FedEx will (not) continue delivering wine shipments to North Dakota

Update 10/22/2013: FedEx will halt shipments to North Dakota effective immediately. Official statement from FedEx below.

This communication is to confirm that FedEx Express, FedEx Ground and FedEx Home Delivery will cease transporting alcoholic beverages destined to an address in North Dakota effective immediately. FedEx has been unable to arrive at a solution that would allow compliance with the new law while protecting our customers’ shipping experience.

Despite their previous notices to wineries that FedEx will stop shipping to North Dakota consumers effective 11/1, FedEx will continue to ship while they are in discussions with state officials on the new requirements. Official statement from FedEx below:
“As of today, October 17th, 2013 FedEx and officials from the State of North Dakota are in continuing discussions about keeping the state open for shipments by licensed DTC shippers. We have been informed, that for the time being, those holding the required permits will be allowed to continue to process shipments via FedEx into the state past the previously announced stop date of November 1, 2013.”

FedEx to Halt Shipments to North Dakota

FedEx will stop shipping wine to North Dakota, effective November 1st. Please see below for a statement from FedEx sent to Wine Institute members.

Due to recent changes in North Dakota law, FedEx Express, FedEx Ground and FedEx Home Delivery will cease transporting shipments containing alcoholic beverages to and within the state of North Dakota, Effective November 1st, 2013. After that date, packages containing alcoholic beverages destined for a North Dakota address will be Returned to Shipper. We will provide further information to members in the event of future changes.”
ShipCompliant Direct users will see a “Carrier Prohibited” rule in their account effective on November 1st. This will result in a failed compliance check for any shipments with a FedEx carrier service code destined for North Dakota consumers.

To learn more about the recent changes in North Dakota, as well as new laws in Montana, Nebraska, and Arkansas, please attend our free Direct Sales Virtual Seminar on Thursday, October 17th at 10:00 PT.

TTB Halts Regulatory Functions

As a result of the government shutdown, TTB has halted regulatory functions. Licensees will not be able to access COLAs Online, Permits Online, or Formulas Online. This also means that ShipCompliant’s integration with COLAs Online will not be available during the shutdown. As soon as appropriations are made available, TTB will work on restoring these functions and we will enable the integration shortly thereafter. Please see the notice that TTB posted on their website below.

APPROPRIATIONS LAPSE NOTICE
CESSATION OF TTB OPERATIONS
WITH LIMITED ACCESS TO WWW.TTB.GOV

Due to the lapse in government funding, only web sites supporting excepted functions will be updated unless otherwise funded. Our TTB web site, www.ttb.gov, will be available during this shutdown period and you will continue to be able to file electronic payments and returns for federal excise taxes and operational reports through https://www.pay.gov/paygov/.

However, there will be no access to TTB’s eGovernment applications including, but not limited to, Permits Online, Formulas Online, and COLAs online. Other information on the web site may not be up to date, and TTB will not be able to respond to questions or comments submitted via the web site until appropriations are enacted.

TTB will suspend all non-excepted TTB operations, and no personnel will be available to respond to any inquiries, including emails, telephone calls, facsimiles, or other communications. The web site and operations will fully resume when appropriations are reenacted. TTB has directed employees NOT to report to work and they are prohibited by federal law from volunteering their services during a lapse in appropriations.

Once funding has been restored, and the government shutdown is over, we will work to restore regular service as soon as possible.

Big Changes in Arkansas for Wine and Spirits Brand Registrations

Big changes regarding alcohol regulations continue to unfold for Arkansas this year with the passage of HB 1480, now Act 1105 (signed into law shortly Arkansas’ recent direct shipping bill). Act 1105 effectively changes the current wine and spirits brand registration process. Below is a table comparing the current requirements with the new requirements outlined in the Act, which will go into effect mid-August.

Of the changes outlined above, the biggest to note is the new fee requirement of $15 per “brand label” and “brand label size” and the implementation of annual renewals. The Act defines a “brand label” as “…the label carrying the distinctive design of a brand name of a spirituous liquor or vinous liquor”. In the past, Arkansas has not required additional sizes to be separately registered, nor did they explicitly require notification of new brand label extensions.

Also noteworthy is a new license requirement for wine and spirits suppliers. The $50 license will allow producers and importers to continue to sell to Arkansas wholesalers. Those already licensed as an “Arkansas Small Farm Winery” (needed to sell wine directly to Arkansas retailers) do not need to obtain additional licenses to sell to Arkansas distributors; their existing license will suffice.

