Thursday, January 12, 2006

If You Can't Beat Them - Take It To Springfield

A bill in Springfield, backed by a major distributors' group, would restrict Illinois wineries' right to sell wine over the Internet, through the mail or by telephone. Distributors say the bill is necessary in the wake of a U.S. Supreme Court ruling last year -- and to prevent sales to minors. But Illinois wine-makers say distributors are trying to choke competition.
"It would be a disaster for the Illinois wineries," said Fred Koehler, president of Lynfred Winery in Roselle. "It's like Goliath against these little farm wineries that are trying to survive."
Associated Beer Distributors of Illinois, a Springfield-based industry group, pushed the legislation, introduced in the House and Senate earlier this month. ABDI Executive Vice President Bill Olson said the state's wineries have used a loophole to escape regulation. The wine bill "hits a middle ground," Olson said.
The idea that this is somehow about “underage drinking” is a farce.  There are two things going on here.

First, distributors are using their clout in order to crowd out the competition that they are getting from direct sales.  (I’m Shocked!  Politically connected parties using the political process to further their own interests?  Say it isn’t so.)

Second, every state is desperately trying to find ways to collect taxes from internet sales.  They haven’t quite figured out how to do that yet, so they are just going to make it harder for you to circumvent the tax and call it a day.

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