STATES STEPPING UP COMPLIANCE CHECKS
Many states are conducting sting operations and compliance checks to ensure wineries are following their DTC shipping rules. Missouri has sent cease and desist letters to several wineries for violating the 2 cases/month/person limit.
While the vast majority of wineries are following these rules to the letter – assisted by compliance software providers – a few infractions can jeopardize shipping privileges for all wineries. Don’t be that winery.
Winery compliance has been a cornerstone of the industry’s ability to secure legal, regulated DTC shipment legislation and for removing onerous regulations. If you need additional information, please contact your regional association or Wine Institute for guidance.
LEGISLATIVE UPDATES
ALASKA. S9 passed the Senate 2/8 but was amended in the House to include spirits and beer and included reductions in shipping limits to only 3 cases per person per winery annually, and 1 case per transaction. Subsequently, Free the Grapes worked with the Wine Institute lobbying team to generate consumer and legislator support for an amendment to increase the shipping limit to 12 cases and transaction limit to two cases/transaction. The amendment was accepted and we await further details.
ALABAMA. H240 and S172 are the industry’s two “clean up” bills which address issues raised with the 2021 passage of the DTC shipping bill. Although these bills died in committee, several of the issues were resolved through other means, including the background check requirement. However, the law continues to prohibit shipments to option areas and Wine Institute has asked the AG for an opinion.
DELAWARE. HB210 – which would bring our model bill to the state – passed the House Committee on Economic Development, Banking/Insurance, and Commerce on 3/22. FTG ran a Facebook campaign through April, generating consumer letters in support of the bill.
IOWA. H2525 would allow for DTC shipping of spirits and wine over 21% ABV. H2531 would address the automatic subscription renewal process. H2122 and S2122 would remove the exemption of DTC wine bottles from the bottle recycling bill.
ILLINOIS. H2136 is a carryover bill that would add retailer DTC shipping but has not moved. H3495 and its companion S532 would create a brewer and distiller DTC license.
INDIANA. HB1257 would have allowed DTC for spirits but died in committee.
MASSACHUSETTS.
- HB335 has been amended into HB4243 and includes some unusual language around only selling wine DTC “under a brand label” owned by or licensed exclusively to the winery. Wine Institute is seeking clarification because it could be interpreted to ban DTC shipments for winery second labels.
- HB441 would require common carriers to report winery license numbers and the “quantity” of wine shipped, which they oppose because they don’t collect this information. There hasn’t been any action on this bill.
- SB2259 is a fleet licensing bill that has been attempted in MA several times. The bill passed a joint committee on transportation and is in the Senate Ways & Means Committee and may pass.
MAINE. SB44a is a separate bill that would allow for spirits DTC shipping. The bill was amended and calls for a report on the effectiveness of the wine shipping program to be reported to the legislature in February 2023, and to report on the potential benefits to spirits DTC. It passed both houses and is ready for the governor’s signature. Wine Institute is coordinating meetings to discuss the report.
MINNESOTA. H2168 would create a winery DTC license but with the current 2 case limit, and winery fees would support the Minnesota Grape & Wine Council promotion. H2675/S479 would create a new winery DTC license ($100 permit fee, 12 case shipping limit), and has passed out of three committees and as of 3/14 is in the House Committee on Taxes.
MISOURI. The state is enforcing its 2 cases/winery/person monthly limit, as well as issuing fines for wineries using the old paper-based reporting, rather than the online system.
- H2528 is a retailer DTC bill that is written into the wine statute, and removes the “wine of own production” language.
- H2555 would make it unlawful to automatically renew a subscription without prerequisites.
- H2669 would add beer and spirits to the wine DTC law, with no change to wine shipping limits, but liming beer and spirits shipments to 18 liters/month and 9 liters/month, respectively.
NEBRASKA. L80, a carryover bill that would reduce the winery license fee from $500 to $250, failed to pass. L1231, a primary source bill for in and out of state suppliers and retailers, also failed.
NEW HAMPSHIRE. S340, which would remove quantity limits for wine, beer, and spirits was considered in a work session on April 28.
NEW JERSEY. HB2432 and S549, two “capacity cap” DTC bills introduced to the 2-year legislative session, remain in committee. The bills would enable wine companies producing more than 250,000 gallons per year to apply for a winery DTC shipping license.
NEW YORK.
- AB799 and AB895, both retailer DTC bills, have not been acted upon.
- A3275/S4245 would allow spirits DTC with a 36-case/year annual shipping limit.
- SB3870 would give preferential excise tax treatment to in-state wineries, distillers, brewers, but has not moved.
- S4245, a spirits DTC bill, has not moved.
- S7740, a new bill allowing retailer DTC with a 36-case annual limit, has not moved.
OKLAHOMA.
- H1922, would require common carriers to report the volume of wine included as well as the direct shipper’s license number, and has not moved.
- H4209 creates a license for delivery services like Instacart.
- H1130, another carryover bill, relates to data privacy.
PENNSYLVANIA. HB2342, which would allow spirits DTC, has not moved.
RHODE ISLAND.
- S2420 is our model bill which would remove the on-site visit penalty. The bill was heard in committee 3/23 but failed to move.
- S69, a carryover bill that allows for retailer and wholesaler DTC, has not moved.
- H6300, another carryover bill, would impose a $2500/year license, and has not moved.
TENNESSEE. S1686, a common carrier licensing bill, was amended to the common carriers’ satisfaction and signed by the governor 3/18.
UTAH. S14 was signed by the governor 3/24. This unworkable special order provision system sets up a separate division within the DABC to manage the program and includes an 88% markup on retail pricing.
VIRGINIA.
- H300/S65, an in-state spirits DTC bill which appeared to violate the USSC ruling in Granholm v. Heald, failed.
- H1250 died in committee and would have created a “marketplace facilitator” license for in and out of state retailers.
- SB325 was signed by the governor 4/7 and eliminates the 1-gallon personal importation provision.
VERMONT.
- H376, which would have allowed foreign wineries and breweries to obtain a DTC license, failed.
- H591/s252 would create a new shipping license for spirits and fortified wine.
WASHINGTON. H1432, a carryover spirits DTC bill, failed. WEST VIRGINIA. H4848, which clarifies that wineries may have a link to an alcohol consumption chart rather than a paper copy in shipments, was signed by the governor 3/30.
