Wine.com Puts a Cork in Competition

In late December, Wine.com CEO Rich Bergsund told Richard Cartiere’s Wine Market Report that his company was reporting the crimes of other wine retailers that were “violating various direct shipping restrictions” (note: Link leads to a pdf file). According to Decanter.com, Wine.com targeted these retailers through a series of sting operations: “Wine.com placed orders with at least 29 retailers that violated state shipping regulations and then, through its law firm, since last July has been reporting the illegal shipments to state regulators in Washington, New York and other states.”

Tattling on the competition isn’t good for PR, especially when many wine enthusiasts rely on wineries and retailers that sneak around shipping regulations in order to get their favorite bottles in the mail. Alder Yarrow at Vinography has kind words for all the wine retailers that break the rules:

Good for them. If the state governments of this country are too close minded to pass sensible laws that let adults buy wine on the Internet from out of state AND they are too bureaucratically challenged to enforce those laws, then screw ’em. Which is precisely what thousands of retailers, and in particular, Internet retailers have been doing for years—discreetly helping wine lovers buy the wine they want to buy.

Is this guy a wine-blogger-turned-anarchist or does he have a point here? Wine.com’s Bergsund responded to this post to explain that his company has been forced to play by the rules, even though the laws limit its selection in certain states and force Wine.com to spend money on multiple warehouses, rather than shipping from one central spot. If state wine regulators aren’t going to open up interstate shipping, Wine.com wants them to start enforcing their laws uniformly.

Wine Spectator’s report on this complicated situation presents both sides of the story, but the magazine gives the last word to another retailer, Sherry-Lehmann’s Michael Aaron:

If Wine.com is successful in pushing its competitors out of the nine states in which it ran sting operations, ‘consumer[s] better dig deep into their pocketbooks, because the prices of wine will go skyrocketing,’ said Aaron. ‘It’s an outrage.’

However Chowhound poster mengathon wonders if Aaron should be one to talk, being that “[Sherry-Lehmann’s] prices are at times a 50% premium over other stores in NYC.”

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