Hallelujah —The Texas Wine Miracle — Legal Edition
Sometimes, out of nowhere, a lawmaker in a state does something audacious and profoundly beneficial to the consumers. That’s happened in Texas.
A Texas lawmaker named Matt Rinaldi has authored a bill (HB 2291) that completely reforms the laws for the direct shipment of wine to consumers in that state. Currently, Texas retailers, Texas Wineries, and out-of-state wineries may ship wine to Texans. However, Texans are forbidden by law from having wine shipped to them from out-of-state retailers and wine stores.
Rinaldi’s bill would allow Texans to buy from out-of-state retailers. It would also take away the limit of how much wine a winery may ship to Texans. Equally important, the bill would allow out-of-state breweries and distilleries to ship to Texans. And it would out-of-state retailers to sell and ship beer and spirits as well as wine to Texans.
Let me make this simpler. Representative Rinaldi’s bill is perfect. In fact, it is elegantly written—not something you usually see in bill writing.
This is exactly the kind of legislation that puts the kind of power in consumers hands that they ought to have. This is the kind of legislation that respects the notion of well-regulated free markets in legal products.
It’s also the kind of legislation that Texas wholesalers and most Texas alcohol beverage retailers will oppose with their last dying breath.
This last matter is not small. Texas wholesalers, particularly their beer wholesalers, have outsized influence in the state. If this bill gets a hearing, they will throw everything they have at it. But what they won’t do is deliver any arguments against the bill that make any sense for the simple reason there exist none. In fact, the only honest case the wholesalers and retailers in Texas will make against the bill is that it ought to be stopped because it will remove their protection from having to compete on a level playing field in a modern economy, which is something they’ve never had to do.
I noted earlier that this bill came out of nowhere. Most commonly, bills relating to direct shipment of wine are the product of a lawmaker working with a trade group and consumers to address unfairness in the market. However, in this case, Representative Rinaldi saw inefficiency and a disavowal of the principles of free trade in his state’s direct shipping laws. It offended his principles. So, he authored a bill. This is a very unusual step.
The Texas legislature meets every two years and then only for about 140 days. That means we’ll know how this brilliant piece of legislation fares in relatively quick fashion. And any number of things could happen:
It could fail to get a hearing due to committee chairmen being opposed to it and it dies.
It could be amended at the demand of wholesalers so that the retailer shipping provision is stripped out
It could get a hearing as is and not be voted out of committee
It could be voted out of committee then die in the other house of the legislature
It could be approved in both houses and die on the Senate floor or House floor
It could be approved by the Senate and House and be vetoed by the governor
It could become law.
Some of these outcomes are much less likely than others.
Currently, the battle for direct shipment of wine is moving from a winery-directed battle to a retailer directed battle. Most states allow wineries to ship wine in one fashion or another and most legislation of any consequence deals with augmenting the conditions under which wineries may ship. Perhaps changing the amount of wine that could be shipped from a winery, changing the cost of winery shipping permit, etc. But where retailer shipping is concerned the battle is simply to allow it.
Currently, wine retailers and stores are explicitly allowed to ship to only 14 states and the District of Columbia. Retailer shipping has found its way into a number of direct shipping bills over the years, but most often wholesalers object to retailers being included in bills that allow out-of-state wineries to ship, the wineries and their representatives and Free the Grapes agree to not oppose the removal of retailers from the shipping bill and consumers end up getting the right to buy from out-of-state wineries, but not out-of-state retailers.
The consequences of the restriction on retailer shipping in most states are fairly profound. Consider that in the U.S. only wine retailers and stores may legally sell imported wines (French, Italian, German, Spanish, Chilean, etc). Also, in wine auction houses along with most wine clubs are licensed as retailers. So, when retailers are restricted from shipping into a state, it means the wine lovers of that state may not have any imported wines shipped to them. It means that the rare, hard-to-find, collectible and out-of-vintage domestic wines often found at auction houses and retailers are not available to residents of the state.
Currently, New York (we will be writing about this), Kentucky and Rhode Island have bills in their legislatures that similar to the HB 2291 allow out-of-state retailers to ship wine to consumers. In every case passage of these bills is an uphill battle.
I do know this, however. None of these bills will pass without the urging and support of consumers. This fact is as sure as gravity.
Nevertheless, the Texas law, in particular, is important since Texas and its alcohol beverage laws are more thoroughly controlled by wholesalers than nearly any other state. The fact that a bill like HB2291 could be introduced is a minor miracle. But perhaps it signals a changing of the times. And I know this: Any Texans reading this should immediately pick up their phone and call the offices of their state representative in the Texas House and Senate and ask them to co-sponsor the bill. Without that input, the bill will likely die.