Tennessee Direct Wine Shipping Bill Passes the Senate
Customers in Tennessee may soon be able to order direct shipments of wine from out-of-state wineries, according to a recent article in the Memphis Commercial Appeal. The Tennessee Senate voted 22-8 Monday, April 13, 2009 to approve legislati0n setting up a system in which out-of-state wineries can register with the state of Tennessee if they wish to ship directly to Tennessee consumers. The companion bill, HB 1155 is scheduled for consideration by the Government Operations committee on Wednesday, April 29, 2009.
The move marks the latest in a move by wineries to obtain self-distribution privileges, removing the wholesale and retail tier and allowing wineries to sell directly to customers. An overview of state wine shipping laws can be found on-line at The Wine Institute web site.
Under SB 0166 and HB 1155, a winery can obtain a direct shipper license, issued via the state alcoholic beverage commission, allowing an in-state or out-of-state entity to ship wine directly to consumers age 21 years of age or older in Tennessee for personal use.
The aforementioned bill includes the following restrictions:
- The manufacturer, producer or supplier, importer, wholesaler, distributor or retailer must obtain a wine direct shipper license from the alcoholic beverage commission. To obtain a license, the applicant must pay a $300 application fee and provide proof of its current alcoholic beverage license.
- The person may ship no more than 12 nine-liter cases annually to the resident
- The resident must be obtaining the wine for personal use and not for resale
- The person may not ship to a county or municipality that has not authorized the sale of alcoholic beverages by local option election
- The containers must contain a label identifying the contents as containing alcohol and stating that a signature of a person age 21 or older is required
- the person must provide the commissioner of revenue with required information regarding the amount of wine shipped and must pay all applicable taxes.
The bill’s fiscal anaylsis indicates that the proposed legislation will likely mark a significant increase in revenue ($4,668,200 in FY 2009) to the state general fund, and increase the ABC fund revenues ($150,000) during the same period. In the subsequent period from 2010 – 2011, the bill will likely increase general fund revenue by $9,516,000 in FY 2010 – 2011, while at the same time, increasing ABC fund revenues by $75,000.
Interestingly, SB 0166 was amended, inserting language stating that the bill would not diminish the three-tiered scheme used in the state to separate the manufacture, distribution and retailing of alcohol beverages, wine and beer. How that goal is accomplished by allowing a manufacturer to circumvent the wholesale and retail tier remains to be seen.