Magazine

Uncorking Mail-Order Vino


When wine lover Scott Jameson moved from California to Texas in 1999, he was in for a rude surprise. In the Bay Area, he would drive to his favorite winery, Mount Eden Vineyards, for its limited-release pinot noir or chardonnay. But the label wasn't available in Texas, and the Lone Star state barred the winery from shipping to him directly. "Many of the wines I purchase are not distributed in Texas. They're too limited in production and sold only via winery mailing list," Jameson says.

Fortunately, many states have loosened restrictions that prevent consumers from ordering wine over the Internet, phone, or in person from out-of-state wineries. Jameson's reprieve came in the summer of 2003, after Texas lost a lawsuit challenging its ban on direct-to-consumer shipping. It took a May, 2005, U.S. Supreme Court decision to force change elsewhere. The high court ruled that Michigan, New York, and a handful of other states were illegally banning shipments from out-of-state while allowing in-state producers to make them.

Today, 34 states permit such shipping, up from 27 two years ago. "Just over 50% of the adult drinking population was able to place an order with out-of-state wineries, and now it's about 80%," says Steve Gross, director of state relations for the Wine Institute, an industry group.

Still, state shipping requirements can be as complex as a well-textured merlot. Because the federal ruling did not supersede a state's right to make the distribution rules, the laws vary widely. Some states limit out-of-state wineries' ability to ship there and some still bar it completely.

HIGHER PROFITS

In Georgia, for instance, consumers can order only from wineries not represented by a local wholesaler. Even then, the buyer must place the order in person at the winery, and may take delivery of only five cases per year. Massachusetts allows limited shipments from wineries that produce no more than 13,000 cases a year. That's so restrictive that most vintners put it on the no-ship list, along with states like Utah, where it's a felony to accept wine by mail.

You typically get no discount by ordering from the winery. You often pay more with shipping costs. Instead, you get access to limited-distribution wines and help support vintners, who may be paying distributors up to 50% of the retail price of a bottle, says Tom Bracamontes, director of sales and marketing at Napa's Mi Sue?o Winery, which produces just 4,000 cases a year. Mi Sue?o balances the higher profit margins it gets on direct shipments against the headache of having to get permits for each state or jurisdiction and keep track of tax requirements and shipping limits. As a result, it ships to only a few states.

For the latest on current law, go to wi.shipcompliant.com. Or ask the winery its policy on shipping to your state.

By Cliff Edwards


China's Killer Profits
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus