Rutgers’ Study: New Jersey Restriction on Wine Direct Shipping Costs State $4 Million
Tax collections and consumer choice hurt by arbitrary cap
May 8, 2017, Napa, CA – New Jersey’s current ban on direct-to-consumer wine shipments from certain wineries costs the state $4 million each year in lost fees, as well as lost sales and excise tax collections, according to a study released today by the Eagleton Center for Public Interest Polling, part of the Eagleton Institute of Politics, at Rutgers (ECPIP), The State University of New Jersey.
Consumer choice in buying wine has never been better. In 2012 New Jersey become the 44th state to allow direct wine shipments. However, it put a limit in the law to allow some, but not all, wineries to participate. New Jersey and Ohio remain the only states banning winery-to-consumer shipments from larger wineries producing more than 250,000 gallons (or 106,000 cases) each vintage by imposing a “capacity cap” on the size of wineries eligible for a license to direct ship wine. Capacity caps also prohibit smaller wineries owned by larger wineries from shipping directly to consumers in those states. Arizona and Massachusetts recently eliminated such restrictions. According to Free the Grapes New Jersey, consumer choice in New Jersey is limited by excluding direct shipments from wineries that produce more than 90% of U.S. wine. (Read the entire release here.)
APRIL LEGISLATIVE UPDATES
Delaware: where’s the bill?
Over the past year, a task force of all segments of the wine industry, led by state legislators, has reviewed winery-to-consumer direct shipping and drafted acceptable shipping legislation. However, Delaware wholesalers, unions and retailers remain opposed to any form of DTC shipping. As you may have seen, Free the Grapes! is engaging consumers in DE, asking them to write their state legislators asking, where is the bill?
- Next Steps: Delaware wine lovers will find our update here: http://capwiz.com/freegrapes/issues/alert/?alertid=76776626
New York: New bill proposes retailer-to-consumer shipments
New York currently allows winery-to-consumer shipments but prohibits direct shipments from out of state retailers to New Yorkers. But a new bill (Assembly Bill 5991, and its companion, Senate Bill 5330) would overturn the existing ban and allow licensed out-of-state retailers to ship directly to New York consumers.
While the bills would only allow shipments from retailers located in one of the 14 other states that also allow retailer-to-consumer shipping, it is a step in the right direction. For example, it would allow shipments from retailers in California, Oregon and Virginia that also allow out-of-state retailer shipping, but not from Florida or New Jersey where it is prohibited.
- New Yorkers: Please visit our website and send a message to your state representatives. Here’s the link: http://capwiz.com/freegrapes/issues/alert/?alertid=76867626
Arkansas: terrible bill passes offering little improvement for DTC shipments
Arkansas currently has an almost unworkable law requiring wineries to obtain a permit that allows them to ship only to AR consumers making an in-person purchase at the winery. House Bill 1463, which was signed by the governor last month, makes some minor changes that will benefit primarily in-state wineries. Under the new law, wineries producing less than 250,000 gallons that hold both a DTC shipping license and a license to self-distribute their wine to retailers, can apply for a permit to allow them to do non-face-to-face shipments. The problem? Only a handful of local wineries meet these qualifications, and only 5 new licenses will be issued via a lottery in the future. This is not the fix that was needed to service Arkansas consumers, as almost all out-of-state wineries will have to abide by the old unworkable statute.
New Jersey: seeking new bill
Wine Institute is working to get a new bill introduced to eliminate the existing capacity cap that prevents wineries and wine companies with aggregate production exceeding 250,000 gallons from direct shipments. A separate bill (Assembly Bill 4656) has been introduced that seeks to remove the capacity cap but only allows shipments of “reserve” wines which they define as wines not available in New Jersey through wholesale channels. Of course, we oppose this restriction.
Next Steps: If you have NJ consumers on your email list, please include text on the following link in your next email campaigns. http://capwiz.com/freegrapes/issues/alert/?alertid=74097626
Minnesota: wholesales seeking to overturn DTC
House Bill 791 and its companion, Senate Bill 1418, look to replace DTC statutes with unacceptable provisions, including maintaining the two case shipment limit.
Oklahoma: keeping up the pressure
As previously reported, Free the Grapes! is encouraging OK consumers to write their legislators with a simple message: support plans in 2017 to introduce favorable legislation.
Next Steps: Include our copy and a link here in your next e-newsletter to OK wine lovers.
- Child Registry Bills Introduced: Idaho (H144), Missouri (H286) and New Mexico (HB240, S444) are considering similar bills which would require wineries to scrub their email lists each month for “do not email” addressees. Wine Institute is testifying against these. (You might recall these were used previously in Utah and Michigan.) The bills in Idaho and New Mexico have been defeated, and the Missouri bill has not moved out of committee.
- Maryland: House Bill 987 would limit DTC shipments to wine producer license holders only. The bill was amended to simply require a winery to identify at the time of licensure or renewal the wines manufactured by the winery that they intend to ship into the state. In its amended form , it has now gone to the Governor for his signature.
- South Dakota: House Bill 1026 was signed by the Governor February 17. It requires that DTC shippers and common carriers include the tracking number on their DTC shipping reports. This is the Dept. of Revenue’s bill to put into statute the requirement already being implemented by regulation.
- Texas: House Bill 1715 would remove the 35,000 gallon cap on how much wine both in-state and out-of-state wineries may sell directly to TX consumers.
Save the Date: DTC Wine Symposium, January 17-18, 2018
The popular Direct to Consumer Wine Symposium, the wine industry’s national summit on direct marketing and sales, will take place January 17-18, 2018 at the Hilton Concord Hotel. Program details will be available this summer and fall at www.dtcwinesymposium.com
The January 2017 summit sold out, attracting nearly 500 sponsors, speakers and registrants from 15 states. The program expanded to include 6 Workshop Sessions, 2 Town Hall Sessions and 6 Sponsor Sessions. Ninety-three percent of post-event survey respondents recommend the event, which is consistent with past years.
As previously reported, audio and video presentation files from the January summit are available for purchase. Files can be downloaded or streamed for $50/file or $250 for all 18 files at this link: https://vimeo.com/ondemand/dtcws17/ Files include Workshop Sessions, Sponsor Sessions, and four separate keynote speakers. Keynote topics range from global consumer trends and legislative updates, to 2016 shipment data and the rise of social video. (A separate link was provided in February to registrants of the 2017 event for accessing the files at no charge.)