The San Francisco Chronicle’s Esther Mobley had a great piece today entitled: “Here’s why wine doesn’t ship for free — and shouldn’t if you want small wineries to survive”
The Repeal that Wasn’t
Just why is shipping wine such a nightmare? And so expensive? There are a lot of reasons, mostly dating back to the 21st Amendment–the Repeal of Prohibition that wasn’t. We all know of the 21st Amendment as “repeal,” but rather than repeal the 18th Amendment‘s prohibition of alcohol, the 21st ended the Federal prohibition of alcohol and allowed its regulation by the states, trumping even the Interstate Commerce Clause and allowing states to make their own rules about alcohol both within and crossing their borders.
The Granholm v Heald case opened up most states to direct shipping, although a few holdouts remain. Those that do allow direct shipping can make their own rules about it. Most require a license, varying in cost from $0 to almost $700/year. In addition, their are onerous reporting requirements and the shipper is usually required to collect and pay sales and/or excise tax on the wines shipped, too.
Oligopoly and other shipping rules
For reasons no one can fathom, the United States Postal Service is not allowed to carry wine or other alcohol. That leaves FedEx, UPS, and a handful of regional carriers, and results in higher prices. All states also require that alcohol carriers deliver only to an adult over 21 and obtain a signature. Packages cannot be left at the door, with a neighbor, etc. If your carrier is willing to do these things for you, you are lucky, but be advised that your delivery person is risking a felony charge for doing so.
These rules mean that delivery attempts often fail. “Oh, I’m always home,” except when you step out just when the delivery attempt is made. That results in higher costs for the carrier, and of course they build those into the shipping charges. This is one of many reasons why it is best to ship to a business or to a FedEx or UPS location where you can pick up the wine. For a typical case shipment, this can reduce the shipping charges by about $8. If your friendly wine shipper, such as PWR, charges actual shipping costs rather than a flat fee, this will result in savings for you, too.
Mobley talks about how many wineries are subsidizing shipping costs, even when the charge might seem high at, say, $40/case. Again, PWR charges actual shipping costs, but we are still subsidizing each shipment. FedEx might charge us $50 to ship a case, and we will pass that along, but we will not charge for the shipping box (which can cost as much as $8), nor for the license we bought to ship to your state, nor for the time it takes to prepare and pack the wine (which may not seem like much but can be rather time consuming), nor for the significant amount of time we spend complying with each state’s reporting requirements.
Summary–We love you and are happy to ship you wine
We don’t mean to grumble about all of this. We just want you to have a better understanding of why shipping is so darn expensive and to let you know why shipping to a business address or to a carrier depot such as a FedEx store or Walgreen’s can save you a little money. We welcome your questions and feedback.