Mon 21 Jan 2008
Once more a wine direct shipping bill has been introduced into the Tennessee state legislature. Will it be doomed to failure as the others have been, brought low by an unsavory alliance of the state’s wholesalers and retailers with conservative Christians?
Senate Bill 2686 was introduced by Doug Jackson, a Democrat from Dickson County, in Middle Tennessee, not far from Nashville.
It would seem that the timing is propitious to give residents of Tennessee the right to purchase wine from retailers or wineries in other states and have it shipped to them, just as they can with clothing or food or books or furniture or just about any other consumer item. In its decision in 2005 in Granholm v. Heald, the U.S. Supreme Court stated the case pretty plainly: “States may not enact laws that burden out-of-state producers and shippers simply to give a competitive advantage to in-state businesses.” In other words, if retail stores and wineries can sell wine to consumers in-state, so can sellers from out-of-state. The prevalence of Internet wine sales and auction sites makes this tendency inevitable, and retailers and wholesale distributors in Tennessee need to face the reality of the wine world of the future and make adjustments.
Some state legislatures have done an end-run around the Supreme Court. Illinois, for example, enacted a law that forbids ANY winery, in-state or out-of-state, from shipping directly to consumers, dealing a serious blow to the state’s small wine industry. Surely that act will be challenged soon.
Summarizing the bureaucratic language of Senate Bill 2686, the propositions, besides details of enforcement and paperwork, are these:
1. Any “wine manufacturer, producer, supplier, importer, wholesaler, distributor or retailer” in-state or out-of-state may register in Tennessee and obtain a license — the initial cost is $500 with annual renewal for $250 — to ship up to two cases of wine annually “directly to a resident of Tennessee who is at least twenty-one (21) years of age” for personal use. Shipments must be clearly marked as containing alcoholic beverages.
2. The wine may not be shipped to “a county or municipality that has not authorized the sale of alcoholic beverages by local option election.” That’s right, readers, Tennessee still has dry or partially dry counties and towns. Until 1972, you couldn’t buy a cocktail in a restaurant in Memphis, and as many people know, Jack Daniels in distilled in a dry county.
3. Sales and excise taxes must be paid on the wines, whether shipped from in-state or out-of-state entities.
Tom Wark, executive director of the Specialty Wine Retailers Association, a nonprofit organization dedicated to the passage of direct shipment legislation — and proprietor of the Fermentation blog — called S.B. 2686 “a good bill.”
“The proposed Tennessee direct shipping bill means that consumers in the state have complete access to the wines they want,” Wark wrote to me in a recent email message. “This also means that the bill conforms to the requirements that states must treat in-state and out-of-state shippers equally, as noted in the Granholm v. Heald Supreme Court decision and the recent Siesta Village Market v. Perry decision in Texas that proclaimed that retailers as well as wineries are protected by the principles announced in Granholm. The bill provides for the state to collect taxes on retailer and winery shipments, which is important for the state. And, finally, it provides for safeguards with regard to minor access to wine, a very prudent addition to the bill.”
While Wark — and everybody who would potentially benefit from passage of the bill — would like to see a higher limit on the amount of wine that can be shipped to an individual, “this is something we can live with,” he said.
Now let’s hope that the politicians, the retailers and wholesalers and their fundamentalist allies don’t try to inject fear and loathing into a campaign against the bill, conjuring the horrific — and completely false — specter of crazed teenagers using their parents’ credit cards to order cases of Screaming Eagle over the Internet. That scare tactic is complete baloney.