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Indiana Clarifies Shipping Rules – Wine Institute Recommends Member Wineries Begin Shipments

The Indiana Alcohol and Tobacco Commission, in response to a series of inquiries from Wine Institute’s Regional Counsel Nino Ciaravino and our local counsel John Keeler, today clarified their position with regard to an enforcement component of that state’s direct-to-consumer shipping statutes. Originally passed in March of 2006, Indiana’s DTC shipping statute contained provisions which had prevented WI from recommending that our winery members obtain the required permit and begin making shipments. A recent court ruling in Indiana removed one area of confusion that had related to an initial on-site visit requirement, as well as a potentially restrictive limitation for those who have a wholesaler in the state. An additional part of the law dealing with aggregate consumer case limits was more problematic and was not addressed by the courts. This requirement says that a consumer may receive no more than 216 liters (24 cases) of wine in any calendar year. This aggregate limit applies to multiple winery sources – rather than the more traditional quantity limits used in other states which limit that amount any one winery may sell to any individual consumer. Since there is no mechanism under Indiana’s statute for a winery to know if, in fact, a consumer has exceeded their 216 case limit from other sources, we have recommended wineries not make shipments until we could clarify that their winery licenses would not be in jeopardy.

Mr. Keeler, on behalf of the Wine Institute, met with the members of the Indiana Alcohol and Tobacco Commission, along with their staff, and presented our concerns. Subsequently, the Commission has agreed to the following outline for a winery to ship into the state and avoid any violation of the statutes: “…[T}he Commission, until further notice, [agrees] not to take enforcement action against the holder of a direct wine seller’s permit for violation of I.C. 7.1-3-26-14 (annual limit on wine received by a consumer), provided that: (1) the holder of the direct wine seller’s permit has not directly shipped in excess of 216 liters within the calendar year to the particular Indiana consumer; (2) the direct wine seller has no actual knowledge that the particular consumer has received in excess of 216 liters within the calendar year; and (3) at the time of the sale transaction, the consumer represents to the direct wine seller that the sale will not result in the consumer receiving in excess of 216 liters in the calendar year.”

With this very important clarification, Wine Institute is now in a position to recommend to our members that they proceed with obtaining the required permit in order to begin servicing their Indiana customers. Wineries should ensure that their order-taking procedures are modified to accommodate the special requirements outlined above in order to obtain the required assurances from the consumer that they are in compliance with Indiana’s rules. We thank you for your patience while we worked through these important details. We will be posting the necessary permit applications and background materials on our website in the next few days. For further information, please contact State Relations at (415) 356-7518.

2 Comments

  1. I spoke to the Indiana ATC today. They have suspended processing of our and all other new applications for Direct Wine Sellers Permits until further notice. I asked for clarification and they said that that was forthcoming.

    They ARE renewing existing, expiring Direct Wine Sellers Permits.

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