In Part 1 of our glossary, we covered the basics: shipping vs. delivery, fulfillment houses, direct shipper permits, and more. But the DTC wine shipping debate has plenty more vocabulary, much of it borrowed from courtrooms and statehouses. Here are 11 more terms to help you follow the conversation.
Age Verification - confirming a buyer is 21 or older. For DTC wine, this happens twice: at purchase, when the winery verifies the buyer’s age, and at the door, where carriers require an adult signature and ID check. It is the main safeguard against underage access, and a point opponents of DTC shipping often raise. Check out our recommendations for Age Verification best practices.
Bill/Legislation - a bill is a proposed law introduced in state legislatures; this could be the house or the senate. Once passed and signed by the governor, it becomes law (or legislation). Nearly every change to DTC shipping rules starts as a bill, which is why your voice matters during a legislative session. See an example of a House Bill that was recently passed into law in Delaware, and why we want to see it changed.
Commerce Clause - the part of the U.S. Constitution (Article I, Section 8) that gives Congress power over trade between the states. Courts also read it as barring states from discrimination against out-of-state businesses, an idea known as the “dormant” Commerce Clause. That principle is the legal backbone of DTC wine shipping.
Compliance - following each state’s rules for shipping wine directly to consumers. That means holding the right permits, collecting and paying taxes, filing reports, staying under volume limits, labeling packages, and using approved carriers. Because every state sets its own rules, compliance is a big part of running a DTC program. Wine Institute’s website provides a great resource for winery compliance.
Distributor - also called a wholesaler, the middle tier of the three-tier system. Distributors buy wine from producers and sell it to retailers and restaurants. DTC shipping works alongside them, reaching wine lovers with small-production and hard-to-find wines that distributors may not carry. This gives wine lovers more freedom of choice in their wine selections.
Granholm v Heald - the 2005 U.S. Supreme Court decision holding that states cannot let in-state wineries ship directly to consumers while banning out-of-state wineries from doing the same. States had to treat both equally, and most chose to open their doors rather than close them.
License - government permission to make, sell, distribute, or ship alcohol. Wineries need federal and state licenses to operate, plus a direct shipper permit or license in each state they ship to (see part 1). Retailers, distributors, and fulfillment houses carry their own licenses too. But everyone should always use their own license!
Regulation - the detailed rules a state agency, often an Alcoholic Beverage Control (ABC) board, writes to carry out a law. Legislation says what’s allowed; regulation spells out how, from forms and fees to reporting deadlines.
State Control System - a model in which the state itself acts as the wholesaler and/or retailer for some or all alcohol. Many states and jurisdictions use some form of control system for wine, spirits, or both. One example is Pennsylvania and the Pennsylvania Liquor Control Board (PLCB). Rules for DTC wine shipping in these states vary, just as they do elsewhere.
State’s Issue - shorthand for the principle that alcohol regulation belongs to the states. The 21st Amendment, which ended Prohibition in 1933, gave each state authority over alcohol coming into or sold within its borders. That’s why DTC rules differ from state to state, and why change happens one legislature at a time. Granholm set an important limit: that authority does not extend to discriminating against out-of-state businesses.
Warehouse (Warehousing) - a facility that stores wine before it is sold or shipped. A warehouse holds inventory; a fulfillment house goes a step further and picks, packs, and ships orders on a winery’s behalf. Some states regulate where a winery’s DTC inventory can be stored, so the difference matters. We explored the differences between warehousing and fulfillment on our blog.
Put your new vocabulary to work. Use our Find Your State tool to see the rules where you live, follow active bills on our legislative tracker, and take two minutes to write your legislators. Want updates when your state is in play? Sign up for our newsletter below.