Complicated state wine laws leave consumers frustrated

HELENA, Mont. – To have his favorite wine shipped straight from a California winery, Gerard Lemieux wanted to make sure he did everything legally. The law, he knew, could be as twisted as an old grapevine.

Montana regulators said he had to buy a special state permit – a connoisseur’s license – to have wine shipped directly to his Montana 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 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 is going to drive to California’s Napa Valley, fill the trunk of his car and haul it back himself.

“There’s nothing saying we can’t do that,” said Lemieux, a retired United Parcel Service worker from Missoula. “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 straight from stores or manufacturers to customers. The wholesale industry argues the laws are necessary to ensure the states can collect alcohol taxes and prevent the shipment of booze to minors. In recent years, however, the wine industry has persuaded some states to make exceptions for wine, arguing that minors are not likely to order 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 have “reciprocal” agreements that allow residents in one state to order wine straight from a winery or a wine store in another state, so long as that state allows the same.

Fourteen other states and Washington, D.C., allow direct wine shipments, but under tight restrictions. Since 1997 it has been a misdemeanor in Maine to purchase liquor from outside the state. Before 1997, it was legal to buy up to 2.4 gallons per month of either beer or wine from out of state.

Like Montana’s law, many of the rules are so cumbersome, confusing or ambiguous that critics say wineries and even shipping companies like UPS will not ship to those states. Alaska, for instance, allows the direct shipment of a “reasonable” amount of wine, but never defines reasonable.

Selling wine straight from a winery cuts out the middleman: the wholesalers. And wholesalers have resisted any move to allow direct shipments of wine to customers.

“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 any time 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,” said 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. Its 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 customers, 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 wholesale 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.

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.

“It’s a very elitist, minority issue,” said Wolf, of the wholesalers group.

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