Federal appeals court affirms Indiana's right to limit underage access to alcohol
INDIANAPOLIS - The Wine and Spirits Wholesalers of Indiana (WSWI) praised today's decision by the United States 7th Circuit Court of Appeals which recognizes Indiana's vital interest in and efforts to keep alcohol out of minors' hands. In Baude v. Heath, the appeals court overturned a district court's decision to eliminate the requirement for initial face-to-face transactions in alcohol purchases. This appeals court decision reinstates the need for proper age verification in instances where wineries, and other alcohol manufacturers, may ship products directly to consumers.
Jim Purucker, executive director for WSWI, said, "Since the 21st Amendment passed 75 years ago, Indiana, like many other states, has relied on an effective alcohol distribution system with safeguards in place to keep minors from purchasing alcohol. Without the face-to-face transaction requirement, a minor could easily order alcohol from a winery online or over the phone, and have the alcohol delivered to his or her doorstep - all without legitimate age verification and with no accountability for the persons selling or delivering the alcohol. We are pleased the appeals court ruled strongly in favor of maintaining the face-to-face transaction requirement."
Indiana employs a transparent and accountable three-tier alcohol distribution system requiring alcoholic beverages to be distributed from a manufacturer to a state-licensed wholesaler and then to a state-licensed retailer. In addition to successfully limiting underage access, this system is designed to protect tax collection and product integrity, as well as broaden consumer choice.
This case was initiated by a Michigan winery and a group of wine hobbyists to overturn Indiana's laws involving direct shipment of wine from manufacturers to consumers. The appeals court rejected the plaintiffs' claim that the face-to-face requirement discriminates against out-of-state alcohol manufacturers and that it does not serve a legitimate state interest.
The appeals court rejected the plaintiffs' argument that the face-to-face requirement is not needed because minors will find a way to bypass the system. According to the court's opinion, a legal system can still have legitimate benefits even if it's not foolproof. The appeals court said, "The face-to-face requirement makes it harder for minors to get wine. Anything that raises the cost of an activity will diminish the quantity - not to zero, but no law is or need be fully effective."
The appeals court affirmed the district court's ruling in favor of allowing those wineries who currently can ship products wholesale to retailers, to now ship wine products directly to Indiana consumers ordering over the Internet or by phone. WSWI was disappointed in this decision to expand the number of wineries allowed to ship directly to consumers. Fortunately, however, the face-to-face rule on the first transaction will apply for these wineries, as well.
"By allowing more wineries to obtain direct-to-consumer shipping permits, Indiana minors may have more opportunities to illegally purchase wine over the Internet or phone," Purucker said. "Thankfully, we maintained Indiana's face-to-face rule, and that measure will help limit minors' access to alcohol."
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The Wine and Spirits Wholesalers of Indiana (WSWI) is a not-for-profit trade association representing the state's leading alcohol distributors, including Olinger and National Wine and Spirits. The organization supports Indiana's legitimate interest in regulating alcohol distribution to maintain public safety, consumer protection and consumer choice. The mission of WSWI is to maintain Indiana's three-tier distribution system as an effective means for advancing this interest.