August 17th, 2009
New rules in Texas should benefit Lone Star consumers, and also make life a little easier for wineries. On June 19th, Texas Governor Rick Perry signed into law HB 1084, which will take effect on September 1st, 2009. Under the new rules, three different volume limits replace the existing set of two limits for licensed shippers.
Currently, licensees may ship up to three gallons of wine within “any 30-day period”. This rule was perhaps the most difficult, and most commonly violated rule in a compliance check out of all state limitations. First, three gallons translates to just over 15 standard 750 mL bottles, whereas most states stick to a standard case or two-case limit. More importantly, the “rolling” 30-day period was very problematic to track for wineries that did not use an automated compliance solution. The majority of state volume limits are tracked on a calendar (month or year) basis, but this effectively created 365 different 30 day periods to track.
The new bill establishes three different volume limits for direct shipments to Texas:
- No more than nine gallons (46 bottles) to the same consumer within any calendar month
- No more than 36 gallons (181 bottles) to the same consumer within any 12-month period
- No more than 35,000 gallons (14,721 cases) to all Texas consumers annually
Although some coverage of the changes has highlighted a “tripling” of the volume limit (from 3 gallons to 9 gallons), the annual consumer limit actually stays the same at 36 gallons. According to the House Research Organization’s bill analysis,
Increasing from three to nine gallons the maximum amount of shipments to the same consumer within a month would acknowledge the unique seasonal requirements of wineries as well as the realities of Texas summers. Wine is a perishable product that spoils at temperatures above 75 degrees Fahrenheit, so many out-of-state wineries are reluctant to ship to Texas, especially during July and August.
CSHB 1084 would not increase the overall amount of wine that a winery or out-of-state shipper could ship to the same consumer per year. In fact, it would codify in statute the current limit of 36 gallons per year, which is based on the existing restriction of no more than three gallons per month. It simply would allow wineries to ship somewhat larger quantities of wine to Texas consumers during the cooler seasons of the year.