Recent articles by Lettie Teague in The Wall Street Journal and W. Blake Gray on Wine-Searcher.Com continue to spread false claims and inaccurate data concerning DTC alcohol shipping and underage alcohol access.
Gray’s reporting relies heavily on a recent statistical analysis conducted by Vinoshipper President Steven Harrison’s son, which found only 0.15% of the 1.05 million shipments that were tracked by Vinoshipper between 2020 and 2022 were purchased by minors. Additionally, the report states that in each case, these orders were cancelled by their third-party software — a supposed0% failure rate.
What Gray and Harrison fail to mention is that these 1.05 million shipments are a drop in the bucket (only 2%) of the total 41 million-plus DTC wine shipments nationwide, according to the Sovos 2023 Direct-to-Consumer Shipping Report. Additionally, according to regulators on the ground in Massachusetts, the failure rate for DTC licensees not using this proprietary (and costly) Vinoshipper software is closer to 96%.
Gray attempts to bridge the gap in these findings by suggesting that it’s about “what is happening and what could happen,” implying that it doesn’t matter that minors can purchase wine online since they don’t actually do so. This is according to a small sample of data analyzed by a family member of a company that exists to sell wine DTC for profit. His faulty conclusion, based on biased analysis, is that underage access concerns shared by WSWA and state regulators are “propaganda.”
Teague seems to agree, seeming more concerned with “help[ing] drinkers get greater access to wine” and changing some of the “quirky” and “stringent alcohol laws” restricting “maximum access” for consumers. In her commentary, she fails to address any of the issues DTC wine shipping has already introduced into the marketplace, including lost tax revenue, concerns of competition and marketplace leverage by large producers, and underage access.
Throughout her article, Teague seems confused by the concept of a gallonage cap, or a “law that prevents wineries that produce (or own an interest in a winery that produces) more than 250,000 gallons (or about 105,000 cases) a year, from shipping wine directly to drinkers.” While Teague is absolutely correct that this cap doesn’t grant her “maximum access” to the American marketplace via interstate DTC wine shipment, it does guarantee an even playing field in the e-commerce space for the small wineries she later purports to champion.
Gallonage caps, like those Teague dismisses as too “strident,” are actually safeguards that lawmakers put into place to prevent small producers from being boxed out of the market by larger producers that can dominate the e-commerce and DTC marketplaces by outbuying search returns and digital ad space — think Home Depot edging out mom and pop hardware stores or Amazon edging out independent book shops.
And what about illegal shipments? Teague glosses over these as “working around a law” she and her friends consider “quirky.” In sidestepping this issue, both Teague and Gray seem content to completely ignore the impact illegal DTC wine shipping has had on overtasked regulators and state tax revenues — particularly concerning, as state budgets are still recovering from the impacts of the COVID-19 pandemic.
A recent economic survey conducted by John Dunham & Associates found that, should current DTC laws expand nationally to include wine and spirits, job losses in the wine and spirits industry would total nearly 26,000, the national economy would shrink by more than $4 billion, and states would lose more than $7.3 million nationally in tax revenue. Additionally, enforcement agencies across the country would need to hire an additional 2,000 regulators and spend over $256 million to properly enforce interstate DTC alcohol shipping.
One thing is clear: When authors are more focused on “maximum access,” ignoring public health and safety concerns because there is “a difference between minors purchasing and minors consuming [alcohol],” facts go ignored. We get it; educated consumers wish they could get every bottle they dream of delivered to their door. But the fact is, the current DTC marketplace is riddled with issues. Advocates for “maximum access” like Gray and Teague ignore everything from very real public health and safety concerns to marketplace competition, questions of liability and more. They also just contributed to alcohol regulators’ nightmares.