–For Immediate Release–
ShipCompliant and Wines & Vines Release Annual Report Showing Value of Winery Direct Shipments Jumping 15.5% in 2014
(Boulder, COLORADO)—American wineries increased the dollar value of their direct-to-consumer shipments by an unprecedented 15.5% in 2014, with an equally record-breaking increase in the volume of those shipments. The average price per bottle of shipped wine also recovered with a 1.6% increase over 2014, according to the new ShipCompliant/Wines & Vines Wine Shipping Report released today.
The newly released annual report, a collaboration between ShipCompliant and Wines & Vines, can be downloaded at http://www.shipcompliant.com/shippingreport.
The new report on direct-to-consumer shipments held almost exclusively good news, including the fact that in 2014 the volume of shipments increased by 13.6% to 3.95 million cases — or 47.4 million bottles. In addition, the report indicates:
- Oregon wineries increased the value of direct shipments by more than 50%
- Shipments of Pinot Noir increased significantly from 2013.
- The average price of a bottle of wine shipped from wineries rose to $38.40
- Napa Valley continues to lead all other regions with more than $882 million in shipments in 2014.
- The average price of a bottle of Cabernet Sauvignon shipped from Napa Valley was $88.45
- The most expensive categories of wines experienced the largest growth in shipments in 2014.
“The growth we saw in the winery direct-to-consumer channel in 2014 was the best since we began tracking this channel in 2009,” said ShipCompliant VP of Product Jeff Carroll. “There seems very little doubt that direct shipping remains extraordinarily vibrant.”
The ShipCompliant/Wines & Vines annual wine shipping report is based on millions of transactions tracked by ShipCompliant and Wines & Vines’ database of wineries, all of which allows an accurate modeling of the entirety of the winery shipping channel.
ShipCompliant is a SaaS compliance and transaction platform for the beverage alcohol industry. With over 10 years experience, ShipCompliant provides wine, beer and spirits suppliers and importers with a full suite of web-based software tools to ensure compliance with federal and state regulations for direct and wholesale distribution. ShipCompliant works with the industry’s leading software providers and logistics companies to provide fully integrated solutions for direct and three-tier distribution. For more information visit http://www.shipcompliant.com.
About Wines & Vines
Wines & Vines offers a comprehensive collection of products providing news, information and marketing and research capabilities. Its monthly magazine, Wine & Vines, and its Directory/Buyer’s Guide and Online Marketing System provide a wide range of information solutions to the wine and grape industry. For more information visit www.winesandvines.com.
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VP Product, ShipCompliant
Jeff (at) ShipCompliant (dot) com
FedEx announced today that, effective Feb. 1, 2015, FedEx Express and FedEx Ground will open the state of Massachusetts for legal shipments of alcoholic beverages. The announcement provided the following:
- FedEx Ground and FedEx Express will both transport legal alcoholic beverage shipments into, out of and within the state of Massachusetts starting Feb. 1, 2015.
- Please note, unauthorized shipments of alcoholic beverages destined for MA prior to a Feb. 1, 2015 delivery date may not be accepted for delivery and/or returned to shipper.
- Per FedEx policy, all alcoholic beverage shipments may only be tendered by licensed entities that have executed a FedEx Alcohol Shipping Agreement.
- All alcoholic beverage shipments must comply with all FedEx policies and federal, state and local regulations.
- Wine is the only type of alcoholic beverage that is allowed to be shipped to consumers.
FedEx does not provide legal advice to third parties. Questions not related to FedEx policy should be directed to appropriate legal counsel and the Massachusetts Alcoholic Beverages Control Commission.
(The new direct-to-consumer statute goes into effect on Jan. 1, 2015. Under the new law a winery must hold a Direct Wine Shipper license that has been approved by the MA ABCC and be registered to pay excise tax in order to ship to MA consumers.)
As we discussed in a previous post, Massachusetts opening to direct shipping is probably the biggest change that we have seen in direct wine shipping since the Granholm Supreme Court decision of 2005. Over the weekend, the Massachusetts ABCC updated their website with a brief advisory on the new direct shipping law that summarizes the law and provides instructions on how to complete the permit process, and how to comply with the reporting requirements.
Click here to download the Massachusetts direct shipping application (if you are having trouble downloading the application from the Massachusetts website, click here).
Here’s a quick summary of the new law:
- Only wineries that hold a TTB license and a license to produce in and export out of their state can qualify for the Direct Wine Shipper License
- Each licensed direct shippers can ship up to 12 9-liter cases of wine to any one individual per calendar year
- Direct shipping reports will be due
on an annual basis
- Sales tax is not due for wine products, but is due for any non-wine items such as merchandise
- Excise taxes will be due on all shipments
The 7-page application is fairly straightforward, but in addition to some of the usual information (like business and business owner information), you’ll need to answer a couple out-of-the ordinary questions. Note: We’re working to clarify how to answer a few of the questions with the ABCC, and will update this post once we have more information.
- First, register with Mass Tax Connect to pay excise taxes. You’ll need to include the date you registered on the application.
- List all businesses (carriers) that will deliver wine on your behalf; carriers must hold a Winery Shipment Transportation Permit
An early concern over the new Massachusetts wine shipping law was that it did not address the issue of common carriers having to license each and every truck that delivers wine. However, a bill to allow common carriers to obtain a fleet license for the delivery of alcohol is pending in the Massachusetts legislature. It seems somewhat unlikely that the fleet license bill will move this session. But, we believe that at least one of the common carriers will begin to license each of their trucks and therefore will be able to deliver wine to Massachusetts addresses as early as the beginning of February.
