WASHINGTON – Shipping wine directly to the homes of people who order it online doesn’t appear to lead to more underage drinking, regulators said Thursday. Their report found state bans on direct shipping hurt Internet commerce and limit consumer choices.

A Federal Trade Commission study of wine ordered online found that state bans on direct shipping prevent consumers from saving as much as 21 percent off the cost some wines.

“E-commerce can offer consumers lower prices, greater choices and increased convenience,” FTC Chairman Timothy Muris said. “In wine and other markets, however, anticompetitive barriers to e-commerce are depriving consumers of those benefits.”

Addressing concerns that online wine sales could give minors easier access to alcohol, Muris said the FTC found that states that allow direct shipping report few if any problems. He said many of those states require an adult signature to accept delivery.

“We also found no evidence suggesting that direct shipping increases underage drinking beyond the levels attributable to sales by brick-and-mortar stores,” Muris said. “Unfortunately, the evidence shows that adolescents currently can obtain alcohol without going to the trouble and expense of ordering it over the Internet.”

Online wine sales are a small but growing proportion of the wine market, the FTC said.

All states have laws to control the sale and shipment of alcohol. The wholesale industry argues laws are necessary to ensure states can collect alcohol taxes and prevent the shipment of booze directly to minors.

Winemakers have convinced some states in recent years to make exceptions for wine, saying that minors aren’t trying to buy expensive chardonnays and merlots to get drunk.

The result has been a confusing patchwork of state rules and regulations that complicate business for wineries that need to determine if shipping to a particular customer is legal.

The winemaking industry, which wants to end bans on direct shipping, praised the FTC report.

“Arguments against direct shipment simply do not hold up under scrutiny,” said David Sloane, president of WineAmerica, an association with more than 700 member wineries in 48 states. He said the report “will have an extraordinary impact on state legislatures and the federal courts in the months ahead.”

The FTC said the Internet allows wine suppliers, particularly smaller wineries, to market and ship directly to consumers, circumventing wholesalers and retailers.

Craig Wolf, an attorney for the Wine and Spirits Wholesalers of America, called the 139-page FTC report “a waste of tree.” He said the commission has little support for its conclusions.

“People don’t want a looser system of distribution of alcohol,” Wolf said. He said most people are satisfied with the wine selection in stores and those pushing for direct shipping are a small group of wealthy people looking for rare wines.

The FTC study included an examination of the wine market in McLean, Va. before that state lifted a ban on direct interstate shipping in April.

The report said online wine shopping allows people to buy wines not available in stores. Consumers shopping online could save up to 13 percent on wines costing more than $20 a bottle and up to 21 percent on wines costing more than $40, the FTC said.

About two dozen states allow direct shipping of wine with various restrictions. Those states include 13 with “reciprocal” agreements allowing residents in one state to order wine from another reciprocity state.

Most of those states limit the volume of wine shipments and many require shipping containers that clearly indicate only a sober adult may receive the shipment, the FTC said.

Wineries and wine consumers have filed at least seven lawsuits in recent years challenging state laws that ban direct interstate wine shipping, but allow delivery within a state, the FTC said. Courts rulings have been mixed and most of the cases are pending.



On the Net:

FTC: http://www.ftc.gov

Wine report: http://www.ftc.gov/os/2003/07/winereport2.pdf

Wine Institute list of state shipping requirements: http://www.wineinstitute.org/shipwine/analysis/intro-analysis.htm

AP-ES-07-03-03 1828EDT



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