Exactly what I was thinking. You guys are acting like these other retailers were breaking the law out of the goodness of their heart. Give me a break; they are trying to make MONEY just like Wine.com!!
Despite the negative PR for Wine.com, we can see there’s a lot of energy on this issue. Maybe there’s a way to channel it into some positive change.
Wine.com has taken a lot of criticism over the last few days, some of it very personal and unprofessional, and most from anonymous sources who do not disclose their full name or the companies they represent. Remember that behind Wine.com is a team of good people who are passionate about wine and how the Internet can help people enjoy it. The Wine.com team spends incredible time and energy trying to better understand our customers and how we can serve them. That is the foundation of our business strategy. Our strategy has never counted on state shipping laws changing, because while that would be nice if it happened, it is not something on which we can depend.
Also, remember that there are two sides to every story, so here is ours. Wine.com wants two things:
First and foremost, open markets. We’d like to see all states open up to interstate shipping of wine. This would be best for consumers, best for the health of the online wine business and best for Wine.com and our customers. As an example, Virginia recently did this, and we applied for and received a direct shipper’s license from the state and immediately closed our Virginia warehouse. We now serve Virginia customers from our Florida warehouse, which offers a better product selection and lower prices than we were able to offer from within Virginia. We collect and pay sales tax to the state of Virginia. We’d like to see other states follow suit, but are concerned with the developments in Illinois and Texas, which appear to be headed the opposite direction. (People often confuse wineries with retailers when discussing state shipping laws – we’re focusing here just on the issues pertaining to retailers).
Second, we want fair competition. How would you feel if the government required you to spend millions of dollars every year to comply with its laws, while letting your competitors play for free? Whether markets are open or closed, we believe all retailers should be playing by the same rules. It is not right for states to selectively enforce their laws, causing increased cost and complexity to some while others fly under the radar. It is also not good for our customers, as the costs of compliance and collecting and paying state sales tax makes us uncompetitive in many states. As an example, in 1999 Washington notified Wine.com (then operating as eVineyard), that it must stop selling and shipping to Washington consumers from outside Washington. Wine.com ceased selling to Washington consumers, then opened up a warehouse in Washington and applied for and received a retail license to sell wine in Washington. We buy from Washington wholesalers, collect and pay Washington sales tax and service Washington customers in this way. We have patiently waited for eight years for the state to either open up to out-of-state shipping or enforce their laws with other retailers, but nothing has happened. With the exception of a handful of reputable retailers, nearly all others ship into Washington without a license, local store or sales tax. This is not fair, and puts our customers and stakeholders at a disadvantage.
Today, Wine.com finds itself with neither open markets nor fair competition – most states are both closed to outside shipping and unfair in their enforcement of the laws on their books. After nearly a decade of waiting for and asking states to either open up or fairly enforce their laws, incurring literally millions in extra costs not incurred by our competitors, we’re ready for change. The status quo is no longer an option. So what can we do?
One option is to play by the same rules as most other online retailers – ship illegally and don’t charge sales tax. We don’t like the state laws and they’re rarely enforced, so let’s ignore them, close all our local distribution centers, ship from a central location to a larger number of states and not charge sales tax. Selling to more markets, and at lower prices without sales tax, we’d instantly grow our revenues. And without all the local warehouses and the complexity of running separate inventory and websites for each state, our costs would decrease and our profitability would improve. Believe me, there are days when this looks like a pretty good option. But we haven’t gone there, because if wine is going to be a viable and legitimate online category and grow and thrive in the long run, we think it’s got to be done the right way. This means operating within the law to serve our customers, while working to change the laws with which we all seem to disagree.
