Will Massachusetts Wine Fans Be Allowed to Purchase Wine Via Direct Shipping?

Perhaps not. Massachusetts wine lovers will continue to be prevented from purchasing their favorite wines directly from in-state and out-of-state wineries if House Bill 4497 does not pass next week, according to Free the Grapes!, a national consumer and winery grassroots coalition.

Stuck in the House Ways & Means Committee, HB 4497 is similar to bills in the majority of U.S. states which provide for legal, regulated, winery-to-consumer shipments. Among other provisions, HB 4497 requires wineries to purchase a state-issued shipping license, to mark boxes as requiring signature at delivery, and to limit the quantity of wine shipped to individuals. The basis for HB 4497, the “model direct shipping bill,” was cited by the U.S. Supreme Court and supported by the Federal Trade Commission.

In January, the 1st Circuit U.S. Court of Appeals ruled in favor of the plaintiffs and against the state in Family Winemakers of California v. Jenkins. The lawsuit successfully challenged a 2006 law banning winery-to-consumer shipments from wineries and wine companies producing more than 30,000 gallons per year, and who retain a Massachusetts wholesaler. The 30,000 gallon capacity cap was ruled to be discriminatory and the legislature was tasked with developing a remedy.

HB 4497 removes the capacity cap and resolves a licensing issue with the common carriers (FedEx, UPS) that has prevented any wine from being shipped directly to consumers under the current statute.

Wine direct shipping has been a contentious issue during the past decade, pitting local consumers and wineries against influential Massachusetts wine and spirits wholesalers. Then Governor Mitt Romney vetoed the 2006 bill that instituted the 30,000 gallon capacity cap, but was overturned by the legislature.

Massachusetts Attorney General Martha Coakley announced earlier this year that she would not appeal a January Federal Appeals Court decision upholding an earlier District Court decision which overturned the 2005 direct shipping law. In January, the 1st U.S. Circuit Court of Appeals upheld the 2008 district court ruling that found that the state law governing direct-to-consumer shipments by wineries was unconstitutional.

The court said the law has a discriminatory effect on interstate commerce because it favors instate interests by preventing direct shipments of nearly all out-of-state wine to Massachusetts consumers while allowing direct deliveries by all Massachusetts wineries.

The flawed shipment law provided that only wineries that produce less than 30,000 gallons a year and had not used a wholesaler for distribution in the last six months could ship directly to local consumers.

The Joint Committee on Consumer Protection and Professional Licensure in February reported favorably on legislation submitted by Senator Robert O’Leary (S 176) and Representative David Torrisi (H 317). These two bills were combined into a single committee bill, H 4497, “An Act regulating the direct shipment of wine”, which provides for a $100 per winery licensing fee, requires monthly reporting and tax collections, limits shipments to four cases per consumer per year per winery and establishes stiff penalties for noncompliance. The bill also attempts to address a cost-prohibitive issue that has kept common carriers such as FedEx and UPS out of the delivery market.

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