Celebrating a Recent Burst of Progress on Direct Shipping
March 01, 2015
It seems like progress in direct shipping goes in waves. There's a small flurry of movement, in states widely separated in geography and culture, and then a period when nothing much happens. Then, for whatever reason, progress starts back up.
About six weeks ago I wrote a post State of the Union, Wine Shipping Edition in which I broke down the 51 shipping destinations (50 states plus the District of Columbia) into ten tiers, based on the ease and cost of doing business in each. I could have written essentially the same article any time in the previous two years without necessitating significant changes (OK, there was one change: Montana became a shipping state in late 2013, but that was it). Yet the six weeks since I wrote my State of the Union have seen two major developments, with a couple of others seemingly in the works. Given that there aren't that many states still left that prohibit or severely curtail winery shipping (15, as of late January) that's a measurable blip. Let's look at them one by one.
Cheers to Massachusetts!
We were thrilled when, late last year, the great state of Massachusetts passed a workable direct-shipping law (thanks, in part, to former New England Patriots quarterback-turned-vintner Drew Bledsoe). Although the law went into effect January 1st, 2015, it took the state a few weeks to process the flood of applications they received. But as of now, we can happily ship to residents of the Bay State, and they can sign up for our wine clubs. And after the winter they’ve had, it sounds like most of them need a drink!
A Bill Passes in South Dakota
South Dakota was until very recently one of the states with the most curious collection of wine shipping laws. We couldn't ship wine there if we received an order, but only when someone made a purchase in-person at the winery. And even then, the shipment was subject to the state's individual out-of-state alcohol purchase transport limit of one gallon per instance. That's five bottles, maximum. But just two weeks ago, the governor signed into law House Bill 1001, which sets up a straightforward shipper's permit requiring that wineries remit taxes and periodic reports, and verify the legal age of the purchaser. Pretty standard stuff, for wine shipping, and only a moderate burden to wineries. The law will go into effect January 1st, 2016.
Progress in Indiana
Indiana is another state that throws some interesting roadblocks in between wineries who wish to sell their wares in the state and Hoosier consumers who would like to purchase them. Right now, the state limits direct shipments to wineries who both take an initial order in-person at the winery, and don't have a relationship with a wholesaler in the state. The state differs from South Dakota in that only the initial order must be taken in person (not every order) but the wholesaler prohibition means that it's always been a no-go for us. In late January, the Indiana Senate passed Senate Bill 113, which would remove both the in-person requirement and the distributor prohibition, albeit at the expense of raising the winery shipping permit from $100/year to $500/year, which would make it one of the five most expensive in the country. Still, this would count as progress. The bill is now in committee in the Indiana House of Representatives.
Pennsylvania: Glimmers of Hope
With the passage of the direct shipping bill in Massachusetts, Pennsylvania (America's 10th-largest wine market) assumed the mantle of the largest wine market to prohibit winery-direct shipping. But readers familiar with Pennsylvania will understand why, despite a growing in-state wine industry, there are unusually strong forces that stand in the way. Pennsylvania is one of only two states (Utah is the other) where wine sales are restricted to state-run stores, and with more than 600 stores in the state system, the combination of massive revenue that the stores direct into state coffers and the influence of the state employees' union mitigates against rapid change. Still, the prospects for change seem brighter now than at any time in my memory. The new Governor Tom Wolf went on record in February saying "I'm in favor of direct shipping". The bill, however, that passed the Pennsylvania House of Representatives last week looks to have limited prospects, because it moves faster than the Senate and Governor are comfortable with in privatizing the state stores. In any case, it seems like there is at least the possibility of movement in the Keystone State, although I'm not holding my breath.
Delaware: A Bill in the Works?
Finally, one more small crack of daylight, albeit in one of the smallest states of the union. In November, Delaware House Minority Whip Deborah Hudson made winery direct shipping the focus of her weekly address, pointing out that Delaware was one of just 9 states that prohibit shipping to consumers and inviting her fellow legislators to "objectively weigh the facts and set aside the baseless fears of special interest groups, allowing our residents and Delaware wineries to join the 21st Century". Amen to that!
As always, the best place to find out what's going on in the direct shipping realm, and to learn how you can help, is Free the Grapes.