Pennsylvania Debates Wine Legislation
Direct-to-consumer wine shipments are currently legal in Pennsylvania, but most out-of-state wineries are wary to ship to Pennsylvanians because of legal uncertainties.
Wineries are hoping to smooth out legislation and open direct wine shipments once and for all. However, many think House Bill 2165 is still too restrictive, while others think it’s not restrictive enough. Under the proposed bill, wineries that produce less than 80,000 gallons of a wine a year can ship orders to the state Liquor Control Board, which would then send the wine to the consumer for a fee.
In the past, out-of-state wine shipments were banned in Pennsylvania until Granholm in 2005. A federal judge ruled in 2005 that Pennsylvania's prohibitions against out-of-state wine shipments were unconstitutional and ordered the state not to enforce the bans. Since then, the state has struggled to become compliant
Out-of-state winery proponents don’t like the volume cap or the Liquor Control Board as a middle man. Instead, they are urging the state to follow in the footsteps of New Hampshire and the 12 out of 19 control states that allow direct shipments.
New Hampshire requires direct shippers to use licensed carriers, such as Federal Express or UPS, and to report the shipments to ensure that taxes are paid. The shipments must be clearly marked as containing alcohol, and an adult must sign for them at delivery.
Critics say putting a volume cap in place unfairly allows in-state wineries to ship direct but not most out-of-state wineries. According to local reports, the bill’s sponsor, Rep. Paul Costa, admitted the volume limit was implemented for that reason.
Wholesalers and distributors who sell liquor to the LCB believe the proposed bill poses a number of problems as well. For one, out-of-state shippers would undercut state store prices, which include a 30% markup over wholesale prices, a 6% sales tax, and an 18% "Johnstown Flood tax." Wholesalers also argue that direct shipments make it harder to collect taxes but make it easier for minors to access alcohol.
The legislature is likely to be in session only briefly before the November election. Costa said he would reintroduce it next year if it didn't pass this year.
DISCUS SPENDS $1.1M ON LOBBYING
Discus spent nearly $1.1 million in the second quarter lobbying the federal government on underage drinking prevention, tax issues and other matters, according to the Associated Press. The trade group also lobbied on measures to prevent drunk driving, to lower the tax rate on distilled spirits, and on a bill that would allow the production of distilled spirits in dwelling houses.
In addition, Discus lobbied on advertising and marketing practices for distilled spirits and for the Federal Trade Reauthorization Act of 2008, as well as on food safety import measures and free trade agreement negotiations with Colombia, Korea and Panama.
TTB INVESTIGATES EIGHT FRENCH WINES
The TTB is continuing to investigate eights wines from France’s St. Emilion region on charges of fraud. Wines from Chateaux Pavie Macquin, Troplong Mondot, Belfont Belcier, Destieux, Fleur Cardinale, Grand Corbin, Grand Corbin Despagne and Monbousquet, are understood to be the focus of the investigation by the American Alcohol and Tobacco Tax and Trade Bureau (TTB), reports Decanter.
A French ruling last month demoted St. Emilion wines to the 1996 classification after it was promoted Premier Grand Cru Classe or Grand Cru Classe in 2006. The ruling was made after several “disgruntled” chateaux contested the promotion. The St Emilion classification is reportedly revised every ten years.
TEQUILA COULD SOON FACE A SHORTAGE
The tequila market could face an agave shortage in the next several years as more Mexican farmers turn to the increasingly profitable corn, beans and other food crops. Worldwide, farmers are cutting back on their trademark crops in hopes of making more money on corn or grain. However, the switch to corn could eventually result in an agave shortage and increased tequila prices. To combat this, large tequila distillers are growing their own agave or contracting with brokers.
Another concern: Mexican farmers are currently faced with an agave glut, so prices are down. As a result, they are abandoning agave in favor of more profitable crops. An agave plant takes five to seven years to mature, which makes it an unpredictable and often demoralizing investment.
In June, world food costs had risen 62% since early 2006, according to Oxford Economic Forecasting, a British consulting firm. The worldwide price of cereals such as corn and wheat was up 120%.
WSD BRIEF:
TESCO IS OPENING A CORPORATE OFFICE in Chicago, after which it will launch Fresh & Easy convenience stores in the region. A Tesco spokesperson said that Matthew Price, a real estate director at Fresh & Easy, will lead its property acquisition team in Chicago, reports Convenience Store News. However, Tesco said it is currently focused on opening stores on the west coast.
Until tomorrow, Megan
“Men who never get carried away should be.”
