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Another View -- Tom Wark: NH using gangster tactics to stifle wine competition

May 14. 2018 8:10PM

The recently reported actions by the New Hampshire Liquor Commission to arbitrarily shut down all wine shipments to New Hampshire consumers from out-of-state wine clubs and retailers is a perfect example of why an agency controlling all wine sales in the state has no business regulating its competitors. As we are seeing, it leads to the kind of gangster tactics not seen since Prohibition.

For more than a decade, New Hampshire law has granted out-of-state wineries, wine stores, and wine clubs the right to obtain permits to ship wine to New Hampshire consumers. These sellers pay taxes to the state and submit reports to the state.

Consumers in the Granite State have taken advantage of this policy by looking to out-of-state wineries, wine clubs, and wine stores to purchase vintages not stocked, sold out, or overpriced by the commission. It’s called competition and free trade, something New Hampshire has long been known to champion. Now the commission is looking to put an end to that practice.

Moreover, the Liquor Commission appears to believe itself wiser than the Legislature on these kinds of policy matters. In February, the Senate decidedly rejected a Liquor Commission bill that would have codified a ban on wine shipments from out-of-state wine stores and wine clubs.

Despite this rejection, the commission is now taking it upon itself to implement the policy all by itself.

Now, as the Liquor Commission appears to be missing its annual revenue goals, it appears they are using out-of-state wine stores and wine clubs as scapegoats by claiming these competitors are “diverting revenue” from the state and must be stopped.

Their response is to arbitrarily and capriciously cut off legally permitted wine sellers from continuing to ship to New Hampshire consumers as they have done for years.

In fact, in testifying for the bill that was rejected by the Senate, and which would have given him the power he now has taken all on his own, Liquor Commission Chairman Joseph Mollica noted that the out-of-state retailers he is now barring from shipping accounted for a mere $3 million in sales in 2017, less than one-half of one percent of the Liquor Commission revenues. And much of this $3 million in sales were for hard to find and rare wines not available from state liquor stores. The claim that out-of-state retailers are “diverting” revenue is bogus from the start.

More than anything, these kind of gangster tactics indicate why the agency that controls all wine sales in the state has no business regulating its competitors. As we are seeing, it’s akin to inviting Al Capone to oversee enforcement of Prohibition.

Given the chance and hoping no one is looking, it attempts to dismantle even the tiniest competitors. Right now, it is cutting New Hampshire consumers off from out-of-state retailers and wine clubs. How long until the commission decides that out-of-state wineries in California, Oregon, Washington, and New York must be stopped too?

In the end, it is the state’s consumers that are punished the most by this abuse of power. For years, New Hampshire consumers have purchased wines from out-of-state wine clubs and wine stores that stock hard to find, rare, and collectible wines. Wine-of-the-month clubs have provided access to unique wines.

With the current policy in place, consumers will no longer have access to these wines.

When you consider that the commission’s selection of wine amounts to a mere fraction of the hundreds of thousands of wines available in the United States, New Hampshire consumers will be left with a pathetic selection of Commission-approved wines.

The Legislature is considering a Senate amendment to HB 1626 that would replace the current, arbitrary policy of no retailer shipments with allowing shipments from only 13 states. That would amount to blackmail by the commission: “Pass a more restrictive retailer wine shipping bill or there will be no shipments by any retailers at all.”

Instead, lawmakers ought to take the regulation of out-of-state shippers completely out of the hands of the Liquor Commission to assure that the gangsters are not running the store, kicking consumers, and curtailing competition.

Tom Wark is executive director of the National Association of Wine Retailers.

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