September 16th, 2010
On 1/14/10 the First Circuit Court of Appeals in Boston ruled in favor the plaintiff in the Massachusetts FWC v. Jenkins litigation. The ruling affirmed the lower court’s order that struck down the capacity caps and wholesaler exclusions which are included in the Massachusetts direct-to-consumer shipping statute and prevented over half of the wineries in the United States from being eligible to ship to MA consumers. On 4/12/10 the state announced that they will not be seeking an appeal to the Supreme Court, thus leaving this decision as the final law in the 1st Circuit. Despite the favorable ruling, obstacles continue to make shipping to consumers in MA problematic.
One very serious problem with the existing law not addressed during the FWC v. Jenkins litigation is an aggregate volume limit of 240 liters (26.67 cases) per household per year. The 240 liter volume limit refers to the total amount of wine each household can receive from all licensed direct shipper each year. It is not possible for a winery to track the amount of a wine each household receives via direct-to-consumer shipments, yet the licensed shipper is liable for any shipments that cause a household to exceed the 240 liter volume limit. The Massachusetts Alcoholic Beverages Control Commission (ABCC) has not provided any guidance on how to comply with this rule.
The licensing requirements for common carriers (FedEx and UPS) pose a second problem for direct shipping to MA. MA has extremely onerous licensing requirements that are difficult for common carriers to comply with. At this time, NO common carriers have approved MA for INTERSTATE* direct-to-consumer shipping. Only FedEx Ground services MA on a limited basis, and has a license for INTRASTATE** direct-to-consumer wine shipments. The common carriers provide updates on their wine shipping status on the respective websites www.fedex.com/us/wine and www.ups.com/wine.
Legislation was drafted and introduced during the 2010 legislative session that to address the problems with common carrier licensing requirements and direct-to-consumer shipping. However the legislature was primarily focused on election year issues and adjourned without passing the bills. It is anticipated that similar legislation will be introduced in 2011.
*INTRASTATE -Commerce having an origin, destination and entire transportation within one state
**INTERSTATE-Commerce that involves transportation of goods from one state to another
–Annie Bones, State Relations – Wine Institute