WSWA responded to assertions in Roger Morris’ article, “Does the three-tier system in the US still have legs?” that the three-tier system is archaic and prevents consumers choice. Mainly, assertions were made that WSWA’s efforts at preventing DTC shipping were hurting consumer choice and were not preventing the evils of underage access to alcohol and stopping counterfeit products.

I wanted to take some time on a beautiful Thursday afternoon to address WSWA’s points.

WSWA delves into statistics from Massachusetts where 96% of 15-year-olds had their DTC orders and payments accepted by DTC shippers. 26% of the shipments were left at the door, 43% of the shipments did not obtain an adult signature and zero verified the age of recipients upon delivery.

First, the VinoShipper study demonstrates that minors are not going online to purchase alcohol. VinoShipper conducted a study over a 3-year period in which there were nearly 634,000 attempted buys on its website and it discovered that only 943 attempted buys were made by minors. Which means only 0.15% of all attempted buys were performed by minors. With a miniscule number representing 0.15% of all attempted buys, it would lead a logical person to conclude that minors are not utilizing the online marketplace to access alcohol.

The minors purchasing online in Massachusetts were done pursuant to a government sting. But really does this happen in real life, in real life minors aren’t accessing the internet to purchase alcohol.

Let’s look at the stats about 43% of the shipments not obtaining adults signatures and zero age verified. I assume these shipments were made to Massachusetts enforcement officers, all well over the age of 21. So suppose the vast majority of agents are over 50, if the same agents walked into a retail store would they be carded?

I mean think about it for a second, if someone looks like Grizzly Adams, do we expect the retail store to card them?

Now Massachusetts may have laws that require adult signature and age verification, and if so, shame on the carrier for not doing its job. But we must ask, did the carrier fail to positively ID someone that looks close to 21 or did they fail to positively ID someone that looked like Uncle Jesse from the Dukes of Hazzard?

Market share

Next WSWA takes aim at DTC creating an environment where market share is dominated by 2% of DTC licensees, who are closing off market choice. The 2% of the licensees take 40% of the market share according to Massachusetts data. For WSWA this leads them to believe that “DTC stifles innovation, competition, and consumer choice by creating an e-commerce marketplace that favors only the largest producers.”

Maybe they forgot what the wine market looks like in the United States. In an article in Wine Economist, Mike Veseth states, “If we assume that the total U.S. wine market was about 450 million cases in 2021, then the Big 3 accounted for about 38% of sales by volume. If imports accounted for a third of total sales, then the Big 3 alone were responsible for 57% of domestic-produced wine sales by volume.”

So somehow, concentration at the top in the brick-and-mortar realm is okay, but it is not permissible in the DTC market? There are over 11,000 wineries in America according to Sovos Ship Complaint,  the top three wineries represent 38% of the sales, that means .00027% of wineries dominate market share . Yet, WSWA has us believe that consumer choice is stifled when 2% of licensees constitute 40% of the market, but somehow it works swimmingly when the top .00027% represent nearly the same market share.

If we want to discuss consumer choice, wholesalers are limited in what they can and will hold and often times the only place to get the desired product is via the internet.

Of course if we are discussing consumer choice, this is not about DTC limiting options but about what consumers want. Since the Supreme Court legalized DTC wine shipping in Granholm, the number of wineries in the U.S. has nearly doubled, which means more consumer choice.

If 2% of the licensees account for 40% of market share that is because consumer are making the choice to purchase those products, it does not provide evidence that somehow DTC shipping is stifling consumer choice.  


If the three-tier system has legs as a great model for providing consumers what they want, then it is pretty crippled. The growth in the diversity of liquor products has arisen because of vertical integration in the marketplace and DTC shipping. In concluding, the market must grow and growth is driven by freer markets and opportunity, something the traditional three-tier system is not providing.