After endless speculation about its legality, Amazon Wine is finally shutting down. That’s right, get your 1 cent shipping deals and bulk packs now. Via TechCrunch, Amazon Wine will be no more on December 31, 2017.
We can blame Amazon Wine’s closure on America’s three-tiered alcohol distribution system. This parting gift of the Prohibition gave us tied-house regulations preventing alcohol retailers from accepting payments from alcohol suppliers.
Before acquiring Whole Foods, Amazon was just a marketplace of suppliers. It collected 15% from every supplier, whether they sold wine or fire extinguishers. But after the Whole Foods acquisition, Amazon is now also a retailer of alcohol — meaning it technically can’t collect that 15% from wine suppliers anymore. Surely, other law-abiding retailers who pay for third party distributors, such as Southern Glazer’s Wine & Spirits or Young’s Market Co., started crying foul.
So is this the end of wine on Amazon? Certainly not. Wine will continue to be available via Amazon Fresh and Prime Now. However, these options aren’t perfect replacements for Amazon Wine.
Amazon Fresh, Amazon’s grocery delivery service, is only available in major cities. It also costs $14.99 month on top of your Prime membership fee. Prime Now, Amazon’s one to two hour delivery service, is available to all Prime members. But for those who don’t need wine right now, the extra delivery fees (varying by order size) are not desirable. And while Prime Now is sure to grow enormously with the acquisition of Whole Foods, its wine selection is currently limited to a few retailers (such as Sprouts Market) and major metro areas.
With over 4,000 wines to choose from Amazon Wine was a blessing for both consumers and wineries alike. While we’ll be sad to see it go, we’re sure the Whole Foods acquisition will open up exciting new opportunities for Amazon consumers. We’ll report out more as we hear it.