Tuesday, April 25, 2006

Follow-up: Costco Lawsuit

I previously described the important issues in the Costco lawsuit and tried to explain why they are relevant to Joe and Jane wine consumer. Yesterday, federal judge Marsha Pechman issued her ruling in the case: Washington's alcohol policies are anticompetitive and do not promote the state's "core interests". This ruling would allow retailers (like Costco) to receive discounts for large purchases, buy on credit, choose their own profit margins, and negotiate their own prices with suppliers.

Though the ruling is sure to be appealed (probably all the way to the Supreme Court since Washington has liquor distributor money behind it), on its face it dismantles much of the three-tier system and its inherent protections given to distributors. I, for one, am skeptical that this will result in a wide-spread breakdown of wholesaler distribution, but it does have significant potential for change. And in this case, change is good.


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