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mixed case: opinion and advice

Has Massachusetts Winery Shipping Legislation Finally Reached the Red Zone?

Patriots QB-turned-vintner Drew Bledsoe is under center in the drive to pass House Bill 294
Photo by: Mark Weinberg

Posted: Mar 21, 2013 10:45am ET

By Robert Taylor

Will this be the year that Massachusetts, the seventh-largest wine-consuming state, finally gets a legitimate winery-to-consumer shipping bill? Hopes are high in the Bay State, despite repeated setbacks: The state's most recent direct-shipping law passed in 2005 and, not long afterward, was ruled unconstitutional. The preceding law had been declared unconstitutional as well.

Rep. Theodore Speliotis has introduced House Bill 294, which would allow both local and out-of-state wineries, after applying for a $100 state permit, to ship up to 24 cases of wine a year to Massachusetts residents. Sen. Daniel Wolf has co-sponsored the bill, crafted with the assistance of the Wine Institute, a winery advocacy organization.

"We're very optimistic," said Carol Martel, northeastern states counsel for the Wine Institute. "Some of our opposition doesn't seem to be nearly as stringent this year, in part because we sat down with the wholesalers prior to submitting our potential draft and talked about some of the issues we were concerned about on both sides."

In previous years, Massachusetts wholesalers had opposed shipments from out of state, fearing they would cut into their business. "The Maryland study will help allay fears," Martel added, referencing recent findings from Maryland's comptroller that winery shipments increased wine sales and state revenue without hurting wholesalers or local retailers.

(Still, state wholesalers aren't supporting H294—they're backing another recently introduced direct-shipping bill, H258, sponsored by Rep. Michael Moran, which would limit winery shipments to four cases per year per consumer, raise the annual permit fee to $150 and add a $350 application fee.)

Another game changer: "Drew Bledsoe was willing to step to the plate as a winery owner and come to Boston where he is still revered," Martel said of the former New England Patriots All-Pro quarterback. "It's helping us bring this issue front and center."

Bledsoe will be conducting a media blitz today in Boston along with Jeremy Benson, executive director of consumer advocacy group Free the Grapes. "Drew lives in Oregon, he has a winery—Doubleback—in Washington," Benson said. "He's prohibited from selling directly to consumers, and obviously he has a big fan base in Massachusetts, so he's offered to help get this message across to legislators and media."

"The reasons I'm supporting H294 are simple," Bledsoe wrote via e-mail. "It's fair and it's right. It's fair for consumers to be able to buy wine directly from wineries. It's fair for wineries to be able to sell wine directly to consumers. It's right for the state of Massachusetts to realize increased tax revenue from these sales … The legislation has been written. All that is left is for the lawmakers of Massachusetts to take action and vote 294 into law."

It's been more than four years since Massachusetts' "volume-cap" winery shipping law was struck down by a U.S. District Court as discriminatory. During that time, the state's shipping laws have been in limbo, though local wineries have continued to ship to consumers.

In 2005, Massachusetts' volume cap was seen by direct-shipping opponents as a novel end-around to the Supreme Court's 2005 Granholm decision, which ruled that states may not discriminate between in- and out-of-state wineries. The new law set a production-volume limit of 30,000 gallons per year—the size of the largest Massachusetts winery—to be eligible for a shipping permit. By doing this, state legislators could please both their constituent wineries, by permitting them to ship directly to consumers, and wholesalers, by excluding virtually all medium-size and larger wineries in California, Oregon and Washington.

The idea caught on, and other states including Arizona, Illinois, Kentucky, New Jersey and Ohio introduced similar volume-cap laws, many of which remain on the books.

Unfortunately for wine drinkers in Arizona, Kentucky, New Jersey and Ohio, those states likely won't follow Massachusetts into consumer-friendly wine law territory until another federal judge forces it into their game plan.

Lee Hammack
Rockville, Virginia —  March 24, 2013 11:23am ET
There is a significant number of legislators at all levels of government who are cowards tethered to the coattails of special interest groups and ignoring citizens' wishes that fall well within the limits delineated in our Constitution. And there are states that, while they technically allow direct-shipping, make the application and compliance process so difficult and circuitous that some retailers pass over the opportunity to sell in that state.
Tracy Hall
Sonoma/Napa —  March 25, 2013 6:02pm ET
Does either Bill address the real issue?

