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Rhode Island May See Direct-Shipping Ban

Wineries are pushing for governor's veto now that bill has passed House and Senate

Eric Arnold

Posted: Friday, July 08, 2005

In a blow to consumers anticipating the freedom to order wine online, a bill that would prohibit wineries from shipping directly to residents of Rhode Island has passed both houses of the state legislature.

Until the U.S. Supreme Court decision in May, Rhode Island allowed its wineries to ship directly to consumers, but did not extend that right to out-of-state wineries. The court ruled this to be a violation of the U.S. Constitution's Commerce Clause, meaning that Rhode Island and several other states would either have to change their laws to allow direct-to-consumer shipments from wineries in any state or ban the practice altogether.

Rhode Island's House Bill 5815, introduced by Rep. Norman Landroche (D) and two cosponsors, took the latter route, mirroring a recent legislative development that could affect wineries in Michigan. The Rhode Island measure passed the House on June 30 and the Senate on July 1. The bill has not yet reached the office of Gov. Donald Carcieri (R), but once it does, he'll have six days to either sign or veto it.

In the meantime, Rhode Island's four wineries and the state representatives in their districts, as well as national winery associations such as Wine America, have been pushing for a veto.

"The Supreme Court decision was an important thing and needed to happen," said David Sloane, president of Wine America. "But we've always had some anxiety and trepidation about what would happen in states where the wine industry was fairly small and relatively defenseless against wholesalers."

Rhode Island wineries didn't focus on the issue until late in the game, acknowledged Nancy Parker Wilson, general manager at 2,000-case winery Greenvale Vineyards. This type of bill had made its way to the legislature several times before, but was never passed, she explained. "There was a feeling that it wasn't going to go anywhere even though the Supreme Court was on the brink of making its decision, so we were just advised to keep a low profile and continue doing our business," she said. "It was only two weeks ago that there was a realization that there was going to be a vote to prohibit local wineries from being able to ship."

Though direct shipments make up only about 2 percent of Greenvale's sales, Wilson said, the winery's overall business has increased 20 percent in the past year and she sees direct shipping becoming increasingly important.

But Rhode Island wineries didn't convey how important shipping was to expanding their markets, and their silence has landed them in trouble, Wilson said. "The legislators hadn't heard both sides of the story. They heard that [allowing interstate shipments] would be bad business for the retailers and wholesalers, and the position was to support small business."

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