Winery Victory in Massachusetts
In a big victory for wineries this week, a Massachusetts judge has overturned legislation that put a production cap on wineries that were allowed to ship directly to consumers. Yesterday’s ruling will allow wineries of all sizes to ship directly to residents.
Massachusetts’ current direct shipping policy goes as follows:
Wineries producing less than 30,000 gallons are allowed to ship with a state-issued, direct shipping permit. Wineries producing more than 30,000 gallons, but without a wholesaler in Massachusetts can also get a direct shippers permit.
However, wineries producing more than 30,000 gallons that have a Massachusetts wholesaler are prohibited from all direct shipping. This accounts for over 95% of all of the wine produced in the US each year.
Massachusetts’s wineries all fall under the 30,000 limit, which Family Winemakers believe violates the Commerce Clause because it allowed “unfettered access to the Massachusetts market,” and succeeded in banning most out-of-state wines. Yesterday’s decision in Family Winemakers of California v. Jenkins enjoins the state from enforcing those laws.
Judge Rya W. Zobel wrote that, “The legitimacy of the three-tier system cannot provide succor to a statute which allows exceptions to that system which benefit in-state interests.”
She wrote that Massachusetts General Laws chapter 138, section 19F is discriminatory because “it prevents the direct shipment of 98% of out-of-state wine to consumers but permits all wineries in Massachusetts to sell directly to consumers, retailers and wholesalers...This clearly confers disproportionate benefits on both Massachusetts wineries and wholesalers.”
Judge Zobel also wrote that the three-tier system “has the effect of giving wholesalers greater bargaining power with both wineries and retailers in states where it is mandatory to have a wholesaler.”
"We are one national market, but the Massachusetts law was blatantly discriminatory. It aimed to protect Bay State wineries, but prevented Massachusetts consumers from having access to the whole market,” said Paul Kronenberg, president of Family Winemakers.
No word yet if the state will appeal.
Ship Compliant Blog offered a great write-up on the case. Click here to view it.
DIRECTING SHIPPING ROUNDUP
Here is a summary of direct shipping legislation and court cases taking place in the rest of the country, according to FreeTheGrapes.org:
Florida remains an open shipping system. Efforts to put a 250,000 gallon cap on direct shipments were defeated in 2006, 2007 and 2008.
Georgia passed the model direct shipping bill in 2008 that is favored by wineries. It basically allows wineries with a permit to ship up to twenty-four 9-liter cases of wine annually to legal residents.
Colorado overturned legislation that required residents to visit wineries before ordering shipments.
Arizona enforces face-to-face sales, which requires consumers to visit wineries before placing shipments. It also bans shipments from wineries producing more than 20,000 gallons. Litigation is pending.
Kentucky’s law technically allows shipments from wineries producing less than 50,000 gallons, but no common carriers have approved the state for shipping. Legislation is also pending.
Ohio does not allow wineries producing more that 250,000 to ship to consumers, effective 2008.
PINOT NOIR AND RIESLING RING IN THANKSGIVING
Red wine is expected to see a boost in retail this Thanksgiving along with other traditional menu items such as cranberries, stuffing and of course turkey. According to Nielsen, “nearly 14 million bottles of wine will be served at Thanksgiving celebrations, with red wines slightly more popular than white wines. Pinot Noir and Riesling are more popular during Thanksgiving week compared to other times of the year.”
DRINKS AMERICAS ENTERS NEW COGNAC PARTNERSHIP
Drinks Americas says it has struck a deal with Domaine Maillard and Francis Abecassis, the maker of Leyrat Cognac. Chief J. Patrick Kenny said one of the challenges with taking on a cognac “was dealing with a worldwide shortage of immediate supply of high quality product.” The first shipments will arrive in the U.S. in December.
Cognac has seen a decline in the U.S. recently. In the four weeks to October 5, cognac dollar sales declined -7.5% and volume dropped -11.6% in IRI channels. In the 52 weeks, dollar sales were down -2.6% and volume declined -5.8%.
WINE.COM ADDS APPOINTMENT DELIVERY SERVICE
With new competition entering the online shipping industry – such as WSJ and Amazon – Wine.com is stepping up its game. Wine.com is now offering Saturday, date-specific and by appointment delivery, and is the only wine retailer in the U.S. to do so, according to a company statement. The wine industry is required by law to obtain adult signatures at the time of delivery, so Wine.com’s new option will help ensure a delivery can be completed on the first attempt.
The company also introduced the Wine.com Steward-Ship Program offering frequent buyers one year of free delivery on every order, regardless of size, for just $49.
"Our goal is to continue to innovate and offer the best possible customer experience," said Rich Bergsund, ceo of Wine.com.
CORRECTION. The first story in yesterday’s issue should have read: “It [Diageo] is also the seventh largest wine company in the U.S. in terms of value, and has gained share over the past two years while competitors were flat or losing share.”
Until tomorrow, Megan
“Destiny is no matter of chance. It is a matter of choice. It is not a thing to be waited for, it is a thing to be achieved.”
William Jennings Bryan
--------- Sell Day Calendar ----------
Today's Sell Day: 14
Sell days this month: 19
Sell days this month last year: 21
This month ends on a: Fri.
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
BEER SUMMIT 2009 - The Four Seasons, Austin, Texas - Join us for great speakers, intelligent discourse, good food, and of course great beer at the next Beer Summit on March 1 - 2, 2009. Click here: http://tinyurl.com/beersummit
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.
