The Wine Institute

Aug 10, 2006

SAN FRANCISCO — Underage alcohol consumption is a very serious issue and the California wine industry fully supports strict compliance with state and federal laws prohibiting sales to minors by on-line retailers as well as by bricks and mortar establishments licensed to sell the industry's products.

Research has shown that where direct wine shipping laws are in place, currently 33 states, there are procedural safeguards to ensure compliance. Most wineries obtain age verification prior to ordering and it is required at the point of delivery. In states where legal shipping is allowed, common carrier drivers are trained to obtain the signature of a person 21 years or older and packages must be clearly marked "CONTAINS ALCOHOL: SIGNATURE OF PERSON 21 OR OLDER REQUIRED FOR DELIVERY."

The Federal Trade Commission has studied direct-to-consumer wine shipping and has concluded that procedural safeguards against shipments to minors in states that allow direct wine shipments are effective with states reporting "few or no problems." In addition, the report confirmed that, unfortunately, "Adolescents currently can obtain alcohol without going through the trouble and expense of ordering over the Internet" and further noted that there is no evidence that the direct-to-consumer shipping of wine increases underage drinking. Direct shipping legislation has helped to ensure a more orderly market by promulgating compliance standards.

The vast majority of wine in the U.S., 98-99 percent, is sold through a three-tier system of producer-wholesaler-retailer before reaching the consumer. Direct-to-consumer wine shipping is becoming more widespread because the wholesale tier has experienced dramatic consolidation while there has been explosive growth in the number of wineries - more than 4,000 at last count throughout the country. Since large wholesalers tend to focus on major, nationally-distributed brands, consumers have not been able to purchase the wines of most small wineries or limited-production labels.

Wine Institute questions whether this WSWA survey is motivated by concern over underage access or is another misguided attempt to protect their distribution stronghold following a major defeat in the Supreme Court on May 16, 2005. Any legitimate survey of the issue would also include a review of underage purchases at retail establishments and consider the important role that parents must play in the home where alcohol is most easily procured. Wine Institute believes WSWA should channel its resources into such efforts instead of financing surveys and slick publicity campaigns.