“Domestic farm winery” bill passes Arizona legislature

Senate Bill 1276 passed the Arizona state House last week and now awaits Governor Janet Napolitano’s signature. SB 1276 would continue to allow for the direct shipment of orders where “the wine was purchased while the purchaser was physically present at the winery”. The bill would also allow for off-site orders, but with serious restrictions. Only “limited production wineries” would be allowed to ship off-site orders, where a limited production winery is defined by SB 1276 to mean:

A licensed domestic farm winery that produces not more than twenty thousand gallons of wine in a calendar year may make sales and deliveries of wine that the licensed domestic farm winery produces to consumers off of the licensed premises and that is ordered by telephone, mail, fax or catalogue, through the Internet or by other means.

20,000 gallons equates to roughly 8,400 cases, which means that a significant number of U.S. wineries would be excluded from shipping off-site orders to Arizona.

The good folks at Free the Grapes are encouraging Arizona residents to ask Governor Napolitano to veto this bill. From their action alert:

SB 1276 is not an incremental step in the right direction; it is a big step backwards for Arizona consumers. And if it becomes law, wholesalers who oppose direct shipping will surely promote it as a workable model for other states to adopt. This will threaten years of diligent, successful work by winemakers, legislators and regulators to enact reasonable laws that allow limited, regulated direct shipments.

If passed, this bill will almost certainly be challenged in the courts. Just when it seemed like the Granholm dust was beginning to settle, states began introducing these bills with discriminatory capacity caps. New rounds of court cases challenging these caps will mean many more changes to come in the world of wine direct shipping.

5 Comments

  1. YAY!! POWER TO THE PEOPLE!

  2. I happen to think that capacity limits, if they apply both to in state and out of state producers,
    would withstand judicial scrutiny. But it mystified me that everyone was down in Florida
    fighting their 100,000+ case limitation when AZ, with 1/12 this limit, was being ignored.
    And Arizona is a not insignificant market. TOM

  3. The Wine Istitute had a losing formula in Arizona. Their message to the legislators was: pass
    SB1276 and we will sue. Didn’t make too many friends with that one. Even those legislators
    that wanted direct shipping in Arizona wouldn’t do it without some differentiation between big
    and small producers. This opens the Arizona market to about 50% of all the wineries that are
    paying dues to the Wine Institute and about 70% of the wineries in the USA. Not a bad start
    for direct shipping in what has been a “closed” three-tier state. Maybe the glass is half-full!
    RK

  4. I believe SB1276 is a step in the right direction. For those of you that expected Arizona
    to go from one extreme to the other, you’re disappointed, but look at the potential for the small
    wineries throughout the United States. This opens the door and provides opportunities which
    were not previously available.

    Glass half-full is the right mindset to be in!

    Cory

  5. I agree with these comments. Wine glasses are now half full with many more wines
    previously unavailable. Yet I do think that some coalition should have pushed for the
    Connecticut ceiling of 100,000 gallons–such a nice round number. 42,000 cases is far
    more acceptable than 8,400 cases. I disagree with Wine Institutes all or nothing
    approach. Had there been an advocate for a cut-it-down-the-middle alternative,
    a real compromise might have been achieved.

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