Out-of-state liquor companies object to effort to keep them out

Two companies accused of illegally shipping wine and liquor to Ohio say they shouldn’t be included in an injunction filed by Attorney General Dave Yost.

A spokesman said Yost is looking into the matter.

The attorney general’s filing accuses seven companies of shipping tens of thousands of packages of wine and spirits to Ohio. State law requires liquor and wine in most cases to be sold through licensed sellers. Yost asked a federal judge to order the companies to stop shipping to Ohio, update their business practices and hand over records.

Representatives of Winc and Ace Spirits, two companies named in the request, said they follow the law. A representative of San Francisco-based Wine.com, also named in the filing, said the company is cooperating with Yost.

“Wine.com is working in good faith with the office of the Ohio attorney general to resolve this issue,” CEO Rich Bergsund said in an email.

In a statement, a Winc spokesperson said the Los Angeles-based company already complies with Ohio rules.

“Winc holds all of the necessary permits to legally ship wine into Ohio and has remitted all of the necessary taxes,” the statement said.

Winc uses an Ohio subsidiary, which might have caused the misunderstanding, the statement said.

Ace Spirits co-owner Chad Moe said his family recently bought the Minnesota-based company and no longer ships to Ohio. He stressed that Ohio lets small wineries ship directly to Ohio consumers, and the old owners never surpassed the threshold that necessitates a special license.

“We appreciate their candor and will look into their claims,” Yost spokesman David O’Neil said in an email. “We are working to ensure that all parties follow the law.”

Representatives of other companies named in the filing did not respond to messages seeking comment.

Critics accuse Yost of grandstanding and said the industry and the state are perpetuating a system that prevents competition from companies in less-regulated states.

Ohio owns all spirits sold in the state. Private liquor stores receive a 4% to 6% commission on each sale, and the required markup is 30%. In less-regulated states, the average markup is between 25% and 30%. Some of the proceeds from liquor sales in Ohio go to JobsOhio, a quasi-private organization dedicated to boosting the state’s economy. The group has resisted requests to disclose information about its activity.

Justin Rex, an assistant professor of political science at Bowling Green State University, suspects Ohio’s crackdown “is an attempt to protect local sellers that can’t compete with bigger boxed wine companies.”

Tom Wark, executive director of the National Association of Wine Retailers, was more blunt.