Amazon notified wine sellers on Monday that the company would shut down its Amazon Wine business at the end of this year.
Amazon is shutting down its Amazon Wine business in the wake of the Whole Foods deal
Amazon Wine will close up shop at the end of this year.
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
Amazon Wine, which has been around for about five years, allowed wineries and other wine suppliers to sell wine through Amazon.com. Alcohol industry regulations have prevented Amazon from storing and shipping wine itself, but it allowed wine producers to list on Amazon for a fee and then ship orders to Amazon customers.
In a message to Amazon Wine sellers, the company said: “[A]s Amazon continues to offer Customers additional retail options for buying wine, we will no longer offer a marketplace for wine at this time, and Amazon Wine will close on December 31st, 2017. Wine will continue to be offered through Amazon Fresh, Prime Now and Whole Foods Markets.”
The decision to shut down the business appears to stem from so-called tied house laws, which prohibit retailers that sell alcohol from accepting payments from suppliers to advertise their goods. Wine suppliers pay fees to Amazon to sell through Amazon Wine, while Amazon also acts as a retailer of wine through Whole Foods and increasingly other services, like Prime Now.
Amazon had been lobbying to alter these laws, but it looks like they’ve realized it wasn’t going to happen. And it is quite likely that Whole Foods’ wine-selling business dwarfs that of Amazon Wine. Sounds, then, like an easy choice.
This article originally appeared on Recode.net.
