Montana's `wine connoisseur' rule shows the oddity of wine laws

 

By Matt Gouras, Associated Press

 

HELENA, Mont. (AP) To have his favorite wine shipped directly from a California winery, Montanan Gerard Lemieux wanted to make sure he did everything legally. The law, he knew, could be as twisted as an old grape vine.

 

Montana regulators said he had to buy a special state permit a ''connoisseur's license'' to have wine shipped directly to his home. Lemieux never claimed to be a connoisseur, but he shrugged it off and paid the $50.

 

Then the state said he would need to keep track of every purchase, give special shipping labels to the wineries and more paperwork to regulators and send semiannual tax filings to the state. He also would be responsible for ensuring shippers and wineries knew why it was all necessary.

 

He did it all. But in the end, it was such a hassle that Lemieux gave up. Next time he wants a few bottles from his favorite winery, he's driving to Napa Valley, filling the trunk of his car and hauling it back himself.

 

''There's nothing saying we can't do that,'' said Lemieux, a retired United Parcel Service worker from Missoula and one of just 10 Montanans holding a state connoisseur's license. ''And in the end, it's easier.''

 

Lemieux's experience is not uncommon for finicky wine lovers who find the selection at the local store lacking.

 

All states have laws to control the sale and shipment of alcohol. The wholesale industry argues they are necessary to ensure the states can collect alcohol taxes and prevent the shipment of booze directly to minors.

 

In recent years, however, the wine industry has convinced some states to make exceptions for wine, arguing that minors aren't likely to try ordering fine merlots or chardonnays to get a buzz.

 

What has resulted is a confusing array of state rules and regulations that has left wineries and wine lovers often befuddled.

 

Thirteen states now have ''reciprocal'' agreements that allow residents in one state to order wine from another state, so long as that state allows the same.

 

Fourteen states and Washington, D.C., allow wine shipments, but under tight limits or restrictions. Like Montana's law, many of the rules are so cumbersome, confusing or ambiguous that critics say wineries and even shipping companies like United Parcel Service won't ship to those states. Alaska, for instance, allows the direct shipment of a ''reasonable'' amount of wine, but never defines reasonable.

 

Wholesalers have resisted any move to exempt wine from state alcohol rules.

 

''The argument is that fine wines are not alcohol, but if you start opening the door, everything flows through,'' said Craig Wolf, an attorney for the Washington, D.C.- based Wine and Spirits Wholesalers of America.

 

For wineries, though, the myriad rules mean anytime a resident of another state places an order whether by phone, mail or through the Internet the winery is supposed to make sure shipping there is legal.

 

''We see this really as a matter of fairness for consumers,'' says Steve Gross, state relations manager for the Wine Institute, a California-based trade group. ''It seems unfair that a consumer from one state can have wine shipped to his home to enjoy and a consumer from another state is told, `Sorry, we're not allowed to ship to you because of where you live.'''

 

Truchard Vineyards of Napa Valley takes orders over the Internet, but is careful about where it ships. The company's Web site lists the states where it can ship wine unfettered. Potential buyers from other states are asked to inquire before ordering because other state rules can change ''on almost a daily basis,'' the winery says.

 

''It's a hassle,'' said Truchard's Linda Carr. ''We'd love to see things different because we're missing a huge part of the consumer market.''

 

In Massachusetts, wine makers say such laws are hampering its fledgling wine industry.

 

At the Hill Vineyard in Dartmouth, owner Robert DeGrazia has to sell ''every last drop'' of his 1,500 cases a year within Massachusetts. That state's law forbids wineries to ship directly to consumers, and his winery is too small to have been noticed by wholesale distributors.

 

''California wineries are 3,000 miles away and they're beating us up because we can't cross state lines,'' he said.

 

The disagreement has resulted in about half a dozen lawsuits from Florida to New York to Washington state usually filed by wineries or wine lovers. The lawsuits have pitted wineries and small, retail wine stores against wholesaler suppliers.

 

Court rulings in recent years have been mixed. A number of early rulings favored the states. More recent decisions, including one earlier this month in New York, favored the wine industry.

 

In New York, a federal judge ruled the state's ban on direct shipments interferes with interstate commerce because it treats in-state and out-of-state wineries differently. New York is one of 23 states that bans direct consumer shipments of any alcohol into the state, but allows New York wineries to ship directly to consumers.

 

A challenge to Florida's ban on direct sales is up in the air after a federal appeals court ordered the state to justify why it also treats out-of-state wineries differently than in-state wineries.

 

Both sides of the debate acknowledge that direct shipments, if allowed in all 50 states, would still probably amount to only a small portion of all wine sales. Currently, direct shipments, including sales directly from winery tasting rooms, account for less than 10 percent of all wine sales, according to one Wine Institute estimate.

 

In addition, a survey by the Wine and Spirits Wholesalers of America found that 86 percent of wine drinkers are happy with their local selection of wine.

 

''It's a very elitist, minority issue,'' said the wholesalers group's Wolf. ''They speak loudly, but in terms of the actual interest in wines not available locally, it's very small. And they would tear down an entire regulatory system to get what they want.''

 

But Gross, with the Wine Institute, said direct sales are vital to many of the nation's smaller wineries.

 

''A lot of wineries, their biggest sales are right out of their tasting rooms,'' he said.

 

Wholesalers note there already are online alcohol retailers who blatantly violate state laws for direct shipments.

 

One site brags that it will ship any alcohol to all but six states. ''By placing this order you agree that you are at least 21 years of age,'' one Web site reads.

 

''The regulations are being ignored nationwide,'' Wolf said. ''It's going to keep happening until some kid orders online and ends up killing someone.''

 

Richard Waddington, who runs an Internet wine shop called OnLineVines.com from Washington D.C., said it is up to the wine industry to find a workable solution and stop engaging in courthouse and statehouse battles.

 

''There just needs to be some sort of compromise,'' he said.

 

A breakdown of how states regulate the shipment of wine directly to consumers:

 

Shipments allowed on a reciprocal basis:

 

California, Colorado, Hawaii, Idaho, Illinois, Iowa, Minnesota, Missouri, New Mexico, Oregon, Washington, Wisconsin, West Virginia.

 

Shipments allowed with restrictions or special permits:

 

Alaska, Arizona, Connecticut, Georgia, Louisiana, Maryland, Montana, Nebraska, Nevada, New Hampshire, North Dakota, Pennsylvania, Rhode Island, Wyoming, Washington, D.C.

 

Shipments prohibited:

 

Alabama, Arkansas, Delaware, Florida, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigin, Mississippi, New Jersey, New York, North Carolina, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia.

 

Source: Wine Institute

 

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On the Net:

 

www.OnLineVines.com: Specialists in rare wines

 

www.wineinstitute.org: Wine industry lobbyists

 

www.freethegrapes.org: Group that supports wine law reform

 

www.wswa.org/: Wine and Spirits Wholesalers of America

 

http://www.americanleasing.com/recommendations/Winery%20pages/shippingwine.htm