Archive for July, 2007
Ohio adopts restrictive permit system
July 30th, 2007
On June 30th, Ohio Governor Ted Strickland signed the fiscal year 2008-09 budget bill. Similar to the current legislative maneuvering in Wisconsin, this was an unusual development to see wine shipping provisions inserted into a state budget bill. As we reported earlier, the law changes Ohio’s court ordered open status for shipping wines to a limited/direct permit shipping state.
This bill presents a number of issues. First, the capacity cap restricts wineries that produce more than 150,000 gallons (roughly 63,000 cases) annually from receiving a permit. Additionally, the following sentence in the bill has everyone scratching their heads.
Sec. 4303.233. No family household shall purchase more than twenty-four cases of nine-liter bottles of wine in one year.
What exactly does “family household” mean? Did they really mean to say “nine-liter bottles”? I don’t think that any family in Ohio would ever really purchase twenty-four Salmanazars in one year, but how would one convert that into standard 750 mL bottles? Is this a Massachusetts/Indiana-style volume limit where the limit applies to the household across all wineries? If so, how could a winery in California possibly know how much volume has shipped to their Ohio customers from other wineries across the country? Finally, does one year mean one calendar year or any rolling 365 day period? Hopefully Ohio will answer all of these questions very clearly. If they don’t, most will likely choose not to ship to Ohio given the uncertainty around shipping the 25th “case”.
The new law is set to take effect 90 days after being signed, in this case September 28th, but the Division of Liquor Control may push this to October 1st. Stay tuned for more information once Ohio promulgates or clarifies these rules.
Free the Grapes! Fate of Wine Direct Shipping in Wisconsin Rests with Conference Committee, Governor
July 26th, 2007
From the Free the Grapes! press release:
For 20 years, Wisconsin’s wine lovers have been able to purchase wine directly from wineries licensed to do so, as well as from in-state wine retailers. But consumers will lose these privileges if the Budget Bill passes as it is currently written, according to Free the Grapes!, the national consumer grassroots coalition (http://www.freethegrapes.org/).
“These anti-consumer provisions were slipped into the Senate version of the 384-page, $66 billion, two-year Budget Bill, rather than being considered in the light of day,” said Jeremy Benson, executive director, Free the Grapes! The association is encouraging consumers to visit its website at http://www.freethegrapes.org/ and use the website to send personalized letters to state legislators and Governor Doyle. The organization points out three provisions that will effectively cut-off consumers from their favorite wines and wineries, and punish Wisconsin’s emerging wine industry:
** A Low-Tech Throwback to Paper Signatures: Each of the growing number of states (34) that allow legal, regulated direct-to-consumer shipments, including Wisconsin, allow electronic signature at the point of delivery by freight companies like FedEx and UPS. The Budget Bill’s language would require freight companies to gather paper signatures of the recipient and report these paper documents to the State, a process they probably cannot comply with. Additionally, the language requires that drivers collect a written “attestation” that the recipient was not intoxicated at the time of delivery.
** Cumbersome Shipping Limits: While shipping limits are standard in other states, Wisconsin’s current Budget Bill will limit shipments per individual rather than per winery, the standard in most other states. Because wineries cannot be sure how much wine an individual has purchased directly from others, wineries will not risk the penalties of non-compliance. Only Indiana and Massachusetts have included a per consumer aggregate purchase limit in their existing statutes; these two states are considered “prohibited” by wineries and FedEx. The proposed language also reduces consumer benefits of legal direct shipping by lowering the case limit from three cases per winery per consumer, to three cases per consumer (from all wineries).
** Regressive Licensing Fees. The Budget Bill is proposing the most regressive and onerous winery licensing fees of any state. For many wineries, the license fee will exceed the profit on wines shipped and wineries will be forced to cut-off consumers from their wine club programs
The next step for the budget bill is in the conference committee to reconcile differences in the budget between the Senate and Assembly versions.
Free the Grapes! Fate of Wine Direct Shipping in Wisconsin Rests with Conference Committee, Governor
July 26th, 2007
From the Free the Grapes! press release:
For 20 years, Wisconsin’s wine lovers have been able to purchase wine directly from wineries licensed to do so, as well as from in-state wine retailers. But consumers will lose these privileges if the Budget Bill passes as it is currently written, according to Free the Grapes!, the national consumer grassroots coalition (http://www.freethegrapes.org/).
“These anti-consumer provisions were slipped into the Senate version of the 384-page, $66 billion, two-year Budget Bill, rather than being considered in the light of day,” said Jeremy Benson, executive director, Free the Grapes! The association is encouraging consumers to visit its website at http://www.freethegrapes.org/ and use the website to send personalized letters to state legislators and Governor Doyle. The organization points out three provisions that will effectively cut-off consumers from their favorite wines and wineries, and punish Wisconsin’s emerging wine industry:
** A Low-Tech Throwback to Paper Signatures: Each of the growing number of states (34) that allow legal, regulated direct-to-consumer shipments, including Wisconsin, allow electronic signature at the point of delivery by freight companies like FedEx and UPS. The Budget Bill’s language would require freight companies to gather paper signatures of the recipient and report these paper documents to the State, a process they probably cannot comply with. Additionally, the language requires that drivers collect a written “attestation” that the recipient was not intoxicated at the time of delivery.
