New York Gov. proposes bill to allow direct wine shipments

Modern Brewery Age, May 30, 2005

AP--Wine drinkers in New York could see lower costs for a bottle of California cabernet sauvignon while New York vintners could see higher profits with new markets opening under a proposal made Tuesday by Gov. George Pataki.

Earlier this month the Supreme Court struck down laws in New York and Michigan that banned wine shipments from out-of-state producers, ruling such laws were unconstitutional.

The fight over who can and can't order wine by mail or over the Internet has now switched to state legislatures around the country. New York, Michigan, and twentytwo other states barred consumers from directly ordering wine from out of state. Pataki on Tuesday introduced a bill to allow the direct shipment of wine in and out of state.That would give New York consumers more options and create new business for New York wines, he said.

New York's wine and grape industry, which generates more than $500 million in yearly sales, has long lobbied lawmakers to end the state's out-of-state shipping ban. Lawmakers have in the past two years failed to act on Pataki's proposals to end the ban on interstate shipping. Similar bills have been introduced again this year in both the Senate and Assembly.

"Clearly there is momentum there now and they are compelled to act," said Peter Gregg, a spokesman for the New York Farm Bureau. "We hope they act quickly so our wine members can take advantage of this opportunity."

Dave Whiting, the owner of Red Newt Cellars in Hector, says a "very high percentage" of people visiting his winery come from outside New York. Those visitors may buy a few bottles or a case while at the winery, located in the scenic Finger Lakes region of upstate New York, but find after they get home that they can't order more to be delivered.

"I can't tell you how much this will affect our business, but it will have very significant impact on our ability to follow up with customers who are now inaccessible to us," said Whiting, whose winery produces about 10,000 cases a year.

Pataki's proposal would require shippers such as Federal Express and UPS to obtain a valid photo identification and signature before delivering wine to a customer and require licensed wineries to register with the state Tax Department. The bill also mandates that out-of-state wineries that apply for a license to ship into New York have to be located in states that give New York vintners similar shipping privileges.

"The recent U.S. Supreme Court ruling provides us with an excellent opportunity to promote New York's wine industry," Pataki said in a statement. "What this legislation will do is ensure that the necessary safeguards and guidelines are in place to ensure that the interstate shipment of wine is done responsibly."

Assembly Speaker Sheldon Silver said last week his house would move to change the law.

"We've obviously got to deal with the U.S. Supreme Court decision as it deals with the way we treat out of state wineries," Silver said. "There's no question we have to do something. It's time for us to consider a logical treatment that incorporates instate and out-of-state wineries in the same fashion."

With around 200 wineries, New York is the third largest producer in the United States behind California and Washington and the second largest consumer, behind California.

The U.S. wine industry racked up an estimated $21.6 billion in sales last year as tourists flocked to wineries for tastings and tours.