July 8, 2020 – Ohio Attorney General Dave Yost filed a preliminary injunction Wednesday with the U.S. District Court for the Southern District of Ohio Eastern Division to immediately stop illegal liquor and wine shipments into Ohio, citing loss of tax revenue and loss of sales for local, family-owned suppliers across the state.
Throughout May, investigators with the Attorney General’s office used pseudonyms to confirm a multitude of direct-to-consumer sales by companies such as Wine.com, Wine Country Gift Baskets, Winc, and Ace Spirits.
“These distributors are flagrantly skirting the law and keeping Ohio from collecting tax money it is entitled to,” Yost said. “We’re not talking nickels and dimes here. The tax revenue lost due to online liquor sales could be anywhere from tens of thousands to millions of dollars.”
Yost said multiple out-of-state wine and spirits providers have found a way around Ohio law that prohibits the shipment of such products directly to consumers. He said the law is designed to protect Ohio liquor businesses from illegal competition.
The injunction sought by Yost is among one of the first-ever to invoke the U.S. Constitution’s 21st Amendment, which empowers each state to regulate the imports and transportation of liquor.
“There are tens of thousands of retail stores to buy wine in Ohio – including independently owned grocery stores, drugstores, gas stations, bars and restaurants – that support local communities, comply with alcohol laws and pay their taxes,” said Casey Forbes, who is the owner of Vintage Wine Distributors.
Shipping data from the Division of Liquor Control showed that in 2019, Wine.com directly shipped about 24,000 packages of wine to Ohio consumers. Winc shipped about 13,000. Together the two companies delivered nearly 700,000 pounds of wine shipments to the state without paying Ohio taxes.
“Doing business in Ohio means following the current law and paying Ohio taxes,” Yost said. “We’re putting the marketplace on notice.”
Pete Minotti, owner of Minotti Wine & Spirits in Fairview Park said the illegal shipments into the state are hurting his family business.
“Customers will come in to my store and try to negotiate prices (below state minimums) to what they see online,” he said. “I don’t blame customers for trying to get a good price, but these out-of-state companies need to follow Ohio law.”
By Kaylyn Klavaty, News 5 Cleveland
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