Story Inn Wine Selections

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     It is impossible for us to produce a wine list that does justice to our food.  In Indiana, we are handicapped by the "three tier system", an arcane law that requires wine producers to sell exclusively to a small but powerful number of wholesalers, and requires retailers like the Story Inn to purchase exclusively from those wholesalers.  A winery must choose a wholesaler and market their products exclusively through that wholesaler.  A retailer like the Story Inn must work exclusively through that wholesaler, and no one else.  Thus, there is one and only one place where the Story Inn can shop for its wines: the wholesalers. 

    In this manner, the three-tier system effectively creates a state-sanctioned monopoly for the distribution of wine at the wholesale level.  The wholesalers dictate for the rest of us what wines we may buy in this state, and what price we must pay for them.  The retailer must accept the terms dictated by the wholesalers.  If a retailer were to purchase wines from the producer directly, he/she would risk losing his/her retailer's permit, and possibly face criminal penalties.     

    As a consequence, we pay far too much for a very limited selection of wines in this state.  The wholesalers have a strong economic incentive to offer a limited selection of products at inflated prices.  The wholesalers simply refuse to carry boutique wines, the kind we would like to offer here at the Story Inn.  There just isn't enough money in it to interest them.    

    There is nothing per se wrong with the notion of using wholesalers to distribute wine.  Wholesalers can, and do, create an effective market for mass-produced wine.  Unfortunately, the system works poorly in getting boutique wines to market.  FACT: There are now more than 5,000 wineries in the United States alone, producing more than 10,000 new varietals EVERY YEAR.  Collectively, Indiana wholesalers grant market access to less than 5% of those wineries, and only a few varietals from each of those are lucky enough to have market access.  Currently, about half of the Wine Spectator's list of the top 100 wines are not available to Hoosiers.  This situation is intolerable. 

    The Story Inn does not object to the existence of the wholesalers, but only to the law which grants them exclusivity.  We would like to shop for our own niche wines, particularly if the wholesalers have determined that the wines are not worth the effort to stock in the first place.  This exclusivity is the reason all of the wine lists in the state's top restaurants look pretty much the same.  Let the wholesalers be subject to the same laws of economics that govern the rest of us!     

    As you can imagine, the wholesalers make a lot of money in the absence of competition.  They have a vested interest in maintaining the status quo, even if it penalizes consumers.  In years past, the wholesalers bought themselves friends in the Indiana legislature with unusually generous "campaign contributions".  If you would like to see how much money your state senator or representative has accepted from the wholesale lobbyists, visit www.followthemoney.org. 

    The Indiana state legislature has reciprocated by enacting bizarrely pro-wholesaler laws.  For example, if a retailer is late in paying an invoice to a wholesaler, that wholesaler can legally notify the other wholesalers in the state of the existence of that debt and place that retailer on "industry no ship", which prevents that retailer from buying from any other wholesalers (even if the retailer is not beholden to them).  This dubious, albeit effective, collection method would constitute a criminal act if it involved a debt arising from the sale of any product other than an alcoholic beverage.   

    Fortunately, similar three-tier laws in other states have been repealed or declared unconstitutional.  Currently 85% of the country's population lives in states which have done away with this oppressive system.  In August, 2007, the United States District Court for the Southern District of Indiana struck down a key provision of Indiana's three-tier law as violating the Commerce Clause of the United States Constitution.  Baude v. Heath.  That case is currently before the United States Court of Appeals for the Seventh Circuit.  Crazy as it may seem, Indiana is currently mounting a taxpayer-funded challenge to a respected federal judge's ruling, just for the purpose of perpetuating the public subsidy of a state-sanctioned monopoly which penalizes consumers.  Such is the nature of Hoosier politics. 

    VinSense, Inc., a new not-for-profit consumer organization, has taken the fight to the Indiana legislature.  VinSense, Inc maintains an informative website at www.vinsense.org.  We are hopeful that the Hoosier version of the Berlin Wall will soon fall. 

    The Story Inn supports free markets and access to fine wines.  In December, 2007, the Story Inn's owner, Rick Hofstetter (a lawyer) submitted an Amicus Brief to the Seventh Circuit on behalf of VinSense, supporting the District Court's decision in Baude v. Heath.  Access a copy of the Amicus Brief by clicking HERE.  Shortly thereafter, National Wine and Spirits (the Story Inn's biggest supplier) wrongfully placed the Story Inn on "industry no ship", in apparent retaliation for the owner's submission of the Amicus Brief. 

    The Story Inn is currently building a new wine list from vintners which are not carried by National Wine and Spirits.  It will notbe easy, since National does carry several high-quality brands, and we must buy them from National or not at all.  That puts the Story Inn at a comparative disadvantage.  Other Hoosier restaurants can select from 5% of the market.  The Story Inn must select its wines from about 3% of the market (a subset of that paltry 5%, to boot). 

    We appeal to our loyal customers to be patient and to work with us.  We promise to stock the best wines that we are allowed to legally buy in Indiana (as long as they are not sold by National Wine and Spirits).  We also urge our customers to join VinSense, and to contact their state legislators.  Send them a message: WE LIKE WINE, AND WE VOTE.