I read a post by my friend Jo Diaz, discussing the problems of how we as wine consumers can go about selling a bottle of wine that's in our possession. In her article Jo suggested two well known auction houses. I proceeded to write a detailed comment on her blog, which the capricious software elected simultaneously to reject and delete. Rather than spend the time typing it all in again there I thought I'd answer here instead.

As a private individual you are faced with two distinct problems: firstly, that it's typically illegal to sell wine that you own without a licence* and secondly that it's not simply illegal to ship wine, it is in fact one of only two ways that you as an individual can violate the US Constitution. The 21st amendment - possibly the most tersely worded piece of legislation since the ten commandments - section 2 states: The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.. Incidentally, if you're curious, the only other way that you can violate the constitution is to enslave someone. Of course if you get your slave to deliver the wine then by the legal principle of duos nefas correctum you're probably okay. But I digress.

The simplest, legal way to sell your wine is therefore to contact a local wine retailer who specialises** in such things. In the Bay Area, one such retailer is K&L Wines; they have an entire department dedicated to purchasing private collections. They typically prefer to buy entire cellars rather than individual bottles, so this may not be ideal for someone seeking to sell off a few extra bottles. You will also need to demonstrate provenance; that the wine has been stored appropriately and how you acquired it.

The other legal way its to use a licenced wine auction house. There are several around, but the best known among collectors is probably WineBid. You will need to ship or deliver the wine to them to be appraised; since they are licenced they will provide appropriate paperwork which means that it's they who are legally responsible for shipping (although you are the one who pays). Since it's an auction you can't negotiate a price up front, though you can specify a reserve. However if the wine fails to sell due to too high a reserve there may be a fee to pay. You will also pay a commission of around 15% to 25% of the "hammer price" when the lot is sold. As with retailers, many auction houses don't like to deal in small lots, so there may be a minimum amount that they will accept. It may also takes some weeks before you receive the money for your sale.

There is a second type of auction house which is unlicenced; the best known is WineCommune. This operates in a similar manner to sites like eBay; they simply connect buyers and sellers; they take no responsibility for the legality of the transaction. The benefit is greatly reduced commission fees (around 3% to 5%), but the trade-off is that there's very little comeback. Since selling without a licence is illegal you're breaking the law and there have been instances where the authorities have fined sellers, though these have apparently been people using the service extensively rather than casually.

The last option is a private sale on an online wine forum. There are many discussion forums (or fora, depending on your preferred level of pedantry) which include a commerce or trading area. The benefit of these boards is that you're likely to agree a price close to the real value of the wine without paying commission charges. However it's a good idea to establish yourself as a member of the board before offering wines for sale; the boards can be suspicious of (and merciless to) brand new users posting lists of wines for sale.

If you choose to use either of these latter approaches you hit the second snag: it's illegal to ship the wine without a shipping licence once you've sold it. Carriers won't even accept a shipment if they believe it contains alcohol. So unless you have a contact with a shipping licence you need to be creative. A common approach is to label the package as containing some other liquid, such as Olive Oil; another way is to disguise it using boxed previously used for some other purpose. Either way, rather than taking the package to a carrier's office it's generally considered safer to leave it to be picked up, especially if you work for a large company that has a daily collection. Even so, there have been instances where packages have been intercepted and destroyed, so be aware, particularly when shipping to states with more draconian rules.

So there you have it. You can either pay huge fees, accept a fraction of the wine's value or become a criminal.

* I'm British. That's how it's spelled. And wile we are on the subject, there's a U in Colour.
** See previous. It should be a S not a Z***
*** Which is pronounced "Zed" like "bed"

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If you haven't read about HR 5034, also known as the Comprehensive Alcohol Regulatory Effectiveness (CARE) Act of 2010, you should. It's a bill that would have a profound impact on consumers and wineries, leading to increased prices and winery closures. Although there is widespread opposition to the bill it's also gaining support.

I'm not a lawyer nor do I play one on TV, and I didn't sleep at a Holiday inn last night. So I urge you to get the facts and make your own minds up, but here is my understanding.

The problem goes back to the repeal of Prohibition and the passing of the 21st amendment. Unlike most legal stuff it was brief and plainly worded. It says:

• Section 1. The eighteenth article of amendment to the Constitution of the United States is hereby repealed.
• Section 2. The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.

Following this, various states set up alcohol distribution systems that were either owned by or regulated by the states. The 3 tier system was born: producers sold to wholesalers, wholesalers sold to retailers, retailers sold to customers and everyone got to make a profit (except the customer). For a long time nobody really cared too much; there was relief that prohibition was over and most people purchased their beer, wine and spirits from their local stores. Since the distributors controlled the flow of alcohol they got to become rich and powerful, and effectively stifled competition by merging and lobbying.

The recent winery boom began to challenge this. Small wineries like to interact directly with their customers; the profit margins are higher and the customer establishes a connection that goes beyond mere brand loyalty. If there's a problem with the wine due to flaws or bad shipping the winery can deal with it personally. It's good for the winery and the customer.

But not the wholesaler. They see this as a challenge. Despite the fact that it's a tiny fraction of the overall market, it's their market and they want to keep that fraction. The problem eventually reached the Supreme Court in the case of Granholm V Heald which effectively said that the 21st amendment did not give a state the right to treat wineries within the state differently from those based in other states.

HR 5034 (which was drafted by the National Beer Wholesalers' Association, or NAMBLA) would effectively overturn the Granholm V Heald ruling, granting each state the right to regulate alcohol however they see fit, regardless of the commerce clause. It also amends the 1890 Wilson act, which states "that all fermented, distilled or other intoxicating liquors or liquids transported into any state or territory" are subject to the same rules as alcohol produced within the state. This would greatly strengthen the wholesalers' position and allow the states to prevent wineries from shipping to customers.

Laws designed to limit alcohol shipping are often claimed to have the aim of preventing minors from accessing alcohol. But how many minors buy alcohol over the internet? HR 5034 would allow states to make it illegal for wineries and retailers to ship alcohol to adults. Meanwhile firearms collectors and dealers are still allowed to ship guns. Tobacco retailers can ship cigarettes and cigars. Pharmaceutical companies can ship prescription drugs. Does that make sense? You could buy a Smith and Wesson, but not a Smith-Madrone? Viagra but not Varner? Montecristos but not Montallegro?

HR 5034 is a terrible bill that would be disastrous for small wineries such as those in the Santa Cruz Mountains, but don't just take my word for it. Rep Mike Thompson (D-CA), co-chairman of the Congressional Wine Caucus says it would "devastate California’s and other states’ wine industries, stunt economic growth, and harm consumers by allowing discriminatory law and regulation to be passed and go unchallenged."

What can you do? Write to your Representative, asking them to oppose the bill.
Free The Grapes has a Write Your Congressperson web page that lets you do this automatically.
Send a fax to the office of the House Subcommittee on Courts and Competition Policy at (202) 225-3673.
Become a fan of the STOPHR5034 page on Facebook

What's your view on HR 5034? Have you heard back from your Congressperson on whether they will oppose it? Let me know in the comments.

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