Massachusetts doesn't have 'fleet licensing' for shippers (FedEx and UPS). So FedEx and UPS don't have, nor want to pay to license each and every vehicle they have in their fleet in that state, which is very expensive. Which is why FedEx and UPS currently won't deliver from out of state.

FedEx has licensed their Ground fleet for In state deliveries. Which is good for the Massachusetts wineries, but not good for any winery out of that state.

Currently, as a small winery in CA, you can get a direct to consumer license to ship to Mass RIGHT NOW, even if these new bills don't pass. You just can't get your wine delivered to the consumer.

Seems like no one wants to address the real problem with the law there currently. Make it affordable for UPS and FedEx to license their fleet.
Karl Mark
Illinois —  March 26, 2013 7:48pm ET
I just don't understand how the Grandholm decision of 2005 can only apply to certain states, and not others, while at the same time allowing limits that exclude certain wineries, but not others, because of their size. Where is the "Supreme" court??
Robert Taylor
New York —  March 28, 2013 5:53pm ET
Tracy,

I asked Wine Institute counsel Carol Martel about your concerns regarding the lack of fleet licenses in Massachusetts, and she agrees that yes, that is a concern, especially as Massachusetts is unique in requiring that each common carrier truck carry a copy of the license to transport alcoholic beverages.

And no, these new bills under consideration do not address the current issue with licenses. However, despite that Massachusetts currently may offer winery shipping permits to small wineries outside the state, the Wine Institute officially advises no wineries to ship to Massachusetts, as the law those licenses are being granted under has been struck down.

It is their hope that, with passage of this law, and the subsequent amount of wine that may then potentially be shipped into Massachusetts, that the common carriers will elect to either push to have fleet licensing instated or simply pay to have the additional trucks individually licensed to carry wine, as the potential earnings will become too much of an incentive to pass on.

Rob Taylor
Associate editor
WineSpectator.com
Tracy Hall
Sonoma/Napa —  April 3, 2013 3:44pm ET
Rob,

Thanks for the response. While I respect that the Wine Institute advises wineries not to ship, under the guise of the current law being struck down (can't help but to think of Prop 8 in Ca), we all know that when direct shipping laws are struck down, it opens the door for shipping. In every case but this one! (because no one can get a shipment into the state via FedEx or UPS with an alcohol sticker on the box)

I could list the states where the law was struck down, and shipping was immediate, I'm sure Carol is aware of them as well (some even under the advice of the Wine Institute, as it was on the state to come up with shipping laws or lose revenue) take TX or FL for instance.

The reason MA is different is because 'if' (a very big if) wineries play by the rules and don't ship wine, consumers complain to their representatives that they can't get wine, and the law gets changed.

MA has a permit for wineries to ship to consumers. MA doesn't feel they are favoring in state wineries (even though all their wineries qualify) over out of state wineries, which all don't qualify and why it was struck down.

The facts remain:

No large wineries outside of MA can get a direct shippers permit to ship to consumers. Small wineries outside the state CAN. Every winery in the state of MA qualifies (because they are all small wineries) and they are shipping direct to consumers under the current permit law there. Using FedEx Ground trucks which ARE licensed for carrying Alcohol when those shipments ORIGINATE in the state of MA only (under a different license for delivery from a MA Licensee's to a MA consumer in state).

Every small winery outside of MA could get a permit and ship IF FedEx were to get Express Licensing.

The Wine Institute seeks to change the law so that Large AND Small wineries can ship to MA, hoping that once they get the law changed, FedEx will pony up $150.00 + $50 a truck to get licensed?

I'll put my money on the BILL (that doesn't exist yet) in MA that changes the license FEE for Truck licenses, to a Fleet license Fee.

Also, I respect and applaud what Wine Institute has and is doing for the industry. I know it's baby steps that must be taken to get what you want. I'm just frustrated every time a new bill is introduced (and doesn't pass) that doesn't address the real issue.

Most states have passed bills that cover the entire process. MA isn't willing to do so.

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