Explainer

Why Does It Cost So Much to Ship a Box of Wine?

How come wine delivery is so expensive, when everything else is so cheap?

Jeff Siegel By September 9, 2021
Illustration by Marina Anselmi

Wine lover Karen Dalrymple, who regularly orders wine from online sites, has home security cameras. She has six Italian greyhounds, whose bark alerts her to anyone entering the property. And she works at home, so she’s always there.

If anyone should be able to order wine online and have it delivered without any trouble, it should be Dalrymple, right?

Dream on.

“Even though the dogs bark, and I see the truck on the security camera, I get an email from the delivery company saying they couldn’t deliver the wine because no one was home,” says Dalrymple, who lives in Charlotte, N.C. The wine stays on the truck, and she has to go through the process the next day. And the next, until the wine gets delivered. Or else she has to pick it up at a FedEx or UPS delivery location.

She says she has complained numerous times, to no avail.

The problem is not unique to her. American consumers can buy computers, dog food, and even motor oil online, and get free shipping. Those packages show up at the front door every time and no one gives it a second thought. But not wine. 

A tangled web

Importer Frank Paredes, who specializes in Portuguese wine, picks a piece of paper off his desk. “This is the letter FedEx sends me periodically, telling me I’m violating their wine shipping and tariff policies. Now, they never tell me what I’ve done wrong — just that I’ve done something wrong.” Paredes says they have copies of all his licenses. “And I remind them that they have copies of all my state licenses and my federal license, and then everything is fine until they send me the letter again. The left hand does not know what the right hand is doing, and that’s just as true for UPS as it is for FedEx.”

As Paredes knows firsthand, wine delivery is a complex and surreal knot of 90-year-old legal restrictions, shipping monopolies, tax requirements, more paperwork than anyone can imagine, and heavy boxes. And despite high fees, there’s no guarantee the wine will be delivered.

The problems start but aren’t limited to the legal system that regulates alcohol sales in the U.S. It dates from the end of Prohibition in 1933, and the laws were designed to prevent organized crime from taking over the legal liquor business. In other words, long before the Internet and 21st century technology.

“I always tell my clients, when they ask me if they should ship wine to another state, that it’s a waste of time and money,” says Kimberly Frost, a Texas attorney who advises wineries about alcohol shipping issues. “There are just too many moving parts to make it practical.”

Retailers and producers must get licenses from each state they ship to, and they may also need federal permits. So a winery in California that ships to 10 states must send copies of its license and permits to each state, complete each state’s paperwork, pay any state licensing fees, and then send copies of all of that to the shipping companies. And that’s before any wine leaves the winery.

Worse, shipping laws are not only different for each state, but can also be different within a state. So the rules for sending wine to Ohio are different from those for Illinois, and shipping to one city in Maryland can be different from shipping to another city. Plus, the laws are different for wineries and retailers; wineries can ship to 46 states and the District of Columbia, for example, but most retailers can only ship to 15 and the district.

“There’s just a lot of cost involved with all of that,” says Larry Cormier, vice president and general manager of Sovos ShipCompliant, an alcohol shipping consultancy. “It’s true for producers, and it’s especially true for retailers. The costs are driven by the compliance environment.”

Wine packages must be labeled as alcohol, so that’s one more piece of paper to slap on the box. Then there’s the adult signature fee. It’s what the shipping companies charge producers and retailers to get someone 18 or older to sign for the wine when it arrives — a legal requirement that can cost as much as $6.70 a shipment. And if the driver leaves a note instead of delivering the wine? Drivers must complete a route in a certain amount of time, and if they’re running behind, they don’t have the extra time it takes to wait for someone to come to the door to sign for the package. 

Where’s the free shipping?

In Europe, on the other hand, a Spaniard can buy a case of white Bordeaux costing about $10.35 a bottle, from an online retailer like Decántalo and have it shipped to the door for free; there are many such services in Western Europe. Wine.com and Saratoga Wine Exchange, on the other hand, charge about $33 to ship a similar case of wine to Texas.

That’s because there is less regulation in Europe and taxes are typically lower than in the U.S., according to Jerry Lockspeiser, a British wine marketing consultant and the author of “Your Wine Questions Answered: The 25 Things Wine Drinkers Most Want to Know.” There is also more competition among European shippers. 

In the U.S., save for a couple of companies on the West Coast, FedEx and UPS handle almost all wine shipments; they declined to comment for this article, referring questions to their alcohol shipping website. Legislation was introduced earlier this year to allow the U.S. Postal Service to deliver wine, but it faces an uncertain future and has yet to find a Republican sponsor in the Senate. 

Ironically, says Cormier, wine is an important part of the shipping business; about $500 million a year for FedEx and UPS. Hence, each is willing to put up with the paperwork, bureaucracy, and regulation — especially since they control the market and pricing.

What does this all mean for the person waiting at home for the delivery that never comes? That they will keep waiting, because there’s no sign of anything changing soon.

“This has happened many times,” says wine lover Cody Reynolds, who lives in Chicago. “Even my roommate has been home. One time, I got a text from UPS saying ‘Delivery not completed, no one home.’ I called my roommate, and he said no one even rang the bell. Frustrating.”

Hopefully, the USPS legislation will find a GOP sponsor and pass, adding more competition into the system. And things have improved somewhat lately, as many states relaxed shipping rules during the pandemic, and UPS and FedEx seemed to take more care delivering wine.

But until there’s major legislative change, consumers waiting for their wine will have to rely on the tried-and-true option — chasing the truck down the street.