The state mandate to use this double layer of middlemen drives up costs for small wine operations working on slim profit margins, while ensuring comfortable profits for the wholesalers, who enjoy a government-protected role in selling alcohol.
New Jersey gave its small wineries a little break by allowing them to sell wine at a few locations without using wholesalers. The federal courts, however, have struck down the arrangement because New Jersey does not allow the same direct-marketing privilege to out-of-state wineries. The ruling is being held in abeyance while the New Jersey Legislature figures out a fix.
The state Senate has voted to let all wineries, including out-of-state vineyards, sell directly to customers. The Assembly has voted to let small, out-of-state wineries have the same limited number of tasting rooms and retail outlets now allowed for small New Jersey operations. But the Assembly bill would continue to ban direct shipments to New Jersey homes, whether from in or out of state.
Either approach would fix the legal problem by ensuring there is no discrimination against out-of-state vineyards. But New Jersey legislators are off duty until after November's legislative elections, so wineries must face uncertainty in the interim.
Fortunately, the courts have been patient. Instead of ordering state vineyards to close their direct-vending sites and sell only through wholesalers, they have given the Legislature until March to work out a solution.
It makes sense for New Jersey to join the 38 states that allow direct shipments of wine. None has seen evidence that minors are scamming the system to get wine, either with direct orders or by raiding their parents' orders.
The Senate bill appears to be superior. It gives more choice to New Jersey wine drinkers and offers new opportunities for the state's wineries by opening national markets to them. In return, the wineries must compete with out-of-state vineyards, but that's an acceptable trade-off.
This is definitely a case where restrictive rules hurt consumers and hamstring an industry. So, if there are any wine drinkers among New Jersey's tea-party followers, they might want to use this opportunity to support efforts to allow residents to buy wine on the web and give state wineries the freedom to sell it.
