The biggest online wine retailer in the US is quitting the state of Michigan in protest at a new law which bans retailers from shipping wines to consumers.
While Michigan’s retailers can deliver wine to neighbouring Ohio, they are banned from doing so in their own area, unless they use their own employees to do so.
The law specifically bans the use of third-party delivery services such as FedEx and UPS.
Now online retailer Wine.com is exiting Michigan, claiming that the state is ‘missing an opportunity’ and will lose valuable tax revenues as a result of the new law.
The legislation effectively reverses a court ruling in October last year that it was unconstitutional to ban out-of-state retailers from selling wine to Michigan consumers.
The pattern of US legislation on direct wine shipments remains confused, with 30 states allowing out-of-state wineries to ship to their consumers, but only 15 allowing out-of-state retailers to do the same.
A larger company such as Wine.com can get around this by running a network of licensed stores within states to comply with their legislation – but not in the case of Michigan.
However, legal experts say the new law is open to challenge, pointing out that the Supreme Court has ruled that states should not make it economically impossible for a company to do business.
Written by Richard Woodard