Updated procedures are not public yet, however as time draws near the effective date, Arkansas will surely release information on their implementation process. Keep an eye on the ShipCompliant blog for updates.

Limited to On-site Sales, Arkansas Passes Bill to Allow Direct Shipping

On March 21, 2013, House Bill 1749 became Act 483, signifying its passage into law. Once enacted mid-August, the state of Arkansas will be added to the list of states that allow wineries to ship wine directly to consumers — but with many limitations.

Aside from the low cost of the license, the requirements under this new shipping law limit the abilities of licensed out-of-state wineries, arguably more than any other state that currently allows direct-to-consumer wine shipping. These limitations include requiring all shipments to be purchased in person at the winery, and affixing a special, ABC-provided, shipping label to each shipment.

For those wineries interested in navigating these one-of-a-kind requirements, Arkansas consumers will no doubt enjoy the ability to ship home a case of wine after visiting their favorite wineries. No license applications or information are available as of yet. Below is a breakdown of the licensing process, as well as the requirements and restrictions to operate, as stated in the new law:

Restrictions/Requirements (not limited to the following):

  • Consumers must be physically present at the winery when purchasing the wine to be shipped to Arkansas consumers (onsite orders only)
  • Every shipment must be affixed with a shipping label provided by the ABC, costing up to an additional $10 per label
  • Collect and remit sales and excise tax, “as if the sale took place on the premises of a Arkansas Small Farm Winery”
  • Ship only to a private residence – added difficulty, as shipments require an adult signature
  • Customer volume limit of one case per customer, per quarter

Licensing Process

  • Registration with the Arkansas Department of Finance and Administration Alcoholic Beverage Control Division (ABC), including a $25 annual fee.
  • Provide the ABC with a copy of the winery’s home-state license as well as the winery’s TTB Federal Basic Permit

The Pac Northwest is Heating Up! Learn How to Harness the Growth

Next week, our team will be in Napa to celebrate our 8th annual DIRECT Conference. If you’ll be in the area on June 13th, we’d love for you to attend!

But did you know that we’ll also be holding events in Oregon and Washington this month?

It’s easy to see why hundreds of brands in the Pac Northwest have begun to use ShipCompliant in the past few years; the region is now a formidable force in direct-to-consumer sales. When we compiled our 2013 Direct Shipping Report, we saw growth across the entire market, but Oregon and Washington stood out as outperformers. Though their direct wine sales are about one fifth of Napa’s, the upward trend is hard to ignore.


Let’s take a closer look at Washington.


According to our 2013 Direct Shipping Report, the Evergreen State has seen monumental growth in its wine industry, with year over year volume growth of more than 18% in 2012.Not only that, but the average price of a bottle from Washington has risen 19%. This has pushed the market past the $50 million mark for the first time last year, and is showing no signs of slowing down.

It also seems that the best food pairing for a glass of Washington Cabernet Sauvignon, is, in fact, another glass of Washington Cabernet Sauvignon. Sales of the varietal have shot up over 69% in the past year. Cabernets, Syrahs, and blends now represent 70% of the state’s market for wine by volume.

Heading south a bit, our friends in Oregon have also enjoyed huge success in recent years. The state boasted a 10% gain in direct shipping sales last year, and its average price per bottle has risen to over $37, slightly above that of both Washington and Sonoma.

The 2004 Paul Giamatti film “Sideways” was set in Santa Barbara, where the actor’s character was obsessed with Pinot Noir. Based on our data, the film could have easily been set in Oregon, where the varietal represents 60% of total shipping volume, as well as the highest average bottle price at $47. No other region is more dominated by a single type of wine than the Beaver State.

The source of Oregon’s rise in direct shipping, however, is not forged by Pinot alone. Now that Oregon has established itself as a haven for aspiring grapes, more varietals have stepped up to the plate, as Pinot Noir’s annual volume remains flat. Syrah/Shiraz, Sauvignon Blanc, and Cabernet Franc have all exploded in 2012 with growth of over 100% each. Meanwhile, Cabernet Sauvignon’s average price per bottle has risen 30%, to $35. Though these varietals have a long way to go to catch up to Pinot Noir, it’s this diversity that is truly fueling the state’s rapid ascent.

We welcome this growth, and we love to see it. In fact, we’re hosting two events in the Pacific Northwest this month, along with our sponsors, Moss Adams LLP. We call it “Step-by-Step,” and we’ve designed these seminars to help wineries finance, account for, and act compliantly through the rapid positive changes happening in their businesses.

To sign up for our June 18th seminar in Oregon, click here!

To sign up foro ur June 20th seminar in Washington, click here!