State bill would expand shipping for wineries
Wine aficionados in the Ocean State may soon be able to order their Napa Valley favorites with just a click of a mouse.
Rep. Brian Patrick Kennedy, D-Hopkinton, has introduced legislation that would allow any winery in Rhode Island or any other state that has a “wine shipper license” to ship up to 24 cases annually to adults 21 or older who live here.
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Presently, out-of-state wineries can’t ship their goods into Rhode Island unless the order was placed in-person. Rhode Island wineries can take Internet or telephone orders only from states that allow wine to be shipped in.
“Right now, the state of Rhode Island is sitting on the fence…” Kennedy said.
Kennedy’s legislation comes on the heels of a May United States Supreme Court decision that said states cannot have one law for out-of-state wineries and another for in-state operations.
“What it’s going to do is tell 50 different stories because every state will have control over what they want to do,” said John Nunes, owner of Newport Vineyards. “Hopefully, in most cases, states will realize the importance of having the ability to ship out of state.”
Carol Martel, New England counsel for the Wine Institute, said Rhode Island lawmakers have two choices when deciding how they’ll comply with the Supreme Court decision.
“They can stop all in-state wineries from shipping within Rhode Island and to other states or they can open up direct shipping to allow other states to ship in,” Martel said. “We’re suggesting they do that by using Rep. Kennedy’s legislation.”
The bill is aimed at making brands that aren’t available in Rhode Island more accessible, Kennedy said.
“These are the specialty-type items,” Kennedy said. “The small-batch items that aren’t typically carried by wholesalers and aren’t available here – the boutique-type wines that collectors are likely to purchase.”
The passage of Kennedy’s bill would create a more even playing field for wineries around the country, Martel added.
“The more states that open up to wine shipping, the better,” Martel said. “It benefits small wineries and the consumer.”
Nancy Parker Wilson, general manager for Greenvale Vineyards in Portsmouth, called the legislation “very much a step in the right direction.”
For a place like Greenvale, it would allow people who tour the winery and enjoy the tasting to later call and order a bottle of wine for Thanksgiving, Wilson said – provided their home state allows it.
“We really have to stay on top of things now,” Wilson said. “It’s a little bit wait-and-see right now.”
Under Kennedy’s bill, a Rhode Island winery would pay $100 for a wine shipper license that would allow them to send up to 24 cases of wine a year to an individual. Out-of-state wineries would also have to obtain a license from Rhode Island, and then report the total amount of wine shipped into Rhode Island each year. Out-of-state wineries would also have to pay all sales and excise taxes to Rhode Island as though the wine had been sold here. All shipments would require the signature of an adult 21 years or older and be conspicuously labeled that the package contains alcohol.
Martel said New Hampshire adopted a similar law and sold 400 shipper licenses last year and collected $200,000 in fees. Each of those wineries were audited, she added, and found to be in compliance with the law.
Martel said another piece of legislation was introduced in February that would effectively prevent Rhode Island wineries to ship directly to consumers.
“The wholesalers’ bill is trying to stop Rhode Island wineries from having a privilege they currently enjoy,” Martel said.
That bill, which has been referred to the House Finance Committee, amends current law to prohibit wineries from selling at retail for delivery off-site of the winery in Rhode Island directly to Rhode Island residents. The legislation allows for wholesale to people out of state where wine importation is allowed.
“There’s a movement afoot to prevent Rhode Island wineries to be able to ship within the state so out-of-state wineries can’t ship in,” Wilson said. “But we’re such a small industry … hopefully it doesn’t get very far.”
At Newport Vineyards, Nunes said many of the customers are from outside the state, thanks in part to Newport’s tourist industry.
“It’s primarily tourists who come here,” Nunes said. “They taste the product and they want to be able to get it when they return to where they live. If their state law doesn’t permit out-of-state shipment, they can’t get it. It’s frustrating for them and for us.”
Both Wilson and Nunes said wine shipment orders account for just 1 or 2 percent of their sales.
“But there’s an untapped market,” Nunes said. “But it’s an untapped market because of all the restrictions involved.”
Martel said one hurdle the issue has to clear is letting wine shops and wholesalers know that allowing out-of-state wine to be shipped directly to customers won’t have a big effect on their business.
“Most people will still stop at the store on the way home and pick up a bottle,” Martel said.
Kennedy agreed.
“Make no mistake – if you’re looking for Sutter Home Vineyards wine – you can find it in Rhode Island at the corner liquor store,” Kennedy said.
And while allowing Rhode Island wineries to ship to more states would mean more paperwork and paying taxes to each state, Wilson said she thinks it’s worth the extra effort.
“It frees up commerce,” she said. “That’s the part of the Supreme Court decision that’s helpful for us. … We all believe in a free market. We’re just trying to learn a way to make it work.”
