The U.S. House and Senate have passed a measure that temporarily allows winery visitors to ship wine back home to themselves -- as long as the laws in their state of residence permit them to carry alcohol purchases personally across state lines.
The new provision, which is part of the much larger Department of Justice Appropriations Authorization Act (HR 2215), appears to apply even to some states that currently ban interstate shipments from a winery directly to the consumer. However, this point is sure to be disputed by regulators and alcohol-beverage distributors in these states, and the details that would make shipping there logistically possible have yet to be worked out.
The DOJ bill is now headed to President George W. Bush for his signature.
The wine-shipping measure grew out of the airline security precautions instituted after Sept. 11, 2001, particularly the restrictions on the number, size and type of carry-on bags, according to Steve Gross, state relations manager for the Wine Institute, a San Francisco—based association of more than 600 California wineries.
After hearing media reports and customer comments that some airlines were prohibiting passengers from carrying wine onboard, wineries became concerned that the carry-on restrictions would cut into tasting-room sales. So trade groups, such as the Wine Institute and the American Vintners Association in Washington, D.C., began lobbying Congress to address the issue.
"In a situation where the state allows for people to carry something on their person back home, they should be allowed to ship the same equivalent amount back when there is a restriction on carry-on baggage," says Gross.
The shipping measure was backed by Sen. Patrick Leahy (D-Vt.) and Rep. Jim Sensenbrenner (R-Wis.), who are, respectively, the chairmen of the Senate and House judiciary committees, and Sen. Dianne Feinstein (D) and Congressman Elton Gallegly (R), both of California, which has the largest number of wineries of any state in the country.
The provision, which applies to wine only, would be in effect during any period that the Federal Aviation Administration places restrictions on airline passengers to ensure safety. Consumers must still adhere to the restrictions in their home state's personal importation laws, which typically limit the amount of wine that can be brought back at one time. An adult must purchase the wine in person at the winery for personal use only. The shipment would require an adult signature upon delivery.
The DOJ bill will not change the law in states that already allow direct shipments, nor in states that ban both direct shipments and personal importation. However, it could upset the status quo in at least 12 states that don't allow direct shipments, but do allow limited personal importation.
"It is going to result in significant change in some of the states that are tough on shipping," said David Sloane, president of the AVA. "In Florida, which is a felony state [meaning that wineries that violate the state's shipping ban are subject to felony charges], you're allowed to bring back up to 1 gallon of wine for personal use, so residents will be able to ship back that equivalent. In Texas, it's 3 gallons. Vermont is 6 gallons."
But this interpretation is disputed by the Wine and Spirits Wholesalers of America, a trade group whose members have fought in Congress and the federal courts against interstate direct-shipping, which bypasses the traditional distribution system.
"The Constitution provides that the rules under which alcohol may be delivered into a state are a matter of state law," argued Juanita Duggan, CEO and executive vice president of WSWA. She added, "Those who believe the DOJ Reauthorization language would operate to override state laws prohibiting direct shipment are mistaken. A federal statute simply cannot override the Constitution and its delegation to the states of the right to determine how alcohol may be delivered to its citizens. Therefore, in states where direct shipping is prohibited, it will remain so."
For the law to work, states that don't currently allow direct shipping are going to have to implement some regulatory procedures, and shipping companies, such as Federal Express and UPS, will have to adopt rules to handle the packages. "We don't know what the reaction is going to be," says Gross. "I've contacted them, but we haven't had an answer yet.
The wording of the measure does not specify whether the consumer has to ship the wine personally. Wine industry groups are working on the assumption that wineries would be able to handle the shipments, since the bill does not expressly prohibit wineries from doing so.
Ensuring that consumers are buying in person -- rather than trying to use the new measure as a loophole for out-of-state purchases -- would not be that difficult, Gross claims. He noted that some states -- such as Colorado, Georgia and Rhode Island -- have laws allowing direct shipments for in-person purchases and have provisions in place to deal with this. Winery staff need to keep original documents with the customer's signature -- either on a credit card receipt or another form -- to confirm that the purchase was made in person.
"I'm reasonably confident [the states] will allow this activity," said Sloane. "It's a preemptive federal requirement."
He added that the measure was important for the wine industry because Congress was finally "acknowledging the legitimacy of direct shipments as a means of getting a product from wineries to consumers. ... It's a blow for freedom."