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Wine sellers charge "gangster tactics" by Liquor Commission over shipping sales

  • The New Hampshire Liquor Commission is announcing plans to build a new, 19,000-square-foot, state-of-the-art New Hampshire Liquor & Wine Outlet in West Lebanon. Pending local approvals, construction for the new store, which will be more than double the size of the existing location and provide added shopping amenities for customers, will begin in Spring 2018. The existing store located in Powerhouse Plaza will remain open during construction to allow uninterrupted shopping. Above is a photo of the new Bedford New Hampshire Liquor & Wine Outlet, which the new West Lebanon location will closely resemble. (Photo courtesy New Hampshire Liquor Commission)



Monitor staff
Monday, May 07, 2018

A national group of wine sellers is accusing the New Hampshire Liquor Commission of abusing its power and using “gangster tactics” to block wine shipments from out of state, the latest in an ongoing spat between the two groups over sales.

In a strongly-worded statement Monday, Tom Wark, executive director of the National Association of Wine Retailers, took aim at the commission’s move to block the sales of 80 out-of-state sellers from shipping into the state.

According to a Liquor Commission spokesman, the sale bans have been enacted against vendors who were unfairly competing with the commission, which regulates the sale of all alcoholic beverages in the state and operates stores.

But Wark said the commission itself was acting unfairly, accusing the commission of taking actions “reminiscent of the bootlegger and gangster tactics during Prohibition.”

“Without warning, without explanation and in clear defiance of the Legislature, the New Hampshire Liquor Commission has begun denying direct wine shipping permits to all out-of-state wine retailers and wine clubs,” Wark said. “This is a clear abuse of power and a usurpation of legislative powers.”

At the heart of the conflict is New Hampshire’s role as a “control state” – one where the state has sole authority of sales. In 2003, the state became the first of 17 control states to allow out-of-state shipments of alcohol, according to commission spokesman, E.J. Powers.

The idea, Powers said, was to allow niche wineries access to the New Hampshire market, even if their product base is too small to be sold in a Commission-approved venue like an outlet or supermarket. If a Granite Stater found a winery they liked in California, he or she could go online and buy it from home.

But over the years, larger retailers have used the new rule to sell popular brands that Liquor Commission outlets do stock – but directly to consumers, Powers said. That meant the Commission could not reap the profits from those sales, the bulk of which pass on to the state general fund as revenue.

“This practice harms the bottom line of New Hampshire grocery and convenience stores, small retail wine merchants and, yes, the New Hampshire Liquor Commission, which delivers critical funding to support essential state services,” Powers said.

He added that the number of retailers blocked numbered 80 out of a total 1,069 retailers permitted to ship to the Granite State. “The vast majority of wineries shipping to New Hampshire (nearly 1,000) and their customers will not be affected,” he said.

But Wark and other critics have pointed out that those 80 make up some of the largest retailers. And they say the move is a political tactic.

A bill proposed by Senate President Chuck Morse, R-Salem, and supported by the Liquor Commission, would have allowed the Liquor Commission to take action against out-of-state wine retailers that it deems unfairly competes with the state.

That bill, Senate Bill 353 – an extension of legislation passed in 2017 – was ultimately tabled by the Senate. But the Liquor Commission took action against the retailers anyway, in what was Wark called a “vindictive and likely illegal act.”

Powers countered that the action was supported by the 2017 law and that it was limited.

The legislative fight is not quite resolved. In a late amendment last week to House Bill 1626, an unrelated Liquor Commission bill, Sen. Donna Soucy, D-Manchester, added in language that would allow the Commission to prevent shipments from non-reciprocal states – states that don’t themselves allow New Hampshire retailers to ship alcohol to them.

Powers called the amendment common-sense. “If states allow New Hampshire businesses to ship to them, then we should allow their businesses to ship here,” he said. “Conversely, if states don’t allow New Hampshire businesses to ship to them, we don’t think we should allow their businesses to ship here.”

Wark disagreed, calling it “blackmail.”

“Either adopt this new anti-consumer, anti-competitive direct shipping rule or we will deny direct shipping permits to all out-of-state retailers and deny New Hampshire residents from purchasing any wines from out-of-state wine clubs and wine stores,” he said, describing the amendment.