Wine Lovers Score Victory in Nevada, Mixed Results in Arizona

Dana Nigro
Posted: May 27, 1999

While the battle over home delivery of wine continues in Congress, two more state legislatures have taken the matter into their own hands, passing new bills that affect consumers' ability to order wine through catalogs, by phone or via the Internet.

In Nevada, wine drinkers can now order more of their favorite hard-to-find bottlings without fear of felony charges. This week, the state legislature approved a bill allowing residents to import up to 12 cases per year for personal use. The legislation is awaiting Gov. Kenny Guinn's signature on June 7.

Nevada's former law made it a low-level felony for residents to bring in more than 1 gallon of wine per month, whether they had the wine shipped from an out-of-state winery or brought it back themselves from trips to neighboring California. "I think of felons as murderers and rapists," said state Sen. Mike Schneider, who sponsored the bill after trying to order a case of wine to be shipped to himself and learning from the retailer that it was against the law.

The law includes provisions added to earn the support of local wholesalers, whose business could be threatened by direct shipments. If a winery ships more than 25 cases of wine per year into Nevada, it must designate a Nevada wholesaler to handle its products. Wineries must also pay state taxes on their products and licensing fees if they ship more than 200 cases per year.

"It's just a common-sense law," said Schneider. "I know some distributors want to protect their monopolies, but I think this actually expands the market by allowing people to experiment and develop their taste."

In Arizona, Gov. Jane Dee Hull signed a law earlier this month that appears to allow state residents to receive home deliveries of alcohol from out of state but ultimately is not likely to benefit wine lovers.

Until now, Arizona had prohibited its residents from receiving shipments of wine directly from out-of-state wineries and retailers. The new law, which takes effect on Aug. 6, permits adults to order wine from out of state via mail order, phone or the Internet. But the producer must first obtain a shipping license from Arizona, then send the wine to a wholesaler who will pass it on to a retailer for delivery to the customer. Violators who circumvent the traditional three-tier system can be fined up to $150,000.

Wholesalers and retailers must pay taxes on the alcohol, and retailers must keep records and verify at the time of delivery that the customer is of legal drinking age. The law does not address whether or not wholesalers and retailers can charge a fee for handling direct shipments.

However, wholesalers are unlikely to be willing to handle one case for a small winery, said Jeremy Benson, executive director of Free the Grapes!, a trade and consumer organization lobbying to open up interstate shipping of wine. "Direct shipping through the three-tier system is not going to work," he said. "From the standpoint of the wineries, it doesn't change the situation any."

Simon Siegl, president of the American Vintners Association, added, "If they were looking at passing laws to make it easier for consumers to obtain hard-to-find wines, this is not it."

For other recent state legislative news:

May 20, 1999
New York Tackles Internet Alcohol Sales

April 13, 1999
North Dakota Approves Limited Direct Shipping

For more on federal shipping legislation:

May 26, 1999
Direct-Shipping Battle Moves to House

May 19, 1999
Senate Approves Amendments to Restrict Home Delivery of Wine

March 19, 1999
Federal Legislators Craft New Bills on Direct Shipping

March 10, 1999
Senator Moves to Put More Bite Into States' Direct-Shipping Bans

For a comprehensive look at the direct shipping issue:

May 15, 1997
When Winemakers Become Criminals