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Virginia Passes Fix-It Bill for Third Party Shippers

Wine Institute Eastern Counsel Terri Beirne has been working since July 2009 with the Virginia ABC Board, and representatives of Wine America and the Virginia wineries to resolve problems created by Virginia ABC Circular Letter 09-05. That Circular prohibited Virginia direct wine shippers from using any third-party service providers, namely fulfillment or pick and pack warehouses. To resolve this problem, Wine Institute drafted legislation and identified sponsors in the 2010 General Assembly to permit a third party, under the direction and control of a Virginia wine shipper license, to solicit and receive orders for wine, and to pack and ship wine.

Like sausage, the bill that started in Virginia was quite different from what passed. Most importantly, the new law allows wine shipments into Virginia from out-of-state shipper licensee through an “approved fulfillment warehouse.” The ABC is charged with developing regulations governing such approval. They will require the fulfillment warehouse to: 1) show ABC its home state license; 2) to maintain/give records that the ABC will describe; and (3) demonstrate it has a contract with a wine shipper licensee designating that fulfillment warehouse as its agent. Wine Institute will actively participate in the creation of these regulations, but it is unlikely they will be finalized before July of 2011.

The new law also creates a Virginia fulfillment warehouse license, as well as a Virginia “marketing portal” license. These two new licenses are available only to agricultural cooperatives (non-profit associations recognized by the Virginia Agricultural Cooperative Act of 5 or more growers within Virginia) operating under the direction and control of a Virginia wine shipper licensee. On behalf of wine shipper licensees, the fulfillment and marketing portal licensees can pack and ship wine for wineries/retailers, or solicit and receive orders for wine through an Internet site.

Virginia continues to permit wineries licensed as Virginia direct wine shippers to offer their wines to Virginians via their web sites. It also continues to allow retailers licensed as Virginia direct shippers to market their own inventory on a web site. However, the new law prohibits any marketing on web sites of wine not owned/possessed by the web site owner, unless done by a Virginia agricultural cooperative licensed as a marketing portal.

Unfortunately, the new law (resulting from HB 279, HB 630, SB 483 and SB 590) also raises the annual license tax for Virginia wine shipper licensees from $65 to $95. It will take effect on July 1, 2010, at which time Virginia ABC will begin to draft the regulations.

-Terri Cofer Beirne, Eastern Counsel, Wine Institute

2 Comments

  1. So, does this mean that a winery from outside the state of VA could use a third party shipper to deliver product to retailers in leiu of using a Virginia wholesaler?

  2. In answer to the question about whether a non-VA winery can use a third party to deliver product to retailers in lieu of using a retailer, the answer is NO. The use of third parties ONLY applies to wineries with a VA direct shipper license that are selling to a consumer for personal consumption. Deliveries to retailers must continue to flow through licensed Virginia wholesalers.

Trackbacks/Pingbacks

  1. NEWSFETCH - April 5, 2010 | Wine Industry Insight - [...] VA: Fix-It Shipping Bill Passes [...]
  2. WTN Blog » Blog Archive » Ship Compliant and Virgina Update on Fulfillment to Virginia - [...] http://shipcompliantblog.com/blog/2010/04/01/virginia-passes-fix-it-bill-for-third-party-shippers/ [...]

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