New Law in Ohio May Not Protect Wineries as Well as Originally Thought

You have to give Ohio's elected leaders credit for trying when they quickly added to the budget a proposal by the state's Wholesale Beer and Wine Association that was intended to help and or protect Ohio Wineries, but a second look says that may not be the case.

The concept put before elected leaders sought to ban direct shipments to Ohio from wineries that produce more than 150,000 gallons of wine per year. The thought was that if Ohioans prefer wines that come from sources outside the great state of Ohio, the thought would be to make them purchase them from an Ohio licensed store as opposed to the convenience of direct shipment.

On the surface this appears to be a wise and sensible way to protect the interests of the many fine wine producers of Ohio, but a deeper look suggest that now the government has their hands in the pot so to speak and firmly on the free market approach, logic dictates that once the dust settles from the initial adjustment period, something quite unexpected will most likely occur, and that would be prices of these wines actually going up, possibly way up.

In essence, with the production ceiling being 150,00 gallons, that cuts off a great many producers, 100 from California alone, that have been direct shipping to those in Ohio that have a taste for California vino. Whats the big deal you ask? Won't this push consumers to Ohio wines quickly? Not necessarily as the first drawback is that whenever supplies are limited it drives prices up, the simply concept of supply and demand.

Ohio also has a three-tie system that I am all to familiar with from my days in the wholesale beer business that will force Ohio consumers to purchase their now limited wine preferences from within. Simply put, wine wholesalers can mark up bottles at the very least 33.3% before it goes to retail, which retailers can add another 50% or more to.