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Legislation to Remove DTC Barriers Continue Nationwide; Six States Remain Closed to DTC

by Kerana Todorov
May 31, 2019

A bill that would have allowed Alabama residents to buy wine and have it shipped to their house has failed, Steve Gross, vice president of State Relations at Wine Institute, said Thursday. The bills was among those Gross discussed during his keynote address at the 2019 ShipCompliant Wine Summit in Napa. Alabama is one of six states that does not allow direct shipping. The other states are Delaware, Mississippi, Kentucky, Rhode Island and Utah.

The bill passed the Alabama House of Representatives on May 23 but died in the Senate Thursday morning, where it was referred to a study committee, Gross said. “We’ll be back and work in Alabama again,” Gross said at Marriott Napa Valley.

Gross urged the attendees to support the efforts of Free the Grapes, a coalition of wineries and other wine industry representatives seeking to remove barriers to direct-to-consumer wine shipping. Wine Institute partners with Free the Grapes in some states to hire public relation firms and work on social media platforms to have legislation passed.

Gross on Thursday commented on other bills in other state legislatures.

A direct-wine shipment bill is still pending in Delaware. A bill last year was amended at the very last minute with to prohibit the sale of wine already in distribution, Gross said. “We don’t like those provisions,” Gross said. “So we killed our own bill. That’s hard to do,” he added. They returned this year to try to “get it done right.”

Gross was optimistic about a direct-to-consumer shipping bill in Kentucky earlier this year. At the last minute, however, the Kentucky Distillers’ Association and the Distilled Spirits Council of the United States opposed the bill unless they were included in it, Gross said. The bill died in the Kentucky House of Representatives.

Wine Institute and others consider Kentucky effectively closed to direct shipping. A bill to allow direct-to-consumer shipments in Kentucky passed in 2018. However, shippers who accidentally deliver alcohol to an address in a dry county can be prosecuted under Kentucky law. FedEx does not ship in Kentucky, Gross said. “We recommend that people not get a license to ship in because of the problems with the provisions,” he said, referring to the Kentucky law.

Three direct-shipping wine bills died in the Mississippi State Legislature this year. 2019 is an election year for the state Legislature, Gross said. The bills’ sponsors said they were not going to call for a vote on these bills in an election year, Gross said. The Wine Institute will have new sponsors in 2020.

It has taken some states as long as 15 years to allow direct-to-consumer shipping, Gross noted. “There is always hope,” Gross said.

Wine Institute also has worked on legislation in various states to improve laws on the books, including in New Jersey and Ohio where wine companies that produce more than 250,000 gallons cannot ship wine directly to consumers. The bills have good support in New Jersey, where they remain active. “We’re enthusiastic about those,” Gross said. Bills have been drafted in Ohio, where the state Legislature only deals with policy legislation after the budget is done.

In Indiana, Wine Instate ran a state bill to allow wine producers who sell their wine through a state wholesaler to also be able to have a direct-to-consumer shipper’s permit. The bill died in committee this year. A priority for state politicians in Indiana has been passing a bill that would expand the sale of cold beer to grocery and convenience stores instead of limiting the sale to state-owned package liquor stores. “We’re going to keep plugging away and hopefully cold beer will go away,” Gross said.

Wine Institute also wants to remove on-site requirements that require the consumer to buy wine at the winery.

In Arkansas, a state bill that would have removed the on-site sales requirement died in committee, Gross said. The Arkansas wine industry did not support the bill, Gross said. In Rhode Island, two state bills are still in committee awaiting action

Wine Institute continues to work on state bills in Alaska and Minnesota to have workable direct-to-consumer shipping permit laws with tax provisions. In Oklahoma, a bill to remove the prohibition on the use of fulfillment houses died in committee, Gross said. As of March 1, however, the state did away with bonding requirement for wineries direct-to-consumer shipments. Fed Ex have started shipping wine from wineries, he noted.

In Louisiana, legislation is pending to remove restrictions on the bottle size that can be shipped directly to consumers. And in Tennessee, a bill to increase the amount of wine that can be shipped to consumers from three to six cases died in committee.

Arizona law now a winery can accept an order for wine between 2 a.m. and 6 a.m., according to Gross. Deliveries are still prohibited during those hours. “But we have a firm commitment from FedEx and UPS that they will not deliver wine between 2 a.m. and 6 a.m. in Arizona,” Gross said, as the audience laughed.

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