Texas Tests Anti-Competitive Theory vs. Free Markets in Wine

A recent story in the Houston Post highlighted a Texas lawmaker who has recently filed a bill challenging the state’s ban on consumer shipments of wine from out-of-state retailers. In the article, Representative Matt Rinaldi said the ban “is ridiculously anti-competitive‚Ķ It is protectionist and it violates the rights of anyone who values the free market.”

Representative Rinaldi’s statement about a “free market” in wine brings to mind the argument that wholesalers and other opponents of free trade in wine have been making for years: Wine is not like other products and as a result ought to be regulated differently.

By making such a statement what is meant is that access to alcohol ought to be more difficult than, say, access to bread or loafers. This strikes anyone who hears it and who knows anything about alcohol as true. However, this does not mean that the marketplace for alcohol ought or even should be anti-competitive in the way those who oppose direct shipment of wine propose.

In fact, it’s been proven over and over again that consumers can quite easily enjoy the many benefits of a free market in wine, beer and spirits without embracing protectionism.

From ¬†the year 2,000 all the way up to this day, while opponents of direct shipment of wine have constantly warned that this channel of sale and distribution would lead to minors accessing alcohol in epidimic volume, we have seen that nothing of the sort happens. We have seen that a well regulated direct wine shipping channel can very efficiently assure that deliveries of wine are signed for only by adults, don’t invade the cultivated sanctuary of dry counties, don’t lead to lawlessness, increase a state’s tax revenue rather than decrease it, and accommodates a easily tracked paper trail of deliveries.

As Representative Rinaldi’s bill moves forward, we will get a very good sense of who “values the free market” and who does not. We will discover who supports laws that are “ridiculously anti-competitive” and who favors a “protectionist” versus a consumer-oriented system of alcohol regulation.

What’s clear, however, is that no matter the fate of Representative Rinaldi’s legislation, it won’t be a result of Texas consumers needing to be protected from the value of a free market.