Prohibition Hasn't Ended Yet
Special Interest-Serving Laws Restrict Wine Imports to Michigan
JULY 01, 2001 by LAWRENCE W. REED
It’s been nearly seven decades since the national war against alcohol during Prohibition (1920-33) came to an end with the repeal of the Eighteenth Amendment. But 30 states, including mine (Michigan), still prosecute a kind of mini-Prohibition of their own: They forbid consumers from buying wine from other states unless the products are shipped through a state-licensed liquor authority. (Some number of states also have similar laws against imports of other forms of booze but I’m focusing on wine in this essay because it’s what I like best.)
The Michigan law is a relic from 1934, when states took over the regulation of alcohol sales after national Prohibition was repealed. Its practical effect today is to bestow a monopoly privilege on domestic sellers, raise prices, and limit choices for consumers.
Imagine if the state of Georgia passed a law declaring that its citizens could not buy peaches from producers in any of the other 49 states unless they imported them through a state agency that jacked the price up 25 percent. Could such a law be defended as anything but a brazen favor for a special interest, Georgia peach growers?
Yet in Michigan and 29 other states, ancient laws that restrict the importation of wine are often seen as serving some public good. The fact is, they don’t serve the public and they don’t do any good. No credible evidence exists showing that people who tend to abuse wine are deterred from getting it because of these regulations.
According to Deborah Simpson of the Institute for Justice (IJ), a Washington, D.C.-based legal advocacy group with a track record of getting special-interest legislation thrown off the books:
- Laws in most of the 30 “prohibition” states even forbid tourists who visit wineries to ship a bottle or a case of wine home to themselves. Seven states classify such shipments as a felony. In some states, like Maryland, a consumer may not even carry wine back home from a visit across the Potomac to Virginia’s wine country. They are limited to purchasing wine from one of the 50 wineries typically sold in the average wine shop or liquor store, a minuscule percentage of the 4,500 labels produced in California alone.
- With such oppressive laws, you may well have to wait until your next vacation to enjoy once more that lovely California Pinot Noir.
Without a doubt, lots of people ignore such laws and transport lots of illegal alcohol across state lines even for the purpose of resale. Short of searching every car and truck at the borders, no state can possibly expect to stop the flow. The primary effect of these anti-booze laws is probably confined to preventing wineries and other beverage distributors from selling their wares over the Internet. If you live in one of the 30 Prohibitionist states and have ever attempted to purchase wine from one of hundreds of Web sites of wineries in other states, you’ve discovered that all but a handful send back a reply, “Sorry, yours is not a ship-to state. We can’t sell to you.”
In Michigan, a tiny number of out-of-state sellers have been “approved” to sell and ship to Michiganians: They are the ones—surprise, surprise—that agree in advance to comply with state regulations and promise not to undercut the prices charged by in-state producers.
No matter what happens in Michigan courts, the ban on interstate sales of alcohol may run afoul of events elsewhere. IJ is litigating a challenge to a similar state law in New York. In refusing to dismiss the case last September, a U.S. District Court judge noted that the repeal of Prohibition in 1933 was not intended “to empower states to favor local liquor industries by erecting barriers” to competition. If the case goes all the way to the U.S. Supreme Court, the states may be hard-pressed to defend discriminatory treatment of one another’s alcoholic beverages in interstate commerce.
Legislators don’t need to wait for the courts to work this out. They should recognize the futility of this throwback to Prohibition, strike a blow for freedom of choice and competition, and repeal these ridiculous, special-interest-serving and otherwise utterly futile laws.