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Direct Shipping Laws, Wine and Societal Welfare

Robert Eyler Ph.D (Director, Center of Regional Economic Analysis, Assistant Professor, Department of Economics, Sonoma State University, 1801 E. Cotati Avenue, Rohnert Park, CA 94928–3609)

International Journal of Wine Marketing

ISSN: 0954-7541

Article publication date: 1 February 2003

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Abstract

Direct shipping laws restrict the amount of wine traded between states in the United States as well as international trade in the wine industry. The effects of these laws are twofold. First, they restrict consumer choice, through higher prices and fewer goods available. This is the classic way in which barriers to trade reduce consumer and societal welfare. For the international wine company, marketing and distribution costs rise due to the fact that certain markets are not directly available. For all potential exporters to the US. these direct shipping laws add to difficulty in competing and reduce availability. The data show that the elimination of the laws would reduce prices, increase quantities sold, and increase competition in wine, especially through direct shipping. These laws affect firm choice on product delivery and market penetration.

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Citation

Eyler, R. (2003), "Direct Shipping Laws, Wine and Societal Welfare", International Journal of Wine Marketing, Vol. 15 No. 2, pp. 25-36. https://doi.org/10.1108/eb008754

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MCB UP Ltd

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