Free Market

Utah’s New Wine Delivery Bill Already Gone Bad

This op-ed was published this week in the Salt Lake City Weekly.

In a state where the free market is seen as a point of pride, alcohol continues to be treated as the boogie man, such that responsible adults are regarded by the state as unable to control themselves and their own drinking habits. This year, the hot topic was whether Utahns should be allowed to ship wine directly to their homes. Sounds pretty trivial, right? Wrong.

Governor Herbert signed House Bill 157 at the end of March, one of two Utah bills this year that proposed easier solutions for consumers to ship wine of their choice into Utah. As is often the case, the bill was warped from its original idea of home direct shipping into something not quite as… sensible?

Rep. McKell, the bill’s sponsor, said that he was contacted by Domo, a software company in the state, in hopes that they could secure the wine delivery legislation as a perk for out of state hires. Despite valiant efforts by Rep. McKell (who does not drink) to legalize wine home-delivery for his constituents, it seems the establishment won this round again. The final bill was reworded and altered so that it allows shipment only to state stores, with an additional kick to the consumer’s wallet.

Consumers are forced to pay a markup charge of 88% on top of the cost of each bottle. To put this into perspective, only six states control the sale of wine, and Utah’s markup on wine ranks among the highest. Assuming a consumer wants to import a $30 bottle of wine, they will end up paying $56.40 for that bottle, not including shipping and handling. 

While this is standard in Utah for all liquor, it counteracts the original intent of the legislation. Perhaps lessening the markup on wine while retaining the spirits markup would be an effective way to appease opponents concerns.

HB 157’s alternatives to direct home shipping are what the bill calls “Wine of the Month Clubs”. In these programs, customers would have to have to join a monthly program in order to qualify to buy out of state wine. DABC would handle the shipping from the winery to a state store in Utah, where the consumer would need to pick up the product. Membership would require periodic shipments of wine to be valid, and so out-of-state shipments would have to be regularly placed. 

This requirement seems odd, as it would encourage the consumer to buy more wine more frequently. For a state which institutes Alcohol Control Laws for the ‘safety and promotion of good drinking habits,’ it seems like this sort of program would only encourage increased drinking for the consumer who might normally only ship wine once or twice a year. 

With the added per-bottle markup, some in the wine industry are even questioning if the bill is worth it. Tyler Rudd of the Wine Institute said that with the needless complexity of the bill, combined with the exorbitant markup, the program’s failure was likely as there was little incentive to the average consumer. He mentioned a similar program tried in Pennsylvania that failed spectacularly: 47 people in the entire state enrolled, and the program cost the state money in start-up costs and administration that could not be recouped. 

While this process may be a minor improvement over the previous out-of-state shipping laws, which required a purchase of at least a case of bottles, it is still a long way from a common sense law that would give consumers what they want: the freedom to purchase and receive wine of their choice within the convenience of their own homes.

Perhaps in coming years the stigma within Utah—that alcohol is a substance which adults cannot be trusted with—will lessen. Should this happen, we may finally see the state easing it’s all too tight grip on the personal lives of Utahns. There is always room for hope, and HB 157 has been a step in the right direction, even if it seemed to have been shot down from its intended goal. 

Tommy Creigh is a student at Westminster College and a Libertas Institute policy research intern.