Vintners Receive OK to Ship to Homes in Two More States
A large portion of the U.S. wine market has been opened up to California vintners who ship directly to consumers, thanks to the signatures of two East Coast governors this week.
George Pataki of New York and M. Jodi Rell of Connecticut each approved legislation that allows out-of-state wineries to sell and ship wine directly to the public in their states.
Such privileges have been the subject of a long-running battle between winemakers, who like the profits they garner from selling without a middleman, and wholesalers, who are trying to protect their market.
But the U.S. Supreme Court in May struck down New York and Michigan laws as discriminatory because they allowed only local wineries to ship directly to the public in those states.
The actions by Pataki and Rell bring to 29 the number of states that now allow wine drinkers to purchase vintages directly from out-of-state wineries, said Jeremy Benson, executive director of Free the Grapes, a wine industry and consumer coalition advocating direct shipping.
The legislation was met with approval by people working in California’s $15-billion wine industry.
“We have already e-mailed a list of 3,000 New York residents who have visited the winery and expressed interest,” said Tom Shelton, head of Joseph Phelps Vineyards.
Doug Margerum, owner of Margerum Wine Co. in Los Olivos, estimates that he ships about 15% of the 2,500 cases he produces annually to out-of-state customers, a figure he expects to grow.
“A lot of consumers are just learning about direct shipping as an option for buying wine because of all the publicity surrounding the Supreme Court decision,” Margerum said. He said it would benefit people in other states who read a favorable review of a wine but couldn’t find it on the shelves at local stores.
New York, by volume the nation’s third-largest wine-consuming state, after California and Florida, “is a huge step forward because of the size of the market and the prestige,” Benson said. On a volume basis, more than 63% of the wine market is now open to direct shipping, he said, up from 55.6% before this week’s addition of New York and Connecticut.
Laws in 21 states require out-of-state wineries to sell their products through distributors. Such regulations are an outgrowth of the 21st Amendment, which repealed Prohibition and gave states the right to regulate the sale of alcoholic beverages.
The gradual loosening of distribution rules is proving important to more than California’s industry, which accounts for about 90% of U.S. wine production.
New York’s 219 wineries typically churn out about 200 million bottles of wine each year, generating more than $1 billion in sales. New York is the nation’s third-largest wine producer, behind California and Washington.
The law “transforms the industry from a local curiosity into a national player,” said Jim Trezise, president of the New York Wine & Grape Foundation. “It’s probably the most liberal direct-shipment law in the country.”
Associated Press was used in compiling this report.
