« Ind. Decisions - Court of Appeals issues three today | Main | Ind. Decisions - University of Southern Indiana wins $500,000 suit »

Thursday, March 16, 2006

Law- Outstanding wine article in NY Times

The NY Times yesterday had an outstanding article titled "At Long Last, Wine in the Mail." It covers the implementation of New York's new law, and looks at changes throughout the country, although Indiana isn't mentioned. Some quotes:

Almost a year after last May's Supreme Court ruling, consumers in New York now have the opportunity to do by mail what comes naturally to wine lovers everywhere else: spending more money than they might like to accumulate more bottles than they have room to store.

Around the country, new laws have been passed permitting similar direct shipments of wine. Before the court ruling, interstate wine shipping was considered a felony in Florida; now it is legal. Texas has made it legal, too, as have Michigan and Ohio. In all, the number of states permitting direct shipments is now 33, as against 27 a year ago.

"That's a pretty dramatic change in the percentage of the market open to direct shipping," said Jeremy Benson, executive director of Free the Grapes, an advocacy group for wineries and consumers. "It's up to 78 percent of the market, from 50 percent."

Not every state has joined in. New Jersey does not permit direct shipments from out-of-state wineries. Connecticut does, but charges $1,000 for a license, which some small producers have decided is too steep (New York charges $125). And consumers have experienced frustration at the slow pace of change.

Unlike Indiana's new law, New York's doesn't require that you first visit a winery in person (whether in state or out-of-stae) before you can order from it, and that out-of-staters wishing to purchase from small winery in Indiana do the same. Instead, New York law requires UPS or Fed Ex to obtain a delivery signature from an adult.
Most states require an adult to sign for delivery, which is another cost for the winery. FedEx and U.P.S. charge wineries an additional $3 for each delivery that needs a signature. "It eats up a little bit here, a little bit there, and at the end of the day you say, what am I doing this for?" said Charles Massoud, who owns Paumanok Vineyards in Aquebogue, N.Y., with his wife, Ursula. "They call it collateral damage, that's what this is all about."
More from the story:
While consumers may be pleased with their new access, the benefits are a little less clear for wineries. Sure, they can expand their market, and, in dealing directly with consumers they are cutting out the middle men, the distributors and retail shops that occupy the two other rungs of the three-tier system that has long stood between consumers and their desired bottles. But smaller producers in particular say they are being overwhelmed by paperwork and that new licensing fees may cut off previously open markets.

"Every state has different laws," said Dave Harr, the shipping manager at Navarro. "One wants us to collect excise tax, or sales tax, or no tax, leaving it to consumers. Florida wants the tax form shipped to the consumer. New Hampshire has a specific form we have to fill out. Every state has different quantity laws, reporting procedures and fees."

Navigating through the New York system, for example, requires three different reports, Mr. Gross said: semi-annual, quarterly and monthly, showing tax payments, volume shipped, where it was shipped, and so on. For some winery owners, simply thinking about it causes a headache.

Rocking Horse Winery in Napa, Calif., makes some fine zinfandels, but when I inquired about ordering directly, Jeff Doran, the owner with his wife, Nancy, said he hoped to get around to it, but not until it was less difficult.

"It's created a quagmire for the small producer," he said. "So at the moment, we're focused on the three-tier market because that's the path of least resistance."

Posted by Marcia Oddi on March 16, 2006 07:36 AM
Posted to General Law Related