Some have suggested we join lobbying efforts by other retailers, specifically the Specialty Wine Retailers Association. While we encourage those efforts and don’t begrudge people donating to that cause, we believe it’s fundamentally flawed to lobby for changing laws you are currently breaking. We don’t buy the argument that it’s okay to ignore the laws just because they’re outdated, not consumer-friendly and difficult/costly to implement. If we throw our hat in that ring, we lose the opportunity, as a licensed, tax paying retailer in a given state, to have a meaningful and productive dialog with that state. We will join the SWRA the minute they establish a code of conduct that requires its members to operate within the law. Only then can that organization gain the credibility it needs to make a difference.
Others have suggested we launch our own lobbying efforts, and that is the path we have chosen. We have approached several states, in which we have legal standing, and asked regulators to consider our situation. We have described our operating model and costs of compliance with their laws, and we have pointed out that we are one of a small number of companies who comply with those laws. The only way to base this argument on facts was to place orders from other online retailers who are actively and publicly soliciting customers in other states (see Google), in order to confirm they do in fact ship to those states. We did not single out or target any particular retailers, because the list of illegal shippers is large. (We need to correct a mistake in an earlier article from Wine Market Report, who stated erroneously that BevMo! ships illegally. That is not our belief – in fact they appear to be one of the few companies who, like Wine.com, are working within the law). We also did not approach states anonymously, but made it clear who we are and why we feel the need to take action, even if that means some negative PR or response from others with a vested interest in the status quo. We have asked the states to either: 1) open up to out-of-state shippers, so we too can do business without the costs of compliance, or at the very least 2) fairly and consistently enforce the laws they currently have. We have made it clear that we’ll accept either outcome. The only thing we can’t accept any longer is the status quo -- closed markets and unfair enforcement.
We can’t predict whether a state will take action or which course they’ll follow. Some appear to be interested in opening up, others in fairly enforcing their current laws. While we understand our actions will not be popular with folks who are benefiting from the current state of affairs, we owe it to our customers and shareholders to take a more proactive approach than we have in years past. We are willing to take risks to challenge the status quo, including negative PR. But we also suspect a lot of consumers may be unaware they are currently buying from companies who ship illegally, and when they find out, they may prefer to buy from someone who is compliant with state laws. For example, many of our customers are corporate gift givers, and we think they deserve to have a legal way to purchase wine gifts for their clients.
Wine.com has been accused of and called a lot of things over the last couple days. That can be expected from those who currently benefit from illegal shipping. But if you’re going to criticize us so vehemently, at least have the courage to disclose your full name and the company you represent, rather than hiding in anonymity and throwing in grenades from the sidelines.
We don’t expect everyone to rally around the cause of fair enforcement of the current state shipping laws. But we should be on the same side with regard to opening up more states to out-of-state retailers, so take some of the energy we’ve seen over the last couple days and focus it on your state regulators.
Good luck, Rich and Mike. I see nothing wrong at all with protecting your business interests from others' illegal actions.
Just one more sip.
Thanks for the response, but my business will go elsewhere. I think that the tactic employed here was just crappy any way you look at it. Surely there could be a better way to channel your efforts.
I'm sure many of the posters that support wine.com's actions would also have been in favour of slave.com blowing the whistle on those running the underground railroad. They were breaking the law, weren't they? Well then it would have been fine to entrap/report/punish them accordingly...right? Vastly different laws of course, but the concept of violating a law that many consider to be unjust/corrupt, vs. reporting those that violate such a law are pretty much the same.
The laws are (for the most part) in place for one reason - because powerful lobby groups with lots of money want to prevent competition. They want to do this so that they can make more money than they would otherwise be able to within their own states. Like all protectionism, a very small number of parties (retailers...and politicians that receive large contributions, or a bunch of free wine/booze) are benefited, to the detriment of a very large number of parties (consumers)...and for the point of this argument I am ignoring that some wine retailers may be public companys with many shareholders that benefit from this type of action. Unethical lobbyists throw money at unethical politicians, laws get passed, consumers are hurt. Of course, I am sure that some wacko religious jurisdictions have their own reasons for passing similar legislation, but I assume that protectionism is the main reason behind the vast majority of such legislation.
