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Wine Laws Changing in up to 7 States

Winery direct shipping coming to Maryland and New Mexico

Robert Taylor
Posted: April 29, 2011

State legislatures are in session across the nation, and even as lawmakers grapple with budget deficits and redistricting, wine is on the agenda as well. Legislators in more than a half-dozen states have introduced new wine legislation this year. In several states, the fight to legalize winery direct shipping continued. Georgia politicians finally repealed the state's blue laws forbidding alcohol sales on Sundays. Tennessee legislators debated allowing wine sales in grocery stores, while North Dakota weighed a bill that would have allowed in-state wineries to sell directly to retail outlets.

Here's a roundup of some of the major legislative wine fights:

Maryland

Maryland wine lovers' long wait for winery direct shipping is almost over. After passing easily in Maryland's House and Senate, House Bill 1175 is now on the desk of Gov. Martin O’Malley. He is expected to sign the bill in a ceremony on May 10, which will be followed by a wine-and-cheese tasting with state legislators. The law will go into effect July 1.

The new law will allow residents of Maryland to have up to 18 cases of wine a year shipped to their homes. Maryland will join 37 other states which now permit direct shipping in some form.

Despite HB 1175's near-unanimous support when put to a vote, it went through multiple revisions to appease members of the legislature. The original text of the bill allowed for retailers to ship wine to residents as well, but the final version excluded retailer shipping rights.

While the national Specialty Wine Retailers Association and the Association of Maryland Wine Retailers supported inclusion of retailers in the legislation, another local organization, the Maryland State Licensed Beverage Association, along with wholesalers, opposed the idea, fearing competition from out-of-state retailers. "The fact that retailers can't ship into Maryland means that no foreign wines can be shipped to Marylanders, because it's only retailers that sell French, German, Austrian, Australian wines," said SWRA president Tom Wark. "It's problematic, and that's the case in every state where retailers can't ship. It's illegal to ship in non-domestic wines."

New Mexico

New Mexico's Gov. Susana Martinez signed Senate Bill 445 on April 6, granting residents all-access rights to winery direct shipping, effective July 1. New Mexico is currently the only state with a reciprocal direct-shipping law, meaning residents could receive wine shipments from any state which also allows New Mexico wineries to ship to its residents.

With the purchase of an annual $50 permit fee, now any winery in the United States can ship up to two cases of wine per month to New Mexico residents. New Mexico's reciprocal shipping policy regarding retailers remains in effect.

New Jersey

Winery direct shipping appeared to be a certainty for New Jersey residents earlier this year; now it's become a question mark.

Senate Bill 766, permitting winery direct shipment to New Jersey residents, passed on March 11. That bill has now been scrapped, however, and replaced by SB 2782, sponsored by the same lawmaker who submitted SB 766, state Senate President Stephen Sweeney.

The bill addresses the recent ruling of the U.S. Court of Appeals for the Third Circuit declaring New Jersey wineries' satellite tasting rooms illegal and allows for direct shipment of wine to New Jersey residents as long as the winery doesn't make more than 250,000 gallons of wine a year. Known as a "cap-limit" shipping bill, SB 2782 would exclude the majority of wineries across the United States from shipping into the state. An identical companion bill sponsored by state Reps. John Burzichelli and Alison McHose, Assembly Bill 3897, is also under consideration. The state assembly resumes its session in May.

Pennsylvania

Pennsylvanians may gain the right to receive direct shipments of wine, surprisingly, since Pennsylvania is what is known as a control state, in which alcohol sales are run by the state's liquor control board rather than by independent retailers. Control states such as Pennsylvania, Utah and Montana are among the last of the dozen holdouts still prohibiting winery direct shipping, though control state Maryland will now open its doors.

Four different direct shipping bills have been introduced in Pennsylvania this session. All four bills allow for the direct shipment of wine to consumers, although they are all likely to be revised before receiving committee attention, possibly in May. "We're thrilled," said Terri Cofer Beirne, Eastern counsel for the Wine Institute, a consumer and winery advocacy group. "I'm getting amazing feedback. I was talking to Joe Conti [executive officer of the Pennsylvania Liquor Control Board], who told me the board had had a change of heart, and they were supporting direct-to-consumer sales now."

Tennessee

A bill that would allow for wine sales in Tennessee grocery stores, introduced by state Rep. Jon Lundberg, was killed by the House State and Local Government Subcommittee on April 13, despite the support of the Tennessee Grocers and Convenience Store Association, whose slogan has been "Why Not Wine?"

This is the fifth straight year that a bill supporting wine sales in grocery stores has died in committee. Opposition to the bill has come largely from the state's liquor store owners and the Wine and Spirit Wholesalers of Tennessee. Following the vote, wholesaler lobbyist Tom Hensley told the Tennessee Times Free Press, "No wine before its time."

North Dakota

North Dakota's eight wineries have been denied the right to sell wine directly to retailers. (They can sell directly to consumers.) North Dakota's state House passed a bill allowing it by a vote of 62 to 31 earlier this year, but the bill was rejected by the state Senate.

The bill would have allowed in-state wineries, which often struggle to find wholesalers, to sell directly to retailers. But out-of-state wineries would have been excluded, creating a potential conflict with the U.S. Constitution's Commerce Clause, which prohibits discrimination between in- and out-of-state commerce and opened the floodgates for winery direct shipping laws after the Supreme Court's landmark Granholm decision in 2005.

Georgia

Georgia state Senate Bill 10, which allows for liquor sales on Sundays, was passed by the state Senate March 16 and the House earlier this month. Gov. Nathan Deal signed the bill Thursday, and it takes effect July 1.

Georgia will join 47 other states in allowing liquor sales on Sundays, leaving just Connecticut and Indiana as the country's remaining blue-law holdouts.

Florida

Florida legislators have introduced two bills, Senate Bill 854 and House Bill 837, that would place a capacity cap on the production volume of wineries permitted to sell to Florida residents. This is the fifth consecutive year that such bills have been introduced in Florida, although the current session is so close to ending that it's unlikely they will see a vote this year.

Kevin Kelly
Pennsylvania —  April 29, 2011 11:59pm ET
The state of Pennsylvania is going through a budget deficit just like many other states across the country. The state government is being pressured to seek ways to close the budget deficit. The citizens are in favor of selling the rights and make a large one-time profit to help balance the budget. I believe this is an attempt to appease the wine purchasers in the state from supporting such a measure. History has proven the state has always done everything in its power to not allow direct sales.
Capital Beer & Wine
Bethesda, MD —  April 30, 2011 11:03pm ET
Maryland's direct shipping law has significant red tape involved. For instance, the producer must file quarterly reports which detail how much wine was sent to whom and when it was sent. Also the producer will have to post a bond to insure payment of state sales taxes.

Maryland is not a control state a such. However, Montgomery County Maryland is a control jurisdiction and all alcoholic beverages (with some minor exceptions) have to be bought from the County. Additionally, two other counties are control jurisdictions with respect to spirits only. Maryland also forbids chains. So independent grocery stores - there aren't many - can sell alcoholic beverages.

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