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Virginia DTC Fulfillment House Regulations; ABC Endorses Winery/Fulfillment House Contract Addendum Format

In July, 2009, Virginia ABC notified Virginia Wine Shipper licensees they were prohibited from contracting with third parties for selling and shipping wine into Virginia. Since then industry has been working with Virginia ABC to outline allowable uses of third parties. The culmination of these efforts was a new Virginia regulation which took effect in November 2012 that defines how out-of-state Fulfillment Warehouses can secure the necessary approvals from Virginia ABC to continue to do business with Virginia Direct Shipper licensees.

In a temporary work-around, Virginia ABC has allowed Direct Shippers to hold more than one direct shipping license and submit separate monthly shipment reports for each shipping location. This workaround remains in place until existing extra licenses expire (one year from issue) giving Direct Shippers and Fulfillment Warehouses time to secure the new approval. Wineries must continue to maintain their primary Virginia Direct Shipper license, but no licenses for additional fulfillment locations will be approved.

In order to gain the one-time written approval via letter from the Virginia ABC, Fulfillment Warehouses must, for each winery they represent:

  1. Provide Virginia ABC with a copy of the Fulfillment Warehouse’s valid, home state public warehouse license.
  2. Provide a written agreement between the Fulfillment Warehouse and the licensed Direct Shipper, listing all shipping locations and indicating the Fulfillment Warehouse is the agent of the Direct Shipper for purposes of complying with Virginia law. Please click here for a sample of a winery/fulfillment house contract addendum that has been recently endorsed by Virginia ABC to satisfy this requirement.
  3. Maintain for 2 years and make available to Virginia ABC upon request, records of each shipment, including 1) quantity and volume, 2) brands shipped, and 3) names and addresses of Virginia recipients.

Also as of November 2012, Virginia Direct Shipper licensees are no longer able to accept orders from Virginians made through a third party marketer that are not an “agricultural cooperative”. The most common unlicensed third party marketers (marketing portals, third party providers, TPPs, flash sites, e-mail marketers or collective web site hosts) cannot satisfy these requirements and are banned from selling into Virginia on behalf of wineries. If you use such marketers that trigger sales in Virginia, you may wish to discuss this new law with your contractor, as your Virginia Direct Shipper license is at stake.

Contact Terri Cofer Beirne at tbeirne@wineinstitute.org with any questions about these Virginia laws.

- Terri Cofer Beirne, Eastern Counsel, Wine Institute

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