From what many have said, wine.com does not have competitive prices. However, by reducing competition, average prices across the country will presumably increase, will they not? If so, won't wine.com's prices all of a sudden be more competitive? Will they (and a lot other retailers, except those that suddenly lose a large part of their customer base because of shipping laws) make more money? And where will this money come from, will it not come from the pockets of consumers? Wine.com might argue that they have spent money to get the infrastructure in place in compliance with the new laws, and their actions justify their reporting of violators and other actions...or maybe they were part of the lobby groups that pushed for the legislation (or, once their infrastructure was in place, did not join in any efforts to have the legislation overturned...after all, if they were set up to comply with the law, and if the law increased prices and made them more competitive, why would they want to get the laws overturned, that would just make prices more competitive and lower their revenues). I am probably wrong on this of course, I am sure that wine.com is at the forefront of participating in the industry groups that are seeking to have such laws overturned.
Wine.com is not doing anything illegal by reporting violators, just as slave traders/owners would not have been doing anything illegal by reporting those that were operating the underground railroad. Many people disagreed with the laws regarding both of these topics (obviously some or many do not disagree with those laws). It is also not illegal to express disapproval over wine.com's actions, or to publicly voice such an opinion (in a non-libelous/non-defamatory manner of course...and some appear to have crossed this line I think), or to say they will not buy from wine.com. Many people here seem to be taking the approach that because a law is in place, that law must be followed...or at least that that law should not be violated, or that there is nothing wrong with reporting the violators of the law (and it seems pretty clear that those that make this point do so while ignoring whether or not the law is a just law...and that is fine, as long as they would be willing to apply that approach to similar discussions regarding any other laws, i.e. my slavery example). Seems to me that speaking up about what is considered to be unjust (or refusing to follow laws considered to be unjust) helped make your country what is is today. What would your country be like if your forefathers thought like you did? Think about that while you have a cup of tea and curtsy to the queen.
"No TV and no beer make Homer...something, something"
Machine- while many will likely attack you for attempting to compare such vastly different situations, claiming that slavery was an attack on race and freedom (hmmm... partly similar),you're overall shot is not far off the mark IMO. Surely, I have respect for wine.com coming to their own defense and stating it professionaly and concise. This issue, and other's responses to this debate are justifiably addressed in your remarks regarding how we, as a people, resist government controls and intervention and attempt to change things in today's political structures. It's not JUST this issue, it's part of a 'bigger picture'.
Like you, it is MY right to NOT respect their approach to the situation and to NOT support them as a consumer. Didn't before, certainly won't now. My choice.
All of you self-righteous chest-thumpers need to get off your high-horses. It is ridiculous for you to suggest that wine.com's actions are "morally wrong." This is a knee-jerk reaction that really suggest either ignorance or sloppy logic.
You're either FOR the rule of law or you're against it. As a society, we are obligated to obey the laws that are on the books. PERIOD. END OF DEBATE. If you have a problem with the law as it is written, write your Congressman, join a lobby, run for office, etc. Advocation of breaking the law is advocation of lawlessness. Sure the law might be stupid or makes no sense, but who are YOU to decide which laws to break and which to obey? That's a slippery slope that a society of laws cannot afford to approach. The moral thing to do is to OBEY the law. I cannot believe that anyone with even a shred of intellect would suggest otherwise.
And if you believe in capitalism, then you surely see why wine.com has taken the position that they have taken. It is unfair to expect them to obey the law while competing with companies that do not (for greater illegal profit).
All of this reminds me of my law school's Honor Code (and every law school in the nation and most of the undergraduate schools have similar policies): Cheating AND tolerance of cheating are equally offensive. If you know someone is cheating and DON'T turn them in, your offense is JUST AS BAD as the cheater.
If you don't understand this, then I suggest you take a refresher course in morality.
This ain't the playground, folks - this is life. Tattletales aren't the problem -- then lawbreakers are!
