Recent Direct Shipping News

A few recent developments on the direct shipping front of which you should be aware:

Texas:  The U.S. 5th Circuit Court of Appeals has refused a rehearing en banc of last January’s Siesta Village Market decision by a panel of 5th Circuit judges.  The panel had ruled to uphold the Texas law prohibiting out-of-state retailers from shipping consumer direct to Texas residents.  This means such retailer shipments will remain illegal unless one of two things occurs:

• The case is appealed to the U.S. Supreme Court.  This is certainly a possibility but dependent on the financial wherewithal of the plaintiffs and with no guarantee of success; OR
• The Texas Legislature acts to change the law, which seems unlikely.

Massachusetts:  A bill to allow both instate and out-of-state wineries to ship direct to consumer to Massachusetts residents stalled in committee in the Massachusetts House and has until this week to pass before the current session ends.  HB 4497 is based on the Model Direct Shipping Bill and features the usual permit, age verification and volume limits requirements.  It does not appear to include retailer direct shipments.

Virginia:  The state ABC has resolved an issue that has prevented wineries & retailers from using 3rd party fulfillment services when shipping direct to Virginia residents.  The ABC created a direct to consumer permit specifically for such services.  The cost of the permit is $120.  This can be considered both good and bad news at the same time.

• It’s good that they resolved the issue in a manner that helps everyone:  consumers, wineries and fulfillment services because there was much confusion after the ABC issued a ruling last year preventing such shipments, so this clarifies the situation in a high wine consumption state.
• It’s bad because it sets an unfortunate precedent for other states to copy.  In most states, fulfillment services can ship direct to consumers as a service for their licensed winery customers without any permit requirements.  Now, other cash starved states could possibly look at this permit model and emulate it, adding an additional expense to consumer direct shipments.

Until next time.