Vermont on the Forefront of Wine Sales Reform
In the course of reconciling it’s wine shipping laws with last year’s equality-imposing Supreme Court decision, the state of Vermont has done something very interesting.
A new law (S58) signed this month says both in-state and out-of-state wineries may now sell and ship wine directly to retail shops and restaurants, effectively cutting the middle man wholesaler out of the loop. This, in and of itself, is a pretty dramatic step given the stranglehold wholesalers seem to have over the legislative process across the country. However, the new law does have some caveats.
1. A winery is limited to shipping no more than 841 cases per year to Vermont restaurants and retailers.
2. No more than 16 cases per month may be shipped to a single restaurant or retailer.
In an interview with the sponsor of the bill, State Senator Matt Dunne, Fermentation learned that the initial idea was to limit direct shipment of wines to retailers only to small wineries. According to Senator Dunne, the wholesalers feared bigger wineries would keep their good stuff to sell to retailers and restaurants themselves, while leaving lesser expensive bottlings for their wholesalers to deal with.
According to Dunne, had it not been for the state’s Attorney General offering the opinion that limiting the size of the winery that could sell direct to retailers would be unconstitutional, this is exactly the type of new law that would have been passed.
The new Vermont law limiting the amount of wine a California, Oregon, Vermont winery can sell directly to a retailer still amounts to a wholesaler protection act by subsidizing the three tier system in a way that forces the vast majority of wine sold in VT to go through the wholesalers’ hands.
As I hope I’ve mentioned before, I believe wine wholesalers offer an essential service that really can’t be replaced if wineries want to get product to market. I just don’t believe they should be a state-mandated service. They claim that they are uniquely suited to collect taxes for the state and assure that minors don’t get their hands on wine. However, technology has advanced to the point where a winery can send it’s tax burden to states across the country with the click of a mouse. And as for minors, 99% of the alcohol that gets into their hands first passes through the wholesalers’ hands.
That said, the new VT law is a step in the right direction by not limiting the size of the winery that can sell direct to retailers and restaurants.