Tax as a Weapon in Interstate Wine War
New Hampshire launches aggressive discounting program to attract out-of-state customers.
Wine and liquor sales competition has always been fierce on state borders, particularly in states like New Hampshire that not only offer some of the most attractive products in the country but also play super competitively. With many of its huge stores located close to state borders, the New Hampshire Liquor Commission (NHLC) has long courted and had success bringing in out-of-state buyers from as far away as Massachusetts and New York; more than half of New Hampshire's liquor store sales are made by customers that cross over state lines.
Alongside the introduction of the "No Taxation on Our Libations" campaign this summer, which offers temptingly high discounts running from 11 to 13 percent, retailers in neighboring Maine say that these practices are hurting their business.
From the legal perspective of Partner Michael Newman, although New Hampshire's marketing plan is not unlawful, it may be unfair competition. He told Wine Searcher that a "control state retailer can do whatever they want as they are making in-person sales. According to him, aggressive pricing and courting of out-of-state consumers has gone on forever in New Hampshire, including back into the 1970s.