Battle brewing over wine shipping restrictions

By Erik SchelzigTNJ

Free the Grapes

The first round in what could be this year’s big booze fight is scheduled for the House Departments and Agencies Subcommittee on Tuesday. The bill sponsored by House Majority Leader William Lamberth (R-Portland) seeks to place greater restrictions on direct shipment of wine to Tennessee consumers. The move is backed by the state’s liquor wholesalers and retailers, while it is opposed by a national wine industry group calling itself “Free the Grapes!”

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The bill would only allow wineries to ship wine themselves, rather than using so-called fulfillment houses to handle the logistics for them. Supporters say the change would return the law to its original intent, which was to allow oenophiles to obtain hard-to-find wines directly from the source. Allowing winemakers to use clearinghouses to send their product far and wide circumvents the state’s strictly regulated system for distributing (and taxing) alcohol, they argue.

Opponents say consumers like the flexibility of having wine delivered straight to their homes — especially during the pandemic. Read the full release from the Free the Grapes group below.

February 25, 2021, Napa, CA – Free the Grapes!, a national coalition of wineries and wine lovers, is calling on consumers in the Volunteer State to write their state legislators in opposition to bills that would, if passed, effectively cut off Tennessee adult wine lovers’ ability to purchase and receive wines directly from their favorite wineries. https://freethegrapes.org

House Bill 742 and its companion Senate Bill 705 would ban winery shipments to Tennessee residents that move through a fulfillment house. Fulfillment houses play an important role helping small and medium size wineries warehouse, package and arrange for shipping through common carriers, like UPS and Tennessee’s own FedEx. If these bills pass, they will shut off an estimated 60% of winery direct-to-consumer (DTC) shipments to the state. No other state has an affirmative ban on shipments through fulfillment houses.

“These bills are anti-consumer, anti-free trade, and will reduce state tax collections,” said Jeremy Benson, executive director of Free the Grapes! “Direct to consumer (DTC) shipping laws passed over a decade ago give Tennessee consumers options to order a limited amount of wine directly from U.S. wineries licensed by the state. This bill would take the Volunteer State backward.”

The bills are also opposed by Tennessee wineries. Tennessee Farm Winegrowers Alliance executive director Adam Acampora says, “We believe limiting consumer choice is in direct opposition to the free and open market that the Tennessee legislature rightly touts. The bills’ broad language would also detrimentally effect how some of our wineries and farm wineries operate within the state.”

Tennessee consumers can visit FreetheGrapes.org to learn more about the bill and compose a message to state legislators sent automatically through the website.

Winery Direct to consumer wine sales fill in the gaps where the traditional three tier channel – shipments from winery to wholesaler to retailer – does not adequately meet consumer demand. The number of U.S. wineries has increased by over 500% to more than 10,000 in the past 30 years – there is at least one winery in every state. But U.S. wineries produce thousands of new wines each vintage, and nearly all wineries are small, family- owned and operated producers relying to some degree on DTC shipping to the 46 states that allow it.

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