From an editorial published in the Winston-Salem Journal on Aug. 24:

The owners of North Carolina wineries have a legitimate concern over legislation moving through the U.S. House of Representatives. If the bill becomes law, the wineries could lose the lucrative business they derive from mail-order sales.

U.S. Rep. Howard Coble, a Greensboro Republican, is a sponsor of the Comprehensive Alcohol Regulatory Effectiveness (CARE) Act of 2010. The bill would overrule a 2005 U.S. Supreme Court decision that limited state control over the interstate shipment of beer and wine.

North Carolina has more than 100 wineries today, and the industry is growing. Nonetheless, all are modest in size and depend on a number of revenue streams to be profitable. One of those streams is mail orders, either directly to consumers in other states or through cooperative arrangements that work like the monthly book clubs. In both cases, there is no need for a wine distributor.

For almost all of its beer and wine sales, North Carolina uses the "three-tier system." That is: producer, distributor and merchant. The system offers a number of benefits, including effective tax collection and control over illegal sales to minors. But for mail-order sales, a distributor and merchant are not required. The winery sells directly to the public, collecting sales taxes only for in-state sales.

Winery owners said recently that passage of CARE would almost certainly lead to the end of mail-order sales. That, they said, would be disastrous.

Coble responded that the bill would have no impact on small wineries and breweries. For the negative consequences the winery owners foresee, state legislatures would have to reassert their control.

There are two arguments for CARE. First, it would reinstate state control over sales. All wine shipped in from out of state would go through a distributor and merchant, increasing state tax collections. Second, wine shipped via mail orders can end up in the hands of minors and CARE would end these shipments.

We disagree. North Carolina stands to lose good jobs and the tax revenue they generate if the state's wineries falter. If North Carolina does not already export more wine than it imports, it will some day. The current law favors the exporting states. And while the possibility that 17-year-olds have joined high-priced wine clubs exists, we see no data to prove that. More likely, they pilfer from their parents or buy cheap wine at a retail outlet.

Passage of CARE would not be in the best interests of the state's economy.