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Retailers Unite to Push for Wine-Shipping Rights

Like wine producers, wine shops want to ship directly to customers in other states

Eric Arnold

Posted: Wednesday, March 08, 2006

Another player has entered the fray in the battle over wine shipping. Wine retailers across 30 states have formed a new association to help them win the same rights that wineries are gaining around the country.

Currently, 33 states permit consumers to order wine from out-of-state producers for delivery directly to their homes. However, only 12 of the states also allow their residents to receive interstate shipments from retailers.

The Specialty Wine Retailers Association was formally launched this week to address the discrepancy, which exists because wine retailers have rarely banded together to push the issue.

Many states have adopted interstate shipping legislation--based on winery organizations' model bills--that initially included language extending rights to both wineries and retailers. "But since the retailers were never organized, we were never at the table for lobbying efforts. Often the retailers got horse-traded away," explained Lesley Berglund, president of the SWRA. She added that up until last year's Supreme Court decision that said states must treat in- and out-of-state wine shippers equally, retailers were included in direct-shipping legislation roughly 60 percent of the time. "Since the decision, they've been excluded 100 percent of the time," she said.

The matter has become more pressing since there has been a recent flurry of legislative activity in several states--and not just in those whose laws don't seem to comply with the Supreme Court decision. Many so-called reciprocal states, which allow direct shipments from wineries in other states so long as those states accept shipments from them, are considering switching to a permit system. California made the switch last year, and Colorado recently introduced a bill to do the same. States with a permit system require out-of-state shippers to buy a license every year, report regularly on what was shipped to whom and pay all appropriate taxes. The SWRA wants to make sure that retailers aren't left out as this trend continues.

Todd Zucker, president of K&L Wine Merchants in Redwood City, Calif., joined SWRA in the hope that, if his business could ship wine across state lines, he would see an increase in sales. "My sense is that it would be substantial because a lot of the merchandise we offer for sale isn't readily available in other markets or is available in limited quantities, like Bordeaux futures and rarities," he said. K&L receives several calls every hour from out-of-state consumers wishing to order wine, he added.

Wineries have been supportive of the SWRA's efforts, Berglund claims, because if retailers can ship to more states, it helps wineries build their brands and increase consumer access to the products.

However, the major wholesalers--who could also benefit if retailers sell more wine--are opposing the SWRA, Berglund said. "The wholesalers, so far, have objected vehemently to having retailers included in new legislation. Which doesn't make any sense at all … since the majority of these retailers do buy from wholesalers," she said. The wholesalers, she claimed, are "hanging their hat" on the argument that direct shipments make it easier for minors to buy alcohol. However, she added, "The Supreme Court decision said that argument doesn’t hold water."

In addition, Zucker pointed out, states that allow direct shipping require that packages are labeled as containing alcohol and that FedEx and UPS can deliver wine only to an adult recipient who provides ID.

Berglund isn't overly concerned about wholesaler opposition. "People are a lot better educated in the legislatures and media than they were eight years ago," she said, referring to the period when the battle over direct shipping heated up. "I hope we'll get amendments to some of the bills that are out there."

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