But then Sisson did something off-script. He all but exclaimed that his rivals in the Internet wine-selling business were operating illegally. Potshots at competitors Sisson didn't mention his competitors by name, but the insinuation was clear. Competition among dotcom retailers has always been intense, maybe more so now that investors and the buying public are growing impatient with unprofitable business models. Unlike books, CDs or apparel, the sale of wine, beer and liquor is heavily regulated, ruled by a byzantine distribution system that locks in, by law, strict roles for producers, distributors, retailers and consumers.
Many states take that role very seriously.
Twenty-three states prohibit interstate direct shipments of wine, and 5 states make such shipments a felony. Electronic network Wineshopper, which opened for business in California on April 10, has built an electronic network that ties together wine producers, wholesalers, distributors and retailers. In other words, its e-commerce system doesn't bend or break any laws and pays all applicable state taxes and fees, Sisson claims. Regulators from 32 states have also cleared the company for operation, he adds. Wineshopper was expected to launch its service last fall, but problems with its complex e-commerce network caused a lengthy delay.