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Direct-Shipping Bill Introduced in Ohio

Legislation quickly follows judge's order to allow wine shipments, but passage is uncertain

Eric Arnold

Posted: Wednesday, September 14, 2005

Less than two months after a federal judge ruled that Ohio's laws did not comply with the recent U.S. Supreme Court decision on direct shipping of wine, Ohio Sen. Eric Fingerhut (D) has introduced a measure, Senate Bill 179, to allow consumers to order wine from any producer and have it sent to their homes.

Since the district judge's ruling in July, Ohio residents have been able to order directly from both in-state and out-of-state wineries, as long as they report their purchases and pay excise and use taxes. Previously, only local producers could ship to consumers, while others were banned from doing so. (However, a provision in the law allowed residents to apply to the Ohio Liquor Control Commission for a personal importation order to bring back or ship back up to six cases from out-of-state wineries within a three-month period.) But the judge's order prevented the state from enforcing its existing regulations, which he deemed discriminatory.

SB 179, which has two cosponsors, both Republican, is essentially a legislative version of the judge's ruling. It allows for direct shipping and only requires wineries to pay all applicable taxes or inform recipients that they are responsible for paying them. The bill does not require wineries to obtain a shipping permit, nor does it set a case limit. It does, however, require that the person ordering the wine be of legal drinking age and sign for the package. Several sections of the bill also address criminal penalties for minors who attempt to buy wine with false identification, and add to Ohio's existing penalties for those who sell alcohol to minors.

"It's a free-market solution," said Fingerhut. "I and a few other members of the legislature have been pushing to deregulate the marketplace, and we shouldn't be in the business of restricting the choices of consumers in Ohio. I introduced this bill because we have to change the law even though it's not being enforced right now."

Though the Ohio Liquor Control Commission is still reviewing the bill and has yet to take a position on it, some opposition is to be expected. "The free market doesn't have a lobbyist, but individual interest groups that would be impacted do," said Fingerhut.

Opposition is likely to come from a group called the Coalition for a Safe and Responsible Ohio, which is made up of several smaller groups, some more outspoken than others against direct shipping. The Wholesale Beer and Wine Association of Ohio, a member of the coalition, has remained somewhat quiet, however. "I think there is an understanding among many wholesalers that the best way to come up with a solution to this is for there to be give and take, and both sides taking reasonable positions," said Bob Tenenbaum, spokesman for the wholesalers' association. "I don't think anybody's looking for an all-out bloodbath. What's going on in Michigan is not what anyone would like to see here."

The bill, which was introduced on Sept. 9, has yet to be scheduled for a committee hearing, and Fingerhut is not certain about its prospects. "It is not at all guaranteed that the free-market position will prevail, even in a legislature that is Republican-dominated, with a Republican governor."

A companion version of Fingerhut's bill has not been introduced in the House, while there is a pending measure, House Bill 300, that would ban direct shipments altogether. That legislation was introduced by Rep. John Domenick (D) in June, prior to the district court ruling. Other measures could also be introduced, or SB 179 could be amended.

"There will be a lot of political processes still to come," said Alexander Tanford, a professor at the Indiana University School of Law who, along with attorney Robert Epstein of Epstein, Cohen, Donahoe & Mendes in Indianapolis, handled the Ohio and Michigan lawsuits. "The fact that a bill has been introduced doesn't mean a counter-bill won't be introduced, it won't be amended or won't be killed. I've long ago given up trying to guess how politics will play out in the states."

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