Those Crazy Wine Regulations: Massachusetts
Written by Rick on December 4, 2013
40 States allow the direct shipment of wine to consumers, why is the otherwise progressive and innovative bay state one of the last holdouts?
It’s time for the Bay State to get with it!
Welcome to Massachusetts
As the owner of a California winery living in Massachusetts I’m incredulous that I can’t receive the finished product (or even tank samples) of my own wine directly from our winery facility in California.
I know that this sounds like a selfish argument – but this issue affects every wine loving consumer in Massachusetts. It’s long past time for the Massachusetts State Legislature to get with it, pass HB 294 and finally change the antiquated, inefficient and unfriendly laws that prohibit the direct shipment of wine to Massachusetts consumers.
This bill (HB 294) like others before it in Massachusetts just can’t seem to make it past the legislative body, or worse, make it out of committee for a floor vote. This year a hearing was held by the Joint Committee on Consumer Protection and Professional Licensure on November 12, 2013. This committee has the responsibility to review all of the testimony (both written and verbal) and either decide to amend the bill or push it through for a floor vote. The big question is…WILL this get to the floor for a vote, and if so, WHEN will this happen? Similar bills to this in previous years have met a slow death due to a legislative committee disease called “languishing”.
Massachusetts is the second largest of nine states that currently prohibit winery-to-consumer wine shipments. The other states include: Utah, Oklahoma, Mississippi, Alabama, South Dakota, Kentucky, Pennsylvania and Delaware.
To provide some background on this topic. A Massachusetts law barring winery-to-consumer shipments from wineries producing more than 30,000 gallons per year and who retain Massachusetts wholesalers was ruled unconstitutional by District Court Judge Rya Zobel, and then affirmed by the U.S. 1st Circuit Court of Appeals in January 2010. The legislature was expected to conform to the ruling by passing a bill similar to the model bill. In 2011, House Bill 1029 was introduced to conform to Judge Zobel’s ruling, but it “languished” (remember the legislative disease I referenced earlier?) in committee throughout 2012. House Bill 294 was introduced January 18, 2013.
I attended the hearing on HB 294 and actually testified (you can see the WBZ story here). This isn’t the most emotional topic facing the State this year so it’s hard to get thousands of consumers to drive to Boston, pay for parking and then spend the day waiting to testify (you had to wait for about 20 other bills to be heard before this one came up). However, there was a fair turnout for the proponents of the bill including a number of consumers! There was one person opposing and he was the lobbyist for a special interest group – The Massachusetts Package Store Association. (I wonder why they are against?) Surprisingly, they must not be too concerned about the impact of the direct shipment of wine – when I visited their web site for updates on recent news or legislation affecting their constituents this topic isn’t even there http://www.masspack.org/
The standard “red herring” arguments were offered by Masspak’s Executive Director Frank Anzalotti during his testimony “against” HB 294 — underage access, package store job loss and out of state wineries as potential tax scofflaws. These red herrings have been raised in many states and have been proven to be nothing more than misleading, unfounded and groundless. These standard red herring arguments were recently put to rest by a state mandated study to review newly enacted direct shipping legislation in Maryland by the Maryland state comptroller Peter Franchot. The study turned out to be overwhelmingly positive for consumers and the government (even to the surprise of the anti-direct wine shipping special interest lobbyists).
According to Franchot’s report, Maryland issued 629 direct wine-shipping permits, with 49,350 gallons of wine shipped directly to consumers during fiscal year 2012, compared with nearly 14.66 million gallons sold through Maryland wholesalers during that same period. Direct sales accounted for just 0.3 percent of the volume of wine sold in Maryland last year. Maryland collected $125,800 for the $200 permits, and $567,524 in tax revenue on those 49,000 gallons of wine sold through direct shipping.
Franchot also wrote that direct shipping created “a measurable positive impact for product availability and consumer choice.” As for direct-shipping opponents’ assertion that minors would gain easy access to alcohol by purchasing it online, “there have been no incidents of access to underage persons reported to the Office of the Comptroller,” Franchot wrote. “Additionally, there have been no significant complaints specific to the law or its implementation from the industry, permit holders or consumers in the 17 months since the law took effect.”
The Franchot report showed that direct shipping sales accounted for less than 1% of statewide wine sales; hardly enough to have any impact on package store jobs. In my opinion, IF direct shipping wine sales had a significant impact on statewide wine sales and DID have an impact on package store jobs – we would need to ask the question why is this industry protected and others are not? If job protection is the standard, then the state should bar every form of internet sales including books, records, hardware, and we should return to city ticket offices to purchase our airline tickets. A recent Boston Globe editorial on the subject called on Beacon Hill to “get moving” and to stop putting the interests of liquor stores ahead of consumers. The Globe editorial went on to say that it’s not the Legislatures job to shield package stores from all possible competition; it’s to set up fair rules for direct shipping – then get out of the way. The Boston Herald calls for the removal of “the insane restrictions on direct shipment of wine to consumers in Massachusetts” and we couldn’t agree with the states largest newspapers more. It’s time to get HB 294 out of committee and heard in the legislature.
The package store owners association would have you believe that thousands of underage Bay State teens are going to immediately go on line, wait two weeks for the delivery of fine wine, pay the burdensome shipping charges (wine is heavy – it costs about $30 to ship a case) and bypass the “adult only” signature required by the legislation and costs direct shippers of wine $5.00 per box. What the package store owners don’t tell you is that they are delivering state wide today – if underage access is the issue – shouldn’t they be worried about the same consequences?
Direct shipping should pass in Massachusetts this year or in the first quarter of 2014. If it doesn’t – there’s something really mysterious going on in the bowels of the Massachusetts state house and it’s called “stonewalling” Let’s “get with it” Massachusetts and free the grapes in 2013.
If you are interested in freeing the grapes in Massachusetts visit this page to contact your state legislator Free the Grapes Organization
Another valuable consumer site for wine shipping interests is the American Wine Consumer Coalition
July, 2014 **UPDATE** – Wine Direct Shipping was passed by the Massachusetts Legislature and signed into law by Governor Deval Patrick in July, 2014. The new shipping provisions will be available for wineries to apply for shortly and shipments will begin in January, 2015. I remain skeptical until i am able to see the application. Business friendly NH has a one page application, we’ll see how the Massachusetts Alcohol Beverage Commission makes their application business friendly. Stay tuned. For more details visit http://freethegrapes.org/massachusetts-2014/