Wine Spectator reports this morning that Amazon is shutting down its retail wine business, informing wine producers that it “will no longer offer a marketplace for wine at this time, and Amazon Wine will close Dec. 31. Wine will continue to be offered through Amazon Fresh, Prime Now and Whole Foods Market.”

This is actually the third time Amazon has tried to sell wine on its site and then backed off.

Wine Spectator writes: “The decision to shut down seems to be due to so-called “tied-house laws,” which prohibit an alcohol merchant from receiving payments from other suppliers to advertise their goods. When Amazon completed their acquisition of Whole Foods, they essentially became a merchant, a brick-and-mortar establishment, inheriting retail alcohol licenses in multiple states. Amazon could previously collect their marketing fees from online sales because they were piggybacking on each winery’s individual license.

“Amazon had been lobbying to amend these laws, but ultimately had to choose between selling wine through Whole Foods or through Amazon.com. While it's unclear if Whole Foods’ sales numbers from their more than 470 stores superseded that of Amazon's, it's likely.”

KC's View: A minor setback, I think … the Whole Foods tie-up likely will more than compensate for this loss.