Malcolm Forbes
--------- Sell Day Calendar ----------
Today’s Sell Day: 11
Sell days this month: 21
Sell days this month last year: 23
This month ends on a: Fri
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
Wineries are hoping to smooth out legislation and open direct wine shipments once and for all. However, many think House Bill 2165 is still too restrictive, while others think it’s not restrictive enough. Under the proposed bill, wineries that produce less than 80,000 gallons of a wine a year can ship orders to the state Liquor Control Board, which would then send the wine to the consumer for a fee.
In the past, out-of-state wine shipments were banned in Pennsylvania until Granholm in 2005. A federal judge ruled in 2005 that Pennsylvania's prohibitions against out-of-state wine shipments were unconstitutional and ordered the state not to enforce the bans. Since then, the state has struggled to become compliant
Out-of-state winery proponents don’t like the volume cap or the Liquor Control Board as a middle man. Instead, they are urging the state to follow in the footsteps of New Hampshire and the 12 out of 19 control states that allow direct shipments.
New Hampshire requires direct shippers to use licensed carriers, such as Federal Express or UPS, and to report the shipments to ensure that taxes are paid. The shipments must be clearly marked as containing alcohol, and an adult must sign for them at delivery.
Critics say putting a volume cap in place unfairly allows in-state wineries to ship direct but not most out-of-state wineries. According to local reports, the bill’s sponsor, Rep. Paul Costa, admitted the volume limit was implemented for that reason.
Wholesalers and distributors who sell liquor to the LCB believe the proposed bill poses a number of problems as well. For one, out-of-state shippers would undercut state store prices, which include a 30% markup over wholesale prices, a 6% sales tax, and an 18% "Johnstown Flood tax." Wholesalers also argue that direct shipments make it harder to collect taxes but make it easier for minors to access alcohol.
The legislature is likely to be in session only briefly before the November election. Costa said he would reintroduce it next year if it didn't pass this year.
DISCUS SPENDS $1.1M ON LOBBYING
Discus spent nearly $1.1 million in the second quarter lobbying the federal government on underage drinking prevention, tax issues and other matters, according to the Associated Press. The trade group also lobbied on measures to prevent drunk driving, to lower the tax rate on distilled spirits, and on a bill that would allow the production of distilled spirits in dwelling houses.
In addition, Discus lobbied on advertising and marketing practices for distilled spirits and for the Federal Trade Reauthorization Act of 2008, as well as on food safety import measures and free trade agreement negotiations with Colombia, Korea and Panama.
TTB INVESTIGATES EIGHT FRENCH WINES
The TTB is continuing to investigate eights wines from France’s St. Emilion region on charges of fraud. Wines from Chateaux Pavie Macquin, Troplong Mondot, Belfont Belcier, Destieux, Fleur Cardinale, Grand Corbin, Grand Corbin Despagne and Monbousquet, are understood to be the focus of the investigation by the American Alcohol and Tobacco Tax and Trade Bureau (TTB), reports Decanter.
A French ruling last month demoted St. Emilion wines to the 1996 classification after it was promoted Premier Grand Cru Classe or Grand Cru Classe in 2006. The ruling was made after several “disgruntled” chateaux contested the promotion. The St Emilion classification is reportedly revised every ten years.
TEQUILA COULD SOON FACE A SHORTAGE
The tequila market could face an agave shortage in the next several years as more Mexican farmers turn to the increasingly profitable corn, beans and other food crops. Worldwide, farmers are cutting back on their trademark crops in hopes of making more money on corn or grain. However, the switch to corn could eventually result in an agave shortage and increased tequila prices. To combat this, large tequila distillers are growing their own agave or contracting with brokers.
Another concern: Mexican farmers are currently faced with an agave glut, so prices are down. As a result, they are abandoning agave in favor of more profitable crops. An agave plant takes five to seven years to mature, which makes it an unpredictable and often demoralizing investment.
In June, world food costs had risen 62% since early 2006, according to Oxford Economic Forecasting, a British consulting firm. The worldwide price of cereals such as corn and wheat was up 120%.
WSD BRIEF:
TESCO IS OPENING A CORPORATE OFFICE in Chicago, after which it will launch Fresh & Easy convenience stores in the region. A Tesco spokesperson said that Matthew Price, a real estate director at Fresh & Easy, will lead its property acquisition team in Chicago, reports Convenience Store News. However, Tesco said it is currently focused on opening stores on the west coast.
Until tomorrow, Megan
“Men who never get carried away should be.”
Malcolm Forbes
--------- Sell Day Calendar ----------
Today’s Sell Day: 11
Sell days this month: 21
Sell days this month last year: 23
This month ends on a: Fri
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 2:07 PM
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