Web wine ban law of a bad vintage

Regulators start out to police a particular industry and end up protecting it.

Exhibit A is the current battle over selling wine on the Internet.

U.S. District Judge Melinda Harmon of Houston in February invalidated a Texas law stopping companies from selling us wine on the Web. The state of Texas awaits her final ruling so it can appeal.

The U.S. Seventh Court of Appeals in Illinois overturned another district court ruling out of Indiana that struck down a similar state law. There are cases on the issue pending in New York, Virginia, Florida, North Carolina and Virginia.

Those on both sides believe the Supreme Court of the United States will make the final decision.

The defenders of the status quo piously proclaim they just want to protect Texas youth from getting drunk on wine bought via the Internet. Although come to think of it, when I was a teen-ager, I never had any problem getting my hands on booze. That was long before the Internet -- almost before television, for that matter.

Protecting triple marketing

What it's really all about is money. This year the state of Texas expects to collect $514 million on alcohol sales. Those in the alcohol industry want to protect their semisacred triple marketing system. Manufacturers of the good stuff -- and the bad stuff, too -- can legally sell their products only to wholesalers, who sell to retailers, who sell to me.

The triple marketing system is suppose to stop the alleged evils of tied houses -- when a tavern owned by a brewer could only carry its beers.

It's supposed to foster competition. Instead, it protects industry profits at the expense of consumers.

Somehow the triple marketing system gets set aside when the big boys get hurt.

Years ago, Anheuser-Busch, the brewer of beer, purchased Sea World Amusement Park in San Antonio, which sells beer to thirsty visitors. That just happens to violate the triple marketing system. So the Texas Legislature passed the sea mammal exception. It allows any brewer to retail beer at an amusement park it owns, provided the park is not less than 245 acres nor more than 255 acres in a county with a population of over 950,000 -- and if it breeds sea mammals.

Distribution a problem

The current flap over Internet sales is a tempest in a wine cask, to distort a phrase.

There are thousands of wineries in this country. Most sell locally or within their own state. The great majority of Texas wine slides down Texas throats.

Many small wineries can't find a distributor. They don't produce enough to make it economically worthwhile to a big wholesale house. Others get distributed because the wholesaler likes the wine and is doing it as a labor of love.

Internet wine sales would take only a tiny slice of business from its current owners and very little of the $5.4 million in taxes the state will collect this year on wine.

The prime customer for Internet wine sales is someone who really loves wine. He -- and it is usually a he -- wants to buy a particular wine he's heard about or perhaps quaffed while on a visit to the winery. And he can't find it in the local store.

Nor is he interested in buying something on the cheap. The average Internet wine sale is $75.

Just because the stakes are small doesn't mean the incumbents in the business won't fight any change. These guys are not about to give up even a small slice. With the state of Texas on their side, why should they?

Look at how hard they fought against brew pubs. These are small businesses that brew beer and sell it over the counter to customers. They have been legal in most states for years.

But it took a long fight in Texas to give them life. That was true even though the entire annual output of all the brew pubs in Texas wouldn't amount to one day's run of a single giant brewer.

Brew pubs finally became legal in Texas in 1993. I think the sea mammal exception mentioned above was the lever that moved the Legislature.

It was just too bizarre. People wrote about it, and legislators heard about it. Members of the Texas Legislature do a great job of making themselves look ridiculous. They don't need outsiders working on the task.

Now, if they just could do something equally quirky about Internet wine sales.

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