Online purchase and direct shipment could save consumers in McLean, VA, 8-13% on wines costing more than $20/bottle and 20-21% on wines costing more than $40/bottle.
15% of a sample of popular wines available online were not available in McLean, VA wine stores.
U.S has more than 25,000 domestic wine labels. Testimony indicates that direct shipment bans limit consumer access to thousands of wines from smaller wineries not included in the FTC study.
Source: FTC staff report, Possible Anticompetitive Barriers to E-Commerce: Wine (July 2003) and testimony presented at the FTC’s workshop on Possible Anticompetitive Efforts to Restrict Competition on the Internet (Oct. 2002).
“ I want to call attention to the one fact about wine which makes it different from all of the other commodities…that difference being that it is an alcoholic beverage.” (state regulator)
“ We are not selling books, CDs, or wine, but a very sophisticated product…vehicles are different because they require service and are involved in recalls…” (auto dealer)
“ I think it is essential to keep in mind that we aren’t talking about contact lenses or caskets or wine bottles, that we’re talking about something very different when we’re talking about access to the justice system.” (law professor)
“… because pharmaceuticals are inherently dangerous products, the complicating factor is that unlike wine or contact lenses, if the pharmacy is a rogue site, is not monitoring the sales and monitoring what drugs you are buying and how those drugs may interact, that is the factor I’m trying to say is different…” (state official)
“ We that are the brick-and-mortar auctioneers that sell automobiles…make sure the title is filled out correctly, make sure the title is clear, and we make sure that the buyer’s going to get a good title that he can use to go get a tag.” (representative of auctioneer trade association)
“ Real estate is different and a real estate broker’s license is required if you provide that type of service over the Internet…” (state regulator)
For off-premises consumption (ie, What you can take home from this)
Bans on direct wine shipping appear to generate substantial consumer costs, and there are less restrictive ways of accomplishing the proffered policy goals.
Other restrictions on e-commerce in a variety of industries may have similar effects on consumers and should be subjected to careful scrutiny.
The wine debate illustrates pitfalls and principles common to many policy discussions.