In today's retail environment, consumers continue to seek, and retailers continue to explore, creative ways to deliver products directly to consumers. Consumers can order anything from groceries to clothes to toiletries directly to their door. When it comes to wine though, states are increasingly cracking down on illegal shipments of wine to consumers. This article discusses the direct-to-consumer (DTC) wine industry and the increasing crackdown that is occurring on companies illegally shipping wine across state lines.

When the 18th Amendment to the U.S. Constitution, which prohibited the manufacture, sale or transport of intoxicating liquors was repealed by the 21st Amendment, states assumed control over alcohol sales and transportation. This led to the states passing a wide variety of laws and in many instances, passing restrictions regarding shipping alcoholic beverages across state lines. Indeed, in some instances, states enacted such restrictive restrictions that it became illegal to ship alcoholic products into those states. In the seminal case of Granhold v. Heald, 544 U.S. 460 (2005), the U.S. Supreme Court ruled that laws passed by New York and Michigan that permitted in-state wineries to ship wine directly to consumers, but prohibited out-of-state wineries from participating in the same conduct, was unconstitutional. In so holding, the court held that discriminating against interstate commerce violated the commerce clause. Specifically, the court opined that, "state laws violate the commerce clause if they mandate differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter." The court went on to note that the "discriminatory character of the Michigan system is obvious. Michigan allows in-state wineries to ship directly to consumers, subject only to a licensing requirement. Out-of-state wineries, whether licensed or not, face a complete ban on direct shipment. The differential treatment requires all out-of-state wine, but not all in-state wine, to pass through an in-state wholesaler and retailer before reaching consumers." The New York regulatory scheme differed from Michigan's in that it did not ban direct shipments altogether. Out-of-state wineries were instead required to establish a distribution operation in New York in order to gain the privilege of direct shipment. This, though, was just an indirect way of subjecting out-of-state wineries, but not local ones, to the three-tier system.