Je ne peux pas penser à une signature intelligente
You just had to bring Slavery into this didn't you? Now Indybob is for sure going to enter this thread and tell everyone that we are racist for a) reading this thread, b) replying to this thread or c) not thinking just like he does.
pissing people off since 1971!
Censorship reflects society's lack of confidence in itself. It is a hallmark of an authoritarian regime. ~Potter Stewart
Apologies, I just tried to think of something that was legal but morally offensive, and I was pretty lazy...maybe should not have used that example, but I think the concept of disagreeing with a morally questionable law vs. supporting that law because it is in fact a law is the same.
"No TV and no beer make Homer...something, something"
Distrust of authority should be the first civic duty.
We all have a moral obligation to break stupid laws (or something like that).
If the people will lead, eventually the leaders will follow.
If you attack Stupidity you attack an entrenched interest with friends in government and every walk of public life.
The two most common elements in the world are hydrogen and stupidity.
Just a little food for thought, appropos of nothing and everything.
I agree with this:
But this is just wrong:
We may have a moral obligation to seek change of stupid laws, but it is immoral to ignore the rule of law!
Je ne peux pas penser à une signature intelligente
Agreed, but if a stupid law is in place (for the sake of this argument I will say that the protectionist laws are stupid/unjust), and you have a choice between making efforts to correct that law (when in reality that law benefits you by limiting competition) or in finding, entrapping (if this happened), and reporting those that violate the stupid law, what should you do?
"No TV and no beer make Homer...something, something"
"An individual who breaks a law that conscience tells him is unjust, and who willingly accepts the penalty of imprisonment in order to arouse the conscience of the community over its injustice, is in reality expressing the highest respect for the law."
Slightly different, but in the same neighborhood. Thank you MLK, RIP.
There's a huge difference between breaking the law to make a buck, and liberating people. It's pathetic to think these retailers are breaking the law in order to protect your civil liberties.
ich Bergsund Wrote:
"First and foremost, open markets. We’d like to see all states open up to interstate shipping of wine. This would be best for consumers, best for the health of the online wine business and best for Wine.com and our customers."
On this Mr. Burgsund and I agree. There is no question that what's best for Wine.com, the American Wine and industry and, most importantly, the American wine consumer, would be an open national market where consumers could seek out, purchase and have shipped to them the wines they want.
So allow me to educate you, Mr. Burgsund, on exactly how that is going to happen.
Only rarely will it happen via lobbying efforts. For example, in Oregon lobbying by retailers and wineries helped prevent a move by wholesalers from prohibiting Oregonians from purchasing wine from out of state retailers. It was a shame that Wine.com did not show up to lobby on behalf of consumers in Oregon. Meanwhile, Specialty Wine Retailers was there, testifying before committees, communicating with the media and reaching out to consumers.
Where was Wine.com?
But lobbying usually won't help the effort to allow consumers to buy directly from out of state retailers. Illinois is perfect example. The power of the wholesalers was on display in Illinois last year when they were able to ram through legislation that will prohibit Illinoisans from purchasing wine from out of state retailers.
Nevertheless, Specialty Wine Retailers Association was there testifying in front of committees, getting amendments to the legislation introduced, working the media, generating letters from consumers to legislators and working with local retailers. At the very least, we certainly raised the awareness of this issue.
Unfortunately Wine.com was no where to be seen during the Illinois battle. It would have been nice to have you there. It would have been nice to have Wine.com alert its Illinois customer base of the issue at hand. It would have been nice to have Wine.com urge its customers to write their state representatives.
But Wine.com was not there.
The fact is, if the laws are going to be changed in America to allow the growing number of wine lovers to purchase wine and have it shipped to them from retailers across the country, it's going to take a well crafted legal strategy that leads to a federal appeals court explaining to the wholesalers and the states that the principle of non discrimination announced in the Granholm Supreme Court decision does indeed apply to retailers as well as wineries.
