Winery tourists

Legal barriers to wineries sending bottles of wine directly to buyers' homes have crumbled in all but five states following years of lobbying by wine industry groups. 

Contributed

Say you want a special wine. A Napa Valley wine, for example, from a certain producer. Only you live in Oklahoma and no local store or wine shop carries the wine you’re looking for.

Luckily, the winery has a website where you can order the bottle you want. You find it and place your order.

If you’re among the 94 percent of the U.S. population that lives in states where such shipping is legal, the wine can then be sent from the winery and delivered right to your doorstep. But not if you live in Oklahoma. At the start of this year, the state is still one of six with laws currently preventing shipments from wineries directly to consumers. In these states, selling or procuring wine via direct shipping remains outlawed.

For the wine industry, direct to consumer shipping — the shipment of wine from licensed wineries or retailers to adult buyers through common carriers — has grown to where more than 5 million cases of wine worth $2.33 billion were shipped nationally in 2016, statistics show.

The ability to ship direct is particularly weighty to the industry in Napa, which made up roughly half of the entire direct to consumer shipping channel in 2016 with well over $1 billion in shipments.

Given the market’s potential, the plight of potential wine buyers in states that continue to outlaw direct shipping has been the target of a decades-long national campaign by the wine industry, bent on making direct shipments legal in every state.

By year’s end, this effort will begin paying off in Oklahoma, as wine buyers will finally be able to have wine delivered right to their front doors.

Following a public relations and lobbying campaign by the wine industry, Oklahoma passed legislation in 2016 that will see the state open to direct to consumer shipping by wineries in October.

Lobbying groups included the likes of the Wine Institute, Family Winemakers of California, WineAmerica and the Napa Valley Vintners. They are now focused on pushing legislation in the five remaining states of Utah, Kentucky, Mississippi, Alabama and Delaware. Simultaneously, the groups are also at work to change laws in states that allow direct shipping, but only under certain circumstances.

“I think we’ll see bills in a number of those states,” said Steve Gross, vice president of state relations at the Wine Institute. The public policy advocacy group, which represents the California wine industry, began working on the issue in the mid-1980s, at a time when no states allowed direct shipments.

By 1997, industry efforts had brought about legislation in 17 states allowing wineries to ship directly to buyers, Gross said. Then the felony laws began. Beginning with Kentucky in 1996, several states passed bills, backed by wholesalers, making it a felony for out-of-state wineries to ship wine directly into each state.

In fighting one such bill in Florida, the wine industry groups devised a “three-legged stool” approach, Gross recalled.

Making up the three figurative legs were a lobbying effort, led by the Wine Institute, a litigation component and a public relations arm. For the litigation effort the groups founded the Coalition for Free Trade, which worked on lawsuits related to direct shipping in the various states, while for the public relations aspect, the groups created Free the Grapes!, an advocacy and consumer outreach nonprofit.

In the decades since, the groups have brought about legislation opening 44 states, as well the District of Columbia, to direct shipping. This year, Oklahoma will become the 45th state to open.

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“There’s been a lot of progress made over a long period of time,” said Executive Director of Free the Grapes!, Jeremy Benson, “but I think the number one reason why this works is that [the industry groups] got together and they realized they needed a lobbying plus litigation plus PR strategy and that’s been really what has made this entire campaign.”

In terms of litigation, ultimately the U.S. Supreme Court, in the 2004 case of Granholm v. Heald, ruled that states could not discriminate against out-of-state wineries simply because of their physical location. Thus, states must decide today whether to allow direct shipping from wineries within the state and without, or to ban all direct shipping, both interstate and intrastate.

With the Supreme Court victory and no winery-related litigation on direct to consumers for years, the Coalition for Free Trade has since been ‘retired’ from the industry campaign. The hope, Benson said, is that one day Free the Grapes! will meet a similar end.

The end goal, Benson added, “is to put in place the legal, regulated system that works for consumers, it works for wineries, it works for the regulators, it works for the tax collectors.”

For now, he remains optimistic on the legislation front, noting, “There’s been a whole lot of activity in the first few business days of this year, in a variety of different states. And it’s looking pretty good.”

Free the Grapes! will hold its annual fundraiser and summit, the Direct to Consumer Wine Symposium, this week in Concord, with Gross offering more details on the situations in the remaining states with shipping barriers.

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Wine Reporter / Copy Editor

Henry Lutz covers the local wine industry. He has been a reporter and copy editor for the Register since 2016.