- List your winery’s methods for proof of age for sale and delivery to consumers.
See our informative post on 7 tips for better age verification, listing the different age verification methods for online wine purchases
- Include with the application a copy of 1) the license(s) you hold which authorize manufacture and exportation of wine; 2) your TTB Permit; and 3) your FDA Registration
- Finally, include a check for $300. Make the check out to the “Massachusetts ABCC” and denote the name of the licensee
We expect Massachusetts will represent an extremely important opportunity for wineries. If is approved, a process that may take as long as four weeks, you can start taking orders as soon as January 1, 2015!
UPDATE: For a step-by-step guide on filling out the application form, see our following blog post, “Massachusetts DTC Applications – How to Get Started“. Please note: Applicants do NOT have to register to pay sales tax; contradictory towtheyted on the application form, however, applicants MUST apply to pay excise tax at Mass Tax Connect.
Starting with the October filing period, Indiana requires all alcohol beverage companies working in Indiana to electronically remit monthly excise tax returns and shipment reports. This method for electronic filing and payment is unique to Indiana and does not exist in any other state report.
ShipCompliant will be holding several webinars over the coming weeks to help you navigate these new requirements.
Click here to attend a webinar or sign up for a consultation.
The new Indiana report will be filed automatically for ShipCompliant AutoFile users. All other filers can use the summarized actions below to meet the new Indiana requirements.
Step 1: Register with Indiana’s Excise Tax and Bulk Filing Departments
- Send an email request to Excisetax@dor.in.gov with your FID/FEIN, to obtain your new Alcohol Beverage TID#
- To register with Indiana’s Bulk Filing Department, send an email request to email@example.com for a certificate of registration.
Step 2: Download and install the following software needed to E-File
Step 3: Generate two test .xml files and send to Indiana via the above noted software programs
Step 4: Set-up electronic payments
- Electronic Payment set-up is required for those liable for paying taxes, such as wine direct shippers
- Register for electronic payment at www.in.gov/dor/3976.htm
Submit a test payment of $0.01 to PNC Bank
If you want the full set of instructions on Indiana electronic filing start by visiting the Indiana Department of Revenue FAQ page, or contact the department via the information provided on the FAQ page for more info.
And if this all too much for you to complete by the November due date (during one of the busiest times in the year), have no fear. If you are unable to successfully submit your report through this new bulk-filing process in November, Indiana will accept a paper version of the report for this month only.
Want to avoid the hassle of reporting to Indiana altogether? Sign up for ShipCompliant AutoFile and let us worry about completing the above steps for you. Learn more about AutoFile today!
Eight years after Massachusetts passed an unworkable and overly-restrictive direct shipping bill, and four years since the same law was ruled unconstitutional by a federal court, Bay State legislators finally passed a workable direct wine shipping law that will allow out-of-state and in-state wineries to ship wine directly to state residents. The new law was included in the 2014 budget bill (see page 257), and was signed by Governor Deval Patrick this morning. Set to go into effect on January 1, 2015, the new wine shipping law will make both wineries and Massachusetts wine lovers overjoyed.
Massachusetts is ranked among the most important states that still had not passed winery direct shipping law. Massachusetts is particularly important given the size of its population and its residents’ love of wine. Only four states have higher per capita consumption rates for wine than Massachusetts.
The new direct shipping law, passed as part of the 2015 fiscal year budget, provides the following conditions for shippers:
- Only bonded wineries may apply for a direct shipping permit
- Direct Shipping License Fee: $300/winery (separate permits required for each “affiliate, franchise or subsidiary”)
- Direct Shipping License Annual Renewal Fee: $150
- Shipments limited to twelve 9-liter cases per purchaser in a calendar year
- Reports to the state must be remitted annually
- Excise Taxes must be remitted on each sale
Over the next six months, the Massachusetts Alcohol Beverage Control Commission will be responsible for creating and making available license applications for direct shippers. We will report here on those developments as well as any others that impact direct shippers.
As wineries were applying for and beginning to use the new DTC shipping licenses for on-site sales to Arkansas consumers, we learned that some of the staff in the Arkansas Department of Finance and Administration were telling holders of direct wine shipper licenses that they were responsible for collecting certain local sales and use taxes. Wine Institute’s local Arkansas counsel has received a legal opinion from the Assistant Commissioner of Revenue, Policy and Legal of the Department of Finance and Administration stating that holders of a wine shipping permit are not required to collect any local taxes. Direct shippers are responsible for collecting and remitting only the statewide sales and excise taxes.
Wineries can register and file reports online through the Arkansas Taxpayer Access Point on the Department’s website at www.arkansas.gov/dfa or manually prepare and mail in the required forms. The state gross receipts (sales) tax rate is 6.5%, in addition to a state liquor excise tax that is 3% of the sales price. Direct shippers are also responsible for paying the $0.75 per gallon wine excise tax and a $.05 wine case excise tax. If the volume of wine being reported is less than one case of wine, round up. Sales and excise taxes must be reported on a monthly basis even if no activity occurred.
Annie Bones, State Relations – Wine Institute