November 14th, 2008
On November 4, 2008, Oklahoma voters passed State Question 743 (SQ 743) by approximately a four to one margin. The referendum opened self-distribution for in-state and out-of-state wineries to distribute to retailers and restaurants in the state of Oklahoma, with some restrictions. Self-distribution in Oklahoma is now more accessible to wineries across the country.
In-state wineries are the major beneficiaries of SQ 743. In 2000, a voter referendum approved self-distribution for in-state wineries, only to be struck down as unconstitutional in a 2006 district court decision, due to its bias against out-of-state wineries. Since then, in-state wineries have had to adhere to pre-2000 referendum laws, which require the use of the three-tier system to get products on the shelves and on the menu. But with the overwhelming approval of SQ 743 on November 4, 2008, in-state wineries that produce under 10,000 gallons annually are now able to forgo the middleman and self-distribute directly to retailers and restaurants. However, the relative ease with which in-state wineries may self-distribute is not mirrored for out-of-state wineries.
The new constitutional provision set forth by SQ 743 has also increased access to Oklahoma retailers and restaurants for out-of-state wineries, but with obvious obstacles. While out-of-state wineries can legally distribute to Oklahoma retailers and restaurants, they must own or lease the vehicles used to transport the wines. In addition, use of common or private carriers is prohibited. These delivery restrictions apply to both in-state and out-of-state wineries, but limit out-of-state wineries to a greater degree. These restrictions are not unfamiliar to one of the legislators who sponsored the bill. The Journal Record found that Representative Danny Morgan “questioned if it would be cost effective for an out-of-state winery to drive a few thousand gallons of wine all the way to Oklahoma,” an indication that those who initiated the bill knew of the barriers it would create for out-of-state wineries.
Although State Question 743 opens doors previously locked for both out-of-state and in-state wineries, a clause, stating, “If any part of this measure is found to be unconstitutional, no winemaker could sell wine directly to retail package stores or restaurants in Oklahoma” would shut and bolt those doors yet again. Tom Wark made the suggestion that wholesalers may very well utilize this clause by arguing that it is discriminatory, which would once again take away the right to self-distribute. This clause, in addition to the hoops that must be jumped through in order for a winery to self-distribute according to this referendum, adds to the complicated and uncertain situation of shipping wine to Oklahoma. State Question 743 is a step toward opening up self-distribution in Oklahoma. However, there is much to be improved upon, not least the indirect restrictions placed on out-of-state wineries.