Despite widespread support for expanding consumer choice in wine, many consumers are still prohibited by state law from purchasing the wines they want directly from wineries and retailers.

Twenty years ago, only four states allowed for legal, regulated winery-to-consumer wine shipments. Now, 35 states allow such shipments from out of state wineries, although just 12 allow retailers to do the same. The U.S. Supreme Court, Federal Trade Commission, state alcohol regulators, and state legislators have joined consumers to help update archaic laws many of which are merely designed to entrench state-sanctioned monopolies in wine distribution.

Interstate wine shipments using a common carrier, from a winery to an adult consumer 21 years
or older, are now allowed in 35 states, which cumulatively represent 81% of wine consumption (source: Adams Wine Handbook, 2004). Such shipments are still prohibited in the following 15 states as of January 2008: AL, AR, DE, KY (felony), ME, MD (special interstate by 3-tier only),
MA, MS, MT (consumer permit - no carrier), NJ, OK, PA (special interstate by 3-tier only), SD,
TN (felony for winery to direct ship) and UT (felony for winery to direct ship).

What’s driving this consumer rights issue?

• Each vintage, more wines are produced than can be stocked or sold by wholesalers or retailers. The number of U.S. wineries increased by over 500% to more than 5,000 in the past 30 years – there is at least one winery in every state.  But U.S. wineries produce more than 10,000 new wines each vintage, and nearly all wineries are small, family-owned and operated producers. The top 50 largest wineries produce more than 87% of America’s wine. But less than 17% of U.S. wineries are represented by distributors in all 50 states (source: Wine Institute member survey, 2003).
• Consumer demand for these wines is thriving. Consumers expect to be able to purchase the wines they want, in the manner of their choosing: from retailers, at the winery, and remotely by telephone, fax, and online. The U.S. Supreme Court, Federal Trade Commission, and many state legislators support them, and support expanding consumer choice in wine.
• But wholesaler middlemen seek to protect their state-sanctioned monopolies. The number of wholesalers decreased by over 75% during the same 30-year period. Now, two or three wholesalers alone determine what wines are available in their state. The 10 largest wholesalers control 58% of the U.S. market (source: IMPACT newsletter, April 1&15, 2006).  

Solution
The Model Direct Shipping Bill satisfies consumer demand for choice in wines and how they are delivered, satisfies regulatory requirements and creates a new source for state sales tax revenues. The solution was cited by the U.S. Supreme Court in its May 2005 ruling, by the Federal Trade Commission on numerous occasions, and is working successfully in the majority of US states (including New York, Texas, Virginia, New Hampshire, and California, among others).

Proponents
Millions of wine enthusiasts, regulators and tax collector officials in states that have passed favorable legislation as well as America's 5,000+ mostly family-owned winery farms located in all 50 states, support limited, regulated direct-to-consumer shipments.

What are consumer supporters doing to support the cause? Citizens and winery plaintiffs have worked together to sue in numerous states and took the case successfully to the U.S. Supreme Court. On May 16, 2005, the High Court ruled that it is unconstitutional for states to allow their wineries to ship to their consumers, and deny that same privilege to out-of-state wineries. (For more information on the legal foundation coordinating these lawsuits visit the Coalition for Free Trade website.)

Opponents
Wine wholesalers (aka distributors) and their national trade association, the Wine & Spirit Wholesalers of America.