Amazon shutting down Amazon Wine

Amazon is winding up its Amazon Wine business.

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.''

According to commentators, the decision stems from Amazon's purchase of Whole Foods Markets.

Fortune reported that according to Compli-Beverage.com, an industry website, Amazon sent out an email to sellers participating on Amazon Wine yesterday, notifying them that the site will ''close'' on 31 December, 2017.

Though the letter did not state the reasons explicitly, it is being speculated that Amazon wants to preempt regulatory challenges with tied-house laws under which retailers of alcohol are barred from accepting anything of value (for example, advertising fees) from suppliers of alcohol (aka wineries).

With Amazon's acquisition of Whole Foods recently, the company inherited retail alcohol licenses in multiple states. Before the acquisition, it was OK for Amazon to collect marketing fees from its marketplace for wines sold by wineries in states where they did not hold licenses.

But the new retail licences complicate matters due to the prohibition around accepting things of value from suppliers.

Amazon has been lobbying for a change to the laws.

Amazon's five-year old wine business allowed wineries and other wine suppliers to sell wine through Amazon.com.

Amazon could not store or ship wine due to alcohol industry regulations, but it allowed wine producers to list on Amazon for a fee and then ship orders to Amazon customers.

It is also possible that Whole Foods' wine-selling business dwarfs that of Amazon Wine, which made easy for Amazon to shut Amazon Wines.