Amazon will start selling and shipping wine to Iowa

Amazon.com has announced that its new online wine marketplace will make more than 1,000 wines available to California, Connecticut, Florida, Idaho, Illinois, Iowa, Nebraska, Nevada, North Carolina, Oregon, Washington, Wyoming and the District of Columbia. Iowa is one of the first states to be able to participate in Amazon’s venture. The shipping costs are as low as $9.99 for six bottles. Although Wine.com ships wine online, and includes foreign-sourced wines as well, it does not ship to Iowa. I suspect that part of the problem is that Wine.com includes shipments of wine from France, Italy, Spain and Australia.

Recent court cases forcing states to open up their markets to wine made in other states may not apply to foreign wine producers. If it is the restriction to U.S. wines that makes the Amazon venture possible then that would be a shame in a way because some of the best, lease expensive, and hardest to get wines come from overseas. On the other hand, almost every time I read about a great American wine in some publication it is almost always something that I’ve never seen in a store. Allowing people across the country to see a review of a wine and to instantly order a case will increase consumer demand. That said, I doubt that it will result in much reduction in wine purchases at most local retailers (such as Hy-Vee). Here is why. The vast majority of wine purchases are reportedly made within a few hours of consumption. Bob or Brenda know they have some friends coming over for dinner and Bob stops off a the store and buy a bottle or two. If this is how Bob and Brenda buy wine then I doubt that they will have the presence of mind to order that same bottle from Amazon far in advance of that party.

If Amazon offers enough high quality wines (see my discussion on that below), the market that might be hit harder could be be the specialty wine stores. If the selection is broad enough, retail buyers may in fact load up on wines that they read about either online or in their latest issue of Wine Spectator or Food and Wine magazine. They will order the wine from the comfort of their living room couch and leave no room in either their schedule or their wine rack for a special trip to the local liquor store to hunt for those bottles.

A quick check of the different wines currently offered makes me think that for now this is not a huge threat. I checked for Pinot Noirs from Sonoma County, California and found 17 wines being offered, ranging in price from $21 to $60. You can also search by rating and only one had a rating above 90, a 2010 Viszlay. Similarly, only one 90 plus point California Cab was for sale, a $47 2008 Long Meadow Ranch Estate.

One market that will really be affected will be those wine producers lucky enough to get a lot of publicity for a particular run. Wine sales through Amazon could be practically instantaneous. If the mention was warranted, I’m sure that the Amazon algorithms will keep those buyers coming back until the supply is exhausted. I can see a lot of frantic activity by wine marketing consultants right now trying to position some of the smaller producers to take advantage of this new marketing opportunity. Imagine the cross-marketing and branding discussions going on right now.

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5 thoughts on “Amazon will start selling and shipping wine to Iowa

  1. Did Iowa change the laws in 2012/13? Wine.com used to ship to Iowa, as did klwines.com (great prices on spirits as well). As a consumer it is very frustrating.

    • The changes that have been made to Iowa’s wine delivery laws are fairly complicated. First, a Wine Carrier’s License is required for the direct shipment of wine. Wine directly shipped into Iowa may only be delivered by a licensed carrier. Currently, Federal Express Ground and Express, UPS and Integrity Express Logistics are the only licensed carriers in the state. For example, if Wine.com wanted to ship wine to an Iowa address it would have to use a licensed carrier. It is possible that it was not using one of those carriers or that they didn’t want to pay any extra fees those carriers might charge to ship wine to Iowa. There is no longer a two-case per month limit, which was a real hindrance for those trying to buy large volumes of a rare wine.
      In addition, wineries must buy a permit in order to ship to Iowa customers. The Iowa ABD requires payment of $25 annually for a permit. The permittee is also required to obtain a bond, pay taxes and file monthly reports. There are companies that will handle the paperwork for a winery but when the bond, permit, and handling fee are all added up it is well over $500 per winery. As you can imagine, nearly all wineries will take a wide pass on shipping wine to Iowa. I understand that Amazon requires each winery to comply with Iowa law to ship to Iowa. That may be why the Amazon wineries are larger volume, low quality vendors. High quality, low volume sellers won’t want to pay the overhead when they can get rid of all of their inventory at top price without the overhead.

  2. Now K&L is not allowed to ship to Iowa. As a wine future buyer mostly from France I now can not enjoy my hobby in Iowa. Typical politicians, give to the local retailer and their political donations at the expense of individuals. If you like fine wine move to a different state as this is not people that enjoy a bit of culture. This was the final straw me and I will soon be moving ( and save major bucks on income tax). Enjoy your rubarb wine congressmen!

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