House Separates Direct Shipping from Juvenile-Justice Bill

Dana Nigro
Posted: June 15, 1999

The juvenile-justice bill moving through the House of Representatives this week will not contain any restrictions on the shipment of wine directly to consumers, as winery trade groups had previously feared. But the issue of whether consumers should be able to have out-of-state wines delivered to their homes is far from dead in Congress.

Late last night, the House Rules Committee decided not to include two proposed direct-shipping amendments as part of HR1501, which is scheduled to be voted on by the full House later this week. Two groups of legislators had introduced competing amendments, with each side claiming that its approach would best prevent minors from purchasing alcohol over the Internet and having it shipped to them.

"We're pleased with the outcome for now," said Tom LaFaille, legislative counsel for Rep. Mike Thompson, D-Calif., who has been fighting to address the underage drinking issue in a way that would not restrict consumers' access to hard-to-find wines or hurt small wineries' ability to do business. "But it's one of those issues that's not going to die."

In recent months, Congress has become a major battleground in the economic war between alcoholic-beverage wholesalers and people who want to sell or buy wine, beer and spirits over the Internet, by phone or by mail-order.

The Senate approved restrictions on direct shipments as part of the juvenile-justice bill in late May. Now, differences between the Senate and House versions of the bill must be worked out in conference committee. In addition, separate direct-shipping bills are pending in the House.

Last week, Rep. Joe Scarborough, R-Fla., and three cosponsors introduced a bill, HR2031, calling for federal courts to enforce state bans on interstate direct shipments of alcohol. Like the nearly identical Senate amendment backed by Sen. Robert Byrd, D-W.Va., the Scarborough bill is endorsed by wholesalers, whose businesses may be threatened by the growth in direct sales of wine.

When Scarborough tried to attach his bill as an amendment to the juvenile-justice bill, Thompson and Rep. George Radanovich, R-Calif., introduced their own counterproposal. Similar to the Senate-approved version crafted by Sen. Dianne Feinstein, D-Calif., their amendment would have allowed wineries to ship directly to consumers as long as packages of alcohol are clearly labeled and package carriers check the recipient's age before delivering the product.

Supporters of this approach, including winery trade groups such as the Wine Institute and Free the Grapes!, were not that dismayed that the Thompson-Radanovich amendment was not accepted. "The Republican leadership knows that this is an industry dispute and chose to not have it spill out onto the House floor," said Robert Koch, senior vice president in the Wine Institute's Washington office. "The juvenile-justice bill is controversial enough, and therefore we're pleased that the leadership recognizes what's truly going on here." However, he stressed that the group's fight to preserve direct shipping was far from over.

Scarborough is now trying to move ahead quickly with his free-standing bill; his spokesman said that one option is to get the legislation put on the suspension calendar, which means it would go directly to the House floor without going through the committee process.

Meanwhile, as the House Rules Committee was debating the amendments yesterday, Rep. Robert Ehrlich, R-Md., finally unveiled his long-anticipated direct-shipping bill. His "State's Responsible Alcohol Access Enforcement Act," HR2094, is also intended to crack down on illegal Internet sales of wine.

Like the Byrd and Scarborough amendments, Ehrlich's bill would give states the power to seek federal injunctions to stop interstate shipments of alcohol that violate their laws. In addition, it calls for a Federal Trade Commission study to determine whether alcoholic-beverage marketing and advertising is linked to underage drinking.

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 recent state legislative news:

June 5, 1999
Maryland Makes Direct Shipping of Wine a Felony

June 4, 1999
Texas Narrowly Avoids Felony Bill on Interstate Wine Shipments

May 27, 1999
Wine Lovers Score Victory in Nevada, Mixed Results in Arizona

For a comprehensive look at the direct shipping issue:

When Winemakers Become Criminals