This week, Texas opened its market to direct-to-consumer shipments of wine that had previously been banned. But the winery industry and package carriers are still working out the details of legal shipments, and not all residents will be able to call an out-of-state producer and have a case delivered to their homes.
In June, the 5th Circuit Court of Appeals ruled that Texas' liquor laws were unconstitutional because they allowed Texas wineries to ship directly to adult residents, but banned out-of-state wineries from doing the same. The court decided that both interstate and intrastate shipments should be allowed. But enforcement of that ruling had been on hold until this week, when the Texas Alcohol Beverage Commission announced that it would not seek a U.S. Supreme Court review of the 5th Circuit's decision.
"Shipments can happen," confirmed Lou Bright, general counsel for the Texas ABC. However, wine must still be transported by a carrier with a permit for alcohol beverages and cannot be shipped into "dry" areas. He added, "That state of affairs will exist until either the U.S. Supreme Court issues a new interpretation of the law, or until the Texas legislature changes our statutory structure in some way."
Package carriers such as FedEx, UPS and DHL are not yet shipping wine to the state, according to Steve Gross, state relations manager for the Wine Institute, based in San Francisco. The winery association is among the groups working to remove state restrictions on direct-to-consumer wine shipments. Half of the states in the country now allow interstate shipments.
The delay in Texas is over the issue of "dry" counties, where sales of alcohol beverages are not allowed. "The wet-dry issue is potentially troubling," said Bright. "The structure of Texas law is a real patchwork of wet-dry." He explained that the decision to allow alcohol sales is voted on by county, judicial precinct and municipality and that can only be changed by another vote. The smallest jurisdiction has final say within its boundaries, so a county could have some towns that are wet and some that are dry, or even a town that is split. In addition, there are multiple ways to define "wet" or "dry," said Bright; for example, a county could allow beer sales, but not wine, or vice versa.
"We have to have a way to let our people know what's wet and what's dry," said Gross of the institute's winery members. "We are trying to work to determine which ZIP codes are all wet … I think that's going to be the cut." However, that means some consumers may live in areas where it is legal to buy some alcohol, but still won't be able to have wine shipped to their homes.
The matter is further complicated by the differing rules for Texas wineries. Under the Texas Wine Marketing Assistance Program passed in 2001, if customers visit a Texas winery, they can have the winery ship purchases home to them. However, if they call the winery long-distance, the winery has to send the shipment to a local package store, which can then deliver it to the customer or hold it for pickup.
Bright said the ABC will be discussing with relevant parties how to set up a system to monitor legal shipments.
Read more about the court case in Texas:
For a complete overview and past news on the issue of wine shipments, check out our package on The Direct Shipping Battle.