July 2015 Update on Direct Shipping

    July 7, 2015

July 6, 2015

SAVE THE DATE: DTC WINE SYMPOSIUM, January 13-14, 2016

The 9th annual summit on direct marketing and sales will return to the Hilton Concord Hotel in Northern California on January 13-14, 2016.

The DTC Wine Symposium is important. It brings together the national industry under one “big tent” for two days of lively information sharing, networking, and “blue sky” thinking. Each year, more than 90% of survey respondents tell us they recommend it to their colleagues (94% in 2015).

Additionally, DTCWS is the primary contributor to Free the Grapes!, a coalition founded by the industry in 1998 to rally consumers to our cause. After 8 years, the event has raised more than $1 million for Free the Grapes’ PR campaign and Coalition for Free Trade’s legal work. Free the Grapes! has worked closely with industry representatives, the (now retired) Coalition for Free Trade, and regional associations to increase the number of legal states from 17 to 42 (43 starting January 2016) which represent 90% of the US population. In sum, the DTC Wine Symposium has played a key role in creating and streamlining a $2+ billion sales channel.

Later this summer the Steering Committee will publish the program and agenda. For a list of contacts for sponsorship and speakers, please visit http://dtcwinesymposium.com/contact/

LEGISLATIVE UPDATES

Although many legislatures have completed their sessions, there are still some important updates since our last communique.

Pennsylvania: On July 2, Governor Tom Wolf vetoed House Bill 466 which called for privatization. In his veto message, he mentions support for direct shipping:

“Modernization of our state liquor system would provide additional revenues to the Commonwealth and save important, family-sustaining jobs. We can support and bolster consumer convenience without selling an asset and risking higher prices and less selection for consumers. I am open to options for expanding the availability of wine and beer in more locations, including supermarkets.  I have also put other compromises on the table, including variable pricing, direct shipment of wine and expanding state store hours.”

(source: PennLive.com)

Separately, a favorable direct shipping bill (HB189) was amended and passed by the Senate on June 24th and is now in the House for concurrence. It was amended in the Senate to create a workable tax rate of $1.00 per gallon, plus the 6% state sales tax and local sales taxes. This was an improvement over the House version of the bill that included both the 18% Flood Tax and the 6% sales tax, both based on the retail price of the wine. If HB 189 passes as is, a winery would pay $100 for a permit allowing it to ship up to 36 cases of wine to each PA resident per calendar year. Age verification would be required by the winery.

Of course, we’re watching PA closely. 

Delaware: House Bill 134, which would have created a permit in the state, failed to move on a tied vote. A two hour hearing on the bill was held in June. The bill will now carry over to 2016.

Iowa: A bill passed to move from monthly to semi-annual reporting and became effective July1.

Rhode Island: A DTC shipping permit bill based on the model shipping language, and which would replace the current on-site requirements, failed to pass out of committee.

Wyoming: A bill doubling the amount that a winery DTC permit holder may ship to a consumer takes effect on July 1, 2015 (2 cases to 4 cases). Separately, Wine Institute reports that its members have received notices from the Wyoming Liquor Division saying that beginning July 1, 2015 wineries must suspend DTC shipments of any products that are currently listed with the Division. Wine Institute had been assured that the language applied only to Section (b) of the bill which dealt with self-distribution to retailers. Now, the Liquor Division is taking the position that all direct-sales of products already listed in the state are forbidden. Wine Institute is working to resolve the issue and find a solution.

Indiana: Senate Bill 113 was signed by the Governor and went into effect July 1. The bill removes the consumer onsite requirement, the affidavit requirement, and the bond requirement; it also changes license fees to a tiered structure (most wineries’ fee will stay at $100) and raises the capacity cap from 27k liters to 45k liters. Unfortunately, the wholesaler exclusion remains intact.

Texas: Senate Bill719 failed to pass. It would have added beer and spirits producers, brewpubs, retailers, artisan distillers and on premise accounts to the existing wine DTC statute.