Those Crazy Wine Regulations: Montana
Written by Rick on March 7, 2013
This blog is part of a continuing series examining the puzzling state regulations governing direct wine shipments. The 21st Amendment did away with Prohibition, but not with the many restrictions on the distribution and sale of alcohol. That simply moved to the states which constructed an often bewildering variety of laws banning or restricting wine shipments to consumers.
If you’ve ever visited a boutique winery in California, you may have learned that you can’t ship that Syrah you tasted there to your home in Pennsylvania. Others may have discovered that you can’t order that bottle of Chardonnay over the internet and send it to Aunt Suzie in South Dakota either. That’s because some states are “prohibited” and others are “limited”.
As the current US map stands, prohibited states do not allow direct shipping at all or if they do, the restrictions around them make shipments extremely difficult. Limited states allow direct shipping with many incomprehensible restrictions. All of these regulations directly affect your ability to enjoy wines from the Traveling Vineyard winery.
These state regulations primarily serve to protect well-connected in-state businesses that have grown accustomed to protected status granted by lawmakers. This system of alcohol regulation no longer serves a 21st century consumer nor the modern alcohol industry and should be reformed.
The Best of Times. The Worst of Times.
First, the good news: The Traveling Vineyard’s home based business opportunity is now open for business in Colorado and Kansas! The bad news is there are still many states that prohibit direct shipment of wine or make it unnecessarily difficult for consumers to receive wine deliveries. These “crazy” wine regulations impinge on the rights of consumers to enjoy a simple glass of Merlot in the comfort of their homes. The regulations and their wacky provisions only help the well connected protected status granted by lawmakers to the state wholesaler (who should only serve as an efficient distribution system, not as private sector alcohol adjudicators). Consumers, not wholesaler middlemen, should determine which wines they can enjoy and how they purchase them.
We open this series with the regulations in Montana which is considered a “prohibited” state. Fedex has not approved Montana for shipment because state law requires a consumer to have a “connoisseur’s license” to ship wine. Obtaining a “connoisseur’s license” is so cumbersome virtually no one goes through the process. (Less than 200 wine lovers in the entire state hold a connoisseur’s license.) To obtain a license, a consumer must pay $50 for the license which is renewable for $25 each year. The consumer must also pay taxes twice/year to the state and is limited to receiving just 12 cases per year. Wineries must request this license with every order delivered.
This regulation unduly burdens the consumer. It doesn’t work because it requires the consumer, not the winery, to obtain a state issued license. The current law doesn’t even allow Montana’s wineries to ship to Montanans.
State alcohol regulatory agencies are charged with protecting the state constituents’ health, revenue and safety. This regulation does nothing close. As you get to see the lay of the land – the only protection these regulations serve is to protect the middlemen.
The regulation penalizes successful direct ship wineries. It gets even worse….the real punch line (not so funny), is that if you are a successful winery, one that ships over 60 cases, you must ship via the licensed distribution system – through a wholesaler (provided that a small to medium sized winery can get them to represent the product - which is highly unlikely).
Wholesalers are able to pass protectionist laws that serve only them and not the constituents of the state. Since the repeal of Prohibition, state governments created the 3-tier system mandating that wholesaler “middleman” to sell to a retailer who then sells to the consumer (making “3-tiers”). This was intended to remove the “unscrupulous” from the business of alcohol. However, in favor of keeping the 3-tier system, state regulations have evolved hodgepodge to limit direct to consumer wine shipping. It’s a disservice to consumers to let regulations like this continue. Consumers don’t have access to many wines or in the quantities they desire. They’re only able to drink what wholesalers allow them to drink.
We support guidelines that allow for free trade. The Traveling Vineyard, on the other hand, creates local jobs and stimulates the local economy by engaging Independent Consultants to educate and inform consumers in their home states with our free home wine tastings. We support the guidelines put forth in 1999 by the model direct shipping law recommended for adoption by the National Conference of State Legislatures, Task Force on the Wine Industry on November 5, 1997. We’re calling for simplifying the laws governing direct shipments. These principles protect the health, revenue and safety of the constituents. The ONLY entity being protected with the current system is the wholesaler.
Stay tuned. House Bill 402 was recently introduced to the Montana state legislature. As of this writing, the bill seeks to allow the shipment of up to 18 cases annually to anyone over 21 with the bulk of the licensing and paperwork falling logically on the winery, not the consumer – a step in the right direction.
What’s a Wine Lover To Do?
You might have noticed the little grape guy on our website. (He’s the other little grape guy, not our adorable Traveling Vineyard man.) He’s the mascot for Free the Grapes!, a grassroots coalition of wineries, consumers and retailers founded in 1998. Its mission is to fight to augment, not replace, 3-tier system with legal, regulated DTC shipments from wineries and retailers.
How can you make a difference? A consumer voice is needed to change this in the state legislature. Visit www.freethegrapes.com to sign up for their informative Enewsletter that will keep you up to date on shipping laws in the states where you live and ship wine. You can also stay connected to the action on Facebook.