If Wine.Com would really "like to see all states open up to interstate shipping of wine" the only way it will happen is though a litigation strategy.
The only organization carrying through on that strategy is Specialty Wine Retailers Association, an organization of brick and mortar retailers, wine clubs, auction houses and, yes, Internet based wine retailers.
This is the same organization, Mr. Burgsund, that Wine.com is very familiar with. It is the organization that Wine.com said "NO" to when asked to join and asked to donate to the cause just like MANY of your peers in the wine retailing business have done.
So despite Wine.com's absence from the fight we go forward with a critical lawsuit in Texas. Whether we win or lose a the district court level, the case will be appealed and SWRA will be there to continue this important fight.
Now, I would not presume to question your belief that an open market for wine is best for consumers. And I would not presume to think that your company's reason for not helping in this cause is due to the fact that the more states that do pass restrictive shipping legislation is actually good for Wine.com's bottom line given that it lessons the competition you face.
However, I will presume one thing:
When Specialty Wine Retailers Association is successful in using the courts to overturn the restrictive and unconstitutional laws that prohibit consumers from purchasing and having wine shipped to them, that Wine.com will give a hearty thanks to those OTHER wine retailers that ponied up the money to make it happen.
After all, as you point out such a turn of events would be "best for the health of ...Wine.com."
If by chance you are willing to pay your fair share of this effort now, rather than waiting for other wine retailers to contribute the millions of dollars it will take to pursue a change in the laws in a way that would be "best for the health of Wine.com", I'd be happy to have a conversation with you to determine just exactly how much Wine.com can contribute to the effort.
My contact information is below.
Specialty Wine Retailers Association
One has to love "put up or shut up" posts.
Will the Right Honorable Mr. Burgsund start to contribute to the cause? Or will he instead have his attorneys draft a mealy-mouthed, weasel-worded response to your challenge? Or?
So you are suggesting that most of us who have been critical of your company's actions here and elsewhere are nothing more than paid shills for your competition?
There is a famous book by Dale Carnegie you should read.
fred doesn't own a business.
Just one more sip.
You do realize the British lost the war.
Now, would you care to disclose all the “tea” you have shipped to SC and then transport across state lines?
It's good to try them young too and then let them age - James ********
Infanticide can be very satisfying - Robert Parker
I drink mine young to avoid disappointments - James Laube
This is the best thread I've seen in a couple years. I have to say that I will not support wine.com and I think thier approach to this issue is childish at best. Besides, with the prices they ask for the wines; why would you support them? Since I am throwing rocks from the sidelines...
The Old Inn On THe Green
This has nothing to do with their prices.
Just one more sip.
I know that fact, just why would you buy at inflated prices?
One point that may have been made already...there are many complaints that wine.com has non-competitive prices, and many complaints that people will not buy from wine.com anymore because of their actions...just wondering how much effect it will have if the more astute wine buyers (who presumably know where to find a good deal on wine) resolve to not buy from a supplier from whom they would likely have rarely/never purchased from anyway?
"No TV and no beer make Homer...something, something"
The fact that wine.com is not as competetive in their pricing as many others is certainly not the crux of this thread, IMO. It's how we, either individually or as a group, support or resist laws that are put in place by a non-majority rule. I've great appreciation for the writings of Thomas Jefferson. One of which is:
"The will of the people... is the only legitimate foundation of any government, and to protect its free expression should be our first object." --Thomas Jefferson
Now before all the lawyers of this forum jump on me (as one can clearly see who they are, by their posts) Jefferson was a great supporter of obeying the laws set forth. I can appreciate that. However, in our day and age it takes more than 'lobbying efforts' to get the government of today to take note.
I applaud the efforts of the SWRA and their membors. THESE types of retailers I would enjoy supporting. I see nothing from W.com that makes me want to support their efforts in any way, shape or form.
GPN: Strong words. Unless you follow EVERY law in our nation to the letter, you're setting yourself up to be a complete hypocrite. Let your conscience be your guide.
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