Absurdity of Texas Wine Shipping Law Reaches New Heights

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On Friday, one of the most bizarre press releases I've ever read found its way to my inbox.

"The Texas Alcoholic Beverage Commission (TABC) has issued a Winery Permit to a new Wine.com location in Houston, Texas. This permit authorizes Wine.com to begin selling and shipping wine directly to consumers in Texas. Although Wine.com is not currently producing wine, the company meets all the requirements to hold a Winery Permit in Texas, including a federal Winemaker's and Blender's Basic Permit issued by the Tax and Trade Bureau (TTB)."

I can only wonder what the folks at the TABC have been smoking when I read the following official yet absurdist statement: "Although Wine.com is not currently producing wine, the company meets all the requirements to hold a Winery Permit in Texas."

Okay, let's leave the surreal question of a winery that doesn't produce wine aside for a moment and examine the motivation behind Wine.Com's move.

It's illegal for out-of-state retailers to ship wine to Texas unless they purchase the wine from a Texas distributor, ship the wine back to their own state, and then ship the wine back to the customer in Texas. Even though legal precedent has established that retailers have the right to ship to Texas (see the Commerce Clause of the United States Constitution), lobbyists for the major distributors of fine wine in Texas have succeeded in making it virtually impossible for an out-of-state retailer to ship here legally through this ingenious legislative coup (even though scores of out-of-state retailers ignore TABC requirements).

There is, however, an exception to this rule: If you own a winery in the state of Texas, you can operate as both a distributor and retailer of wine. (I won't get into the sticky issue of the "three tier" system here; see this thread in Tom Wark's excellent blog Fermentation for an overview of how most states, like Texas, require that importers, distributors, and purveyors -- restaurants and retailers -- be separate and independent entities.)

The case of Wine.com is not the first instance of a business obtaining a winery license in the state of Texas so that it can legally sell wine online here. In fact, there is more than one faux winery in Texas that was created for this very purpose.

But the license represents the first instance -- to my knowledge -- where the business in question doesn't produce wine. Clearly, the intent of such a license is to allow Texas wineries to compete with the big distributors (and the intent of current legislation is to protect both Texas-based distributors and Texas wineries).

But the fact that the TABC has openly granted the license to a business that doesn't produce wine is downright absurd.

The good news is that Wine.com will be able to distribute products not currently available in the state of Texas -- like the Castell'in Villa Chianti Classico, above, which made it to my doorstep thanks to a rogue out-of-state retailer (coincidentally based in San Francisco, the same city where Wine.com operates).

The bad news is that it's come to this. An entire generation of young Texan wine lovers and professionals still doesn't have access to a tide of great wine that their counterparts in cities like San Francisco, Seattle, and New York can order with the click of a button. Just ask the two Texan wine professionals who became Master Sommeliers this year, Devon Broglie and Craig Collins (both based in Austin): They both had to travel out of state in order to taste wines that they can't find here (San Francisco was their top destination during their training for the blind tasting exam). The reason? The greedy distributors don't want them to have access to wines they don't sell themselves. Fair enough. But at this rate, Texas is creating a new field of disadvantaged, however, devoted wine professionals who will never know what a Castell'in Villa tastes like.

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