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New York to Allow Direct-to-Consumer Shipments of Wine

Governor and lawmakers agree to 36-case annual limit just before legislature's summer break

Eric Arnold
Posted: June 27, 2005

Six weeks after the U.S. Supreme Court ruled that New York's wine-shipping laws were unconstitutional, the state legislature has voted to allow residents to order wine directly from producers in other states. New York wineries, which were already allowed to ship to in-state consumers, can now also sell to residents in other states that allow direct shipments.

Each winery will be permitted to sell up to 36 cases per year to any individual adult consumer.

Wineries and wine enthusiasts were kept waiting until the last possible minute, as the Senate version of the bill, SB 1490, sponsored by Sen. George Winner (R), was passed on June 24, only hours before the legislature was set to adjourn for the summer. The assembly version, AB 7379, introduced by Rep. Hermann Farrell (D), was passed two days before, but did not limit the number of cases that could be shipped.

Gov. George Pataki's press officer said that the governor has 10 days to act on the measure and he "has indicated that once the legislature sends him the bill, he will sign it." The law will take effect 120 days later.

After that time, wineries outside New York that buy a $125 permit will be able to begin shipping wine directly to New York residents. The packages will have to be conspicuously marked as containing alcohol, and the package carrier will have to obtain proof of legal drinking age and the recipient's signature upon delivery. Also, wineries will be required to pay New York sales and excise taxes. These provisions are consistent with the wine industry's "model" shipping bill, which has been passed in several other states and is under consideration in others.

The bill was briefly hung up over the issue of case limits. Lauren Carrier, press secretary for Rep. Farrell, explained that the old law allowed New York wineries to ship unlimited quantities to consumers within the state. In formulating the new legislation, Farrell decided that the same right should be extended to out-of-state wineries, which would be consistent with the Supreme Court's ruling that both in- and out-of-state wineries must be treated equally. The bill also had provisions about retailers being able to ship wine to consumers, though that language was later stripped out.

But before the Senate could vote, Pataki indicated that he would veto the bill if it didn't contain a case limit. "Originally the governor wanted two cases a month," Carrier said, "but our concern was what do you do at the holidays? What if someone's having a wedding--are they going to have to start purchasing the wine they're going to need from that vineyard months in advance?"

Pataki's office issued a statement clarifying that he didn't want someone to be able to order unlimited quantities of wine and then resell it. "The governor wanted to ensure that the legislation he signed contained the appropriate safeguards to prevent underage drinking by minors," said press officer Saleem Cheeks.

Negotiations led to lawmakers settling on limiting wineries to 36 cases per person per year. Carrier said that consumers have the choice of how they want to spread out those cases over the course of the year: three per month, all 36 at once, or anything in between.

"It's a compromise," said Ursula Massoud, cofounder of Paumanok Vineyards on Long Island's North Fork. "But we are happy with it--it's better than not shipping at all." While the winery may be able to ship fewer cases to an individual customer, it can now sell to many more customers.

"We've been working on New York for a while, so this is really exciting," said Jeremy Benson, executive director of Free The Grapes!, a national consumer-outreach organization that has been pushing for direct-shipping reform since 1998. While the new law allows wineries to grow their businesses and customers to purchase what they want, Benson said that it was equally important that many states could follow suit due to "just the amount of influence that New York has in the region in general."

Currently, nearby states such as New Jersey, Pennsylvania, Delaware, Maryland, Massachusetts and Vermont ban interstate wine shipments. Connecticut just recently passed a law allowing direct shipments.

Already, Massoud is excited about the potential. "This energized us," she said. Paumanok's wine club can now offer membership to residents of other states, and the winery is ready to expand. "Quite honestly, if the law had not been passed, I'm not sure if we'd be able to continue to go full-steam," she said. "But now with the new law we're going ahead, and next year, we're going to plant another 20 acres."

Massoud said she's not worried about the increased competition from wineries in other states. "I think it's very healthy for the whole wine industry," she said. "It's a win-win situation."

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