Do U.S. State Laws Affect per Capita Wine Purchases?

Abstract

Since Prohibition ended, states have adopted laws in several domains pertaining to the production, distribution, marketing, and sale of alcoholic beverages. These include distribution franchise laws that address the rights afforded to distributors relating to managing the supply chain, and beverage control laws, which provide some states with a monopoly over the wholesaling or retailing of alcoholic beverages. In this article, we focus on the effects of these state-by-state regulations on wine sales, and also consider wine-specific laws that allow or regulate wine tasting or apply to discounting and promoting wine sales through rebates or coupons. Anecdotal evidence suggests that prohibitive regulatory legislation may reduce wine sales. Thus, we tested for differences in per capita wine purchases in 2007 and 2008, as well as for differences in statewide sales of domestic and imported wine. Results indicate that statistically significant differences are associated only with wine-tasting legislation; states that allow wine tasting experience higher per capita wine sales. These findings suggest that wineries are not impacted negatively by laws related to distribution. However, wineries in states that do not allow wine tasting would do well to consider working with government officials to create a legislative framework allowing it. This research also lays a foundation for testing other legislative effects on consumer behavior related to wine sales.