** Cumbersome Shipping Limits: While shipping limits are standard in other states, Wisconsin’s current Budget Bill will limit shipments per individual rather than per winery, the standard in most other states. Because wineries cannot be sure how much wine an individual has purchased directly from others, wineries will not risk the penalties of non-compliance. Only Indiana and Massachusetts have included a per consumer aggregate purchase limit in their existing statutes; these two states are considered “prohibited” by wineries and FedEx. The proposed language also reduces consumer benefits of legal direct shipping by lowering the case limit from three cases per winery per consumer, to three cases per consumer (from all wineries).
** Regressive Licensing Fees. The Budget Bill is proposing the most regressive and onerous winery licensing fees of any state. For many wineries, the license fee will exceed the profit on wines shipped and wineries will be forced to cut-off consumers from their wine club programs
The next step for the budget bill is in the conference committee to reconcile differences in the budget between the Senate and Assembly versions.
Missouri Direct Wine Shipper Applications Available
July 25th, 2007
The Governor of Missouri has signed SB 299 transitioning Missouri from a reciprocal state to a permit state. As of August 28, 2007 wineries will be required to have a Direct Wine Shipper’s Permit issued by the Missouri Division of Alcohol and Tobacco Control (ATC) and pay excise taxes in order to ship to MO consumers. The permit applications and instructions are now available on the Wine Institute website.
The application must be notarized and applicants must attach a current copy of the alcohol beverage license issued by their state of residence and a copy of the winery license from the TTB. There is no application fee. The Direct Wine Shipper’s Permit allows wineries to ship up to two cases of wine each month to a consumer. Direct Wine Shippers must submit a report by January 31 of each year stating the total amount of wine shipped into the state the preceding year and pay excise taxes. The permit does not require wineries to pay sales tax.
Completed applications should be mailed to Liquor Control Division, P.O. Box 837, Jefferson City, MO 65102. The ATC expects to begin processing applications the week before the new law goes into effect. Approved permits will be mailed to the applicants. As of August 28, 2007 wineries should not ship to MO consumers until they have received their approved permit. Should you have any questions please contact Annie Bones at the Wine Institute at 415-356-7530.
Update: The Direct Wine Shipper’s Application posted on the Missouri Division of Alcohol and Tobacco and Wine Institute websites earlier this week is being revised. Wineries should disregard the application originally posted. Wineries will be notified as soon as the updated application becomes available.
Missouri ATC Updates Direct Shipper Information
July 24th, 2007
The Missouri ATC updated its website yesterday with its interpretation of SB 299. As noted in our previous post, SB 299 changes Missouri’s shipping status from a reciprocal shipping state to a limited/direct shipping state for wineries. After August 28th, there will remain only five winery reciprocal states (OR, NM, IA, IL, and WI). Oregon will also move into the limited direct category effective January 1st, 2008 if the new legislation is signed by the Governor.
According to the Missouri ATC, all wineries, regardless of their location, will be allowed to ship directly to Missouri consumers until August 28th, 2007 when the law takes effect. However, “beginning August 28th, 2007, wine manufacturers will be required to have a license to ship wine directly to consumers, only ship wine using licensed alcohol carriers and pay excise taxes on wine shipments to consumers.”
An interesting aspect of the new Missouri law is its interpretation of reciprocity for out-of-state retailers. In effects, the new law continues to allow:
Missouri retailers to ship wine directly to consumers. Section 311.462, RSMo, provides that a holder of a retailer alcoholic beverage license in this state may ship wine, for personal use and not for resale, to any adult resident in this state. However, the following restrictions are in place: 1. May ship no more than two cases of wine annually to adult consumers. 2. The shipping container shall be clearly labeled to indicate that the package cannot be delivered to a person under the age of twenty-one years or to an intoxicated person. 3. Prohibits soliciting and advertising of wine shipments
But, the ATC interpretation states:
It remains illegal for out-of-state retailers to ship directly to consumers from any state other then reciprocal states per Section 311.462, RSMo. However, as of August 28, 2007, no other state affords Missouri retailers shipping privileges without permits or excise taxes due. Therefore, shipping by out-of-state retailers into the state of Missouri is not allowed.
Finally, the electronic application as it stands is all but unworkable. There are multiple steps in the process each more confusing than the last and prone to errors. We will have more information on simplifying this process in the next day or two.
Update: The ATC just removed the link to the Word document with direct shipping information. They also removed the electronic application for wine shippers. Stay tuned…
