 For the past few years, this newsletter has kept you informed about the saga of direct shipping legislation. After the Supreme Court ruled in May, 2005 that states cannot discriminate against out-of-state wine shippers by allowing only in-state wineries to ship directly to their citizens, it appeared that all state barriers to unfettered consumer choice might fall. However, the Court’s decision left interpretation of the decision up to the states, which have constitutional authority to regulate alcohol production and distribution. As a result, many states, in the nominal effort to comply with the Court ruling, have enacted legislation that throws new roadblocks in the path of wineries wishing to ship their products to consumers in other states. Two prime examples: provisions that bar wineries producing more than a specified amount of gallons annually from shipping direct (while allowing smaller producers to do so) and requiring personal contact between buyer and seller before a phone or online purchase can be transacted.
Here are some recent developments from the front lines of the direct shipping battle, reported by Cakebread Cellars senior vice-president of sales and marketing Dennis Cakebread, who remains a key figure in the movement to legalize direct shipping:
Georgia: Beginning July 1, 2008, wineries with permits can ship up to 12 cases of wine annually to consumers whose age is verified by government issued ID or age verification service.
Florida: A February, 2006 judicial order legalized direct wine shipments (except in five dry counties), although the order recently was contested in the Florida State Legislature, which narrowly upheld it.
Pennsylvania: One of the few remaining “control states” (all wine is purchased and sold by the state), Pennsylvania is considering legislation to allow direct wine shipment to consumers through the state store system, but the bill is stalled in committee.
Indiana: One of the early battleground states in the fight for legalized direct shipping recently took a step backward when a federal appeals court ruled that consumers must have face-to-face contact with a seller prior to purchase.
Massachusetts: Long one of the most restrictive states, it passed direct shipping legislation in 2006 that prohibits out-of-state wineries that produce more than 30,000
gallons annually from shipping direct to consumers. A court hearing was held in late July on a lawsuit filed by Family Winemakers of California challenging this discriminatory provision; a ruling is expected in early 2009.
Dennis says that in all these cases, as well as others in which the fate of direct shipping hangs in the balance, consumer pressure on state legislators and other elected officials to support pro-consumer legislation or resist reactionary new laws is critical. “Citizen activism on this issue has proven crucial in many states where wholesalers, intent on preserving their monopolies, have bankrolled legislative schemes to foil the Supreme Court’s ruling,” Dennis says. “Consumer pressure must continue if we’re to be successful in enshrining free choice throughout the country.” At the same time, he laments the
enormous investment of time, energy and money that wineries and their advocates have had to invest to ensure the spirit of the Supreme Court’s ruling is upheld.
“All the energy spent restricting consumer choice and erecting false barriers to interstate commerce could be better used solving real issues,” Dennis observes. To learn more about the current status of your state’s direct shipping laws, visit www.wineinstitute.org/initiatives/statesshippinglaws and click on the Direct Shipping Map. You can also sign up for email updates on direct shipping developments at www.FreetheGrapes.org.
 
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