The U.S. Supreme Court recently issued a ruling that has the potential to bring better access for digital wine sales. The 7-2 decision in the Tennessee Wine & Spirits Retailers Association v Thomas case declared a Tennessee law that required a two-year residency for anyone looking to acquire a liquor license as being unconstitutional.
“Because Tennessee’s 2-year residency requirement for retail license applicants blatantly favors the State’s residents and has little relationship to public health and safety, it is unconstitutional,” Justice Samuel Alito wrote for the majority of the court.
The last time that Supreme Court issued a ruling on state regulation of liquor sales was back in 2005 in Granholm v Heald. That decision made interstate shipping to wineries possible, but not retailers. Alito specifically referenced the 2005 decision in the latest ruling: “The Court stated that the [Commerce] Clause prohibits state discrimination against ‘all out-of-state economic interests’.” While the impact of the court’s decision does not mean that digital wine sales will immediately be available in all states, it does move the issue into state courts.
“The decision is a historic win for both free trade and wine consumers across the country,” National Association of Wine Retailers Executive Director Tom Wark said in a press release. “We are equally confident that this Supreme Court decision will lead to greater access to the hundreds of thousands of wines many consumers do not currently have access to due to protectionist wine shipping laws.”
The Court’s decision creates the potential for digital wine sales directly to consumers and presents states with constitutional issues to address. There are at least 16 states which currently prohibit out-of-state retailers to ship directly to consumers and only about a dozen states currently allow out-of-state wine retailers to ship directly. Many states will need to evaluate their laws pertaining to alcohol or risk being taken to court.