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State Legislature Group Weighs In on Direct Shipping

Dana Nigro
Posted: July 30, 1999

Entering the debate over online and mail-order sales of wine, the National Conference of State Legislatures adopted a resolution on July 28 indicating its support for allowing companies to ship wine directly to consumers. The measure also criticizes federal legislation pending in Congress that would help states crack down on such direct shipments.

At the group's annual meeting, in Indianapolis, NCSL members voted 42 to 7 to pass the resolution, introduced by New Hampshire state legislator John Hunt. The subject was brought up in light of the debate in the U.S. House of Representatives over a bill that would give state attorneys general the right to seek a federal court injunction against companies that violate state laws on direct shipments of alcohol. The legislation, sponsored by Rep. Joe Scarborough, R-Fla., may be voted on next week. The Senate has already approved a similar measure as part of a complex juvenile-justice bill.

Though the resolution does not refer to either bill by name, it states, "Such legislation would be duplicative of the authority which Congress has already granted to the U.S. Bureau of Alcohol, Tobacco and Firearms, and thus become an unnecessary and costly burden on legitimate business throughout the United States." The measure adds that NCSL "will oppose any unnecessary federal interference in the enforcement of state laws."

Much of the rest of the wording discusses the wine industry's economic benefits, including the number of jobs it creates and the tax revenue it generates. In addition, the resolution points out that direct sales across state lines give consumers choice, is often the only opportunity small wineries have to market their product and has helped the wine industry grow.

Free the Grapes!, a group of wine lovers lobbying against restrictions on direct shipping, hailed the resolution as a condemnation of the Scarborough bill. "The states are making it clear this legislation is not for their benefit," said executive director Jeremy Benson.

The Wine and Spirits Wholesalers of America, on the other hand, said that the move was not as clear-cut. "This particular resolution is so watered down -- and does not address so many things about direct shipping -- that I would say it carries very little weight," said David Dickerson, vice president of public affairs and communication. "The resolution doesn't address a major portion of the illegal direct shipping problem: shipping across state lines by retailers and third-party marketers. Several actions in states have been against those types of businesses. The BATF has shown little interest in this issue. Regardless, state laws are being broken, so it should still lie in a state's realm of authority to enforce its own laws, which is the only thing [the Scarborough bill] tries to do."

The NCSL, which has offices in Washington, D.C., and Denver, consists of state lawmakers and legislative staff. The group has no formal lawmaking authority but provides members with research on state issues and a voice in Washington, D.C. A copy of its resolution will be distributed to all members of Congress.

To learn more about the issue of direct shipping, read our recent news report House Committee Approves Wholesaler-Backed Scarborough Bill, and our feature package Wine Wars.

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