Massachusetts’ current direct shipping policy goes as follows:
Wineries producing less than 30,000 gallons are allowed to ship with a state-issued, direct shipping permit. Wineries producing more than 30,000 gallons, but without a wholesaler in Massachusetts can also get a direct shippers permit.
However, wineries producing more than 30,000 gallons that have a Massachusetts wholesaler are prohibited from all direct shipping. This accounts for over 95% of all of the wine produced in the US each year.
Massachusetts’s wineries all fall under the 30,000 limit, which Family Winemakers believe violates the Commerce Clause because it allowed “unfettered access to the Massachusetts market,” and succeeded in banning most out-of-state wines. Yesterday’s decision in Family Winemakers of California v. Jenkins enjoins the state from enforcing those laws.
Judge Rya W. Zobel wrote that, “The legitimacy of the three-tier system cannot provide succor to a statute which allows exceptions to that system which benefit in-state interests.”
She wrote that Massachusetts General Laws chapter 138, section 19F is discriminatory because “it prevents the direct shipment of 98% of out-of-state wine to consumers but permits all wineries in Massachusetts to sell directly to consumers, retailers and wholesalers...This clearly confers disproportionate benefits on both Massachusetts wineries and wholesalers.”
Judge Zobel also wrote that the three-tier system “has the effect of giving wholesalers greater bargaining power with both wineries and retailers in states where it is mandatory to have a wholesaler.”
"We are one national market, but the Massachusetts law was blatantly discriminatory. It aimed to protect Bay State wineries, but prevented Massachusetts consumers from having access to the whole market,” said Paul Kronenberg, president of Family Winemakers.
No word yet if the state will appeal.
Ship Compliant Blog offered a great write-up on the case. Click here to view it.
DIRECTING SHIPPING ROUNDUP
Here is a summary of direct shipping legislation and court cases taking place in the rest of the country, according to FreeTheGrapes.org:
Florida remains an open shipping system. Efforts to put a 250,000 gallon cap on direct shipments were defeated in 2006, 2007 and 2008.
Georgia passed the model direct shipping bill in 2008 that is favored by wineries. It basically allows wineries with a permit to ship up to twenty-four 9-liter cases of wine annually to legal residents.
Colorado overturned legislation that required residents to visit wineries before ordering shipments.
Arizona enforces face-to-face sales, which requires consumers to visit wineries before placing shipments. It also bans shipments from wineries producing more than 20,000 gallons. Litigation is pending.
Kentucky’s law technically allows shipments from wineries producing less than 50,000 gallons, but no common carriers have approved the state for shipping. Legislation is also pending.
Ohio does not allow wineries producing more that 250,000 to ship to consumers, effective 2008.
PINOT NOIR AND RIESLING RING IN THANKSGIVING
Red wine is expected to see a boost in retail this Thanksgiving along with other traditional menu items such as cranberries, stuffing and of course turkey. According to Nielsen, “nearly 14 million bottles of wine will be served at Thanksgiving celebrations, with red wines slightly more popular than white wines. Pinot Noir and Riesling are more popular during Thanksgiving week compared to other times of the year.”
DRINKS AMERICAS ENTERS NEW COGNAC PARTNERSHIP
Drinks Americas says it has struck a deal with Domaine Maillard and Francis Abecassis, the maker of Leyrat Cognac. Chief J. Patrick Kenny said one of the challenges with taking on a cognac “was dealing with a worldwide shortage of immediate supply of high quality product.” The first shipments will arrive in the U.S. in December.
Cognac has seen a decline in the U.S. recently. In the four weeks to October 5, cognac dollar sales declined -7.5% and volume dropped -11.6% in IRI channels. In the 52 weeks, dollar sales were down -2.6% and volume declined -5.8%.
WINE.COM ADDS APPOINTMENT DELIVERY SERVICE
With new competition entering the online shipping industry – such as WSJ and Amazon – Wine.com is stepping up its game. Wine.com is now offering Saturday, date-specific and by appointment delivery, and is the only wine retailer in the U.S. to do so, according to a company statement. The wine industry is required by law to obtain adult signatures at the time of delivery, so Wine.com’s new option will help ensure a delivery can be completed on the first attempt.
The company also introduced the Wine.com Steward-Ship Program offering frequent buyers one year of free delivery on every order, regardless of size, for just $49.
"Our goal is to continue to innovate and offer the best possible customer experience," said Rich Bergsund, ceo of Wine.com.
CORRECTION. The first story in yesterday’s issue should have read: “It [Diageo] is also the seventh largest wine company in the U.S. in terms of value, and has gained share over the past two years while competitors were flat or losing share.”
Until tomorrow, Megan
“Destiny is no matter of chance. It is a matter of choice. It is not a thing to be waited for, it is a thing to be achieved.”
William Jennings Bryan
--------- Sell Day Calendar ----------
Today's Sell Day: 14
Sell days this month: 19
Sell days this month last year: 21
This month ends on a: Fri.
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
BEER SUMMIT 2009 - The Four Seasons, Austin, Texas - Join us for great speakers, intelligent discourse, good food, and of course great beer at the next Beer Summit on March 1 - 2, 2009. Click here: http://tinyurl.com/beersummit
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 12:40 PM
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