More wine shipping taking place, as vintners take advantage legal changes

Modern Brewery Age,  Jan 16, 2006  

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AP--This month, Napa vintner Dennis Cakebread is sending out cases of wine to thirsty New York state customers, seven long months after a Supreme Court ruling paved the way for the shipments.

"What we've learned about this is patience and persistence," said Cakebread. "These lawsuits aren't like an episode of 'L.A. Law' _ after one hour you win your case and you're off and running."

For Tom Shelton, president and CEO of Joseph Phelps Vineyards, finally being able to ship wine felt really good: "It's something we've been waiting for forever it seems."

And on a hill high above the Napa Valley, Linda and Patrick Elliott-Smith, owners of tiny Elan Vineyards, were getting their paperwork squared away after January floods knocked their power out and slowed down an already glacial bureaucratic process.

"I see the light at the end of the tunnel," said Linda Elliott-Smith.

A lot has changed since the Supreme Court opened the door to shipping wine across state lines. But change hasn't been swift in an industry that sometimes seems as rich in red tape as it is in red grapes.

"We're in a highly regulated industry. This isn't like selling sweaters," said Jeremy Benson, executive director of Free The Grapes, a Napa-based group that has been working to loosen shipping restrictions. "The regulations are there and we have to work through them."

The big shift in shipping came last spring when the Supreme Court struck down laws in New York and Michigan that allowed wineries to ship directly to in-state consumers but prohibited out-of-state businesses from doing the same thing. The court said either all wineries should be allowed to ship directly to consumers or none, a blow to the old distribution system that required a wholesaler to sell to restaurants and retailers.

The ruling was particularly important to smaller wineries that don't have the volume for wide distribution in liquor stores and supermarkets and rely on direct sales to consumers, many of whom have sampled their products on winery visits.

For a small winery like Elan, which makes about 1,000 cases a year, being able to ship is crucial, said Linda Elliott-Smith, who's had 15 cases of cabernet sauvignon paid for and ready to go to New York for a while. She offered reimbursement during the paperwork wait, but the customers, big fans of Elan's elegant reds were willing to wait. "It's nice that we have customers who are true followers."

Since the Supreme Court ruling, New York, Michigan and Ohio have loosened shipping restrictions. Texas also made shipping easier.

In December, shipping to New York became practical when the New York State Liquor Authority approved using UPS for wine shipments. FedEx also is working to get approval.

The New York law only allows shipments from states that extend similar privileges to New York vintners, which some experts say may not be constitutional. Michigan's new law, signed by the governor in December, says wineries can't ship more than 1,500 cases per year in direct-to-consumer shipments and also prohibits out-of-state wineries from selling direct to restaurants and retailers.

Still, the overall shipping picture is brighter for wineries, who have seen their potential shipping audience increase considerably.

Limited wine shipping is now permitted in Alaska, Arizona, California, Connecticut, Georgia, Louisiana, Michigan, Nebraska, Nevada, New Hampshire, New York, North Carolina, North Dakota, Ohio, Rhode Island, South Carolina, Texas, Virginia and Washington, D.C. Reciprocal shipping is permitted in Colorado, Hawaii, Idaho, Illinois, Iowa, Minnesota, Missouri, New Mexico, Oregon, Washington, West Virginia and Wisconsin. Direct shipping is still prohibited in Alabama, Arkansas, Delaware, Florida, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, Montana, New jersey, Oklahoma, Pennsylvania, South Dakota, Tennessee, Utah and Vermont. Listing provided by Wine Institute.

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