industry have supported efforts to regulate and license fulfillment houses, even though these laws are constitutionally suspect and will act to limit DTC shipping. Their solution is more fulfillment house licensing.

I have to hand it to them; Wisconsin represents a great victory for wholesalers. The wholesalers convinced a state legislature and a governor to sign into law a bill that essentially destroys DTC winery shipping.

They did it mostly through effective testimony from their representative. He ordered a spirit’s product from an unlicensed out-of-state shipper and exploited this situation well and fingered not only the shipper but the common carrier. The common carriers according to the lobbyist are complicit in what he deems are crimes and “they drive the getaway car for these crimes”.[2]

The wine industry representatives did mention that the bill could end wine shipping into Wisconsin but clearly it was not persuasive enough.

Wisconsin Senator Steve Nass, who looked at these bills as restrictive of DTC wine shipping and sees overhaul to a system that is not broken, seem puzzled when he asked.

“If the wineries, which we heard earlier, were participants in constructing this legislation, how did this escape, I am just curious.”[3] 2:36:30.

He brings up a great point, despite an extremist position, the wholesalers were successful and not even a clear opposing position could stop the extreme consequences

Right now, the advocates for DTC shipping are playing from behind and instead of working to expand DTC shipping, we are actually working to preserve it. Even if the Wisconsin law is fixed, we are negotiating from a less than ideal position.

Clearly us supporters of DTC shipping need to change course. The wholesalers are very good in turning the extreme worst-case scenario into a real-life situation. The wholesaler representative does not mention whether wine shipping is causing problems in Wisconsin. Instead, he focuses on an outlier to represent reality.

Also, he turns the tables onto the common carriers and makes them government enforcement officials with no room for error. What he does not tell legislators is the common carrier in many states supply the necessary information to government officials to police the system. This and other information are left out.

The wine industry reps, although talking about cooperation, which is positive, must beat home, what the wholesaler’s extreme position will mean for the industry and that it will make Wisconsin an isolated state. Wisconsin residents will no longer have access to U.S. wine markets and consumers will be restricted to what is in the brick-and-mortar store. The wholesalers intend to make Wisconsin into the next Mississippi or Utah where isolated and closed off markets reign supreme!

In the end, all of us supporters of DTC shipping must do better. We can win all the DTC shipping cases out there, but if Wisconsin type legislation is written and passed, the isolated and extreme regimes will dominant over open markets.  We that support DTC shipping must do better!

[1] https://docs.legis.wisconsin.gov/2023/related/lcamendmemo/sb268.pdf

[2] https://invintus-client-media.s3.amazonaws.com/2789595964/e5022eb92cc7d6a9623c9683a199285e3ecc8cb7.mp4, estimated 5:30:00 of testimony

[3] Id estimated 2:36:30