Legislators discuss direct shipping of wine in Tennessee

Hank Hayes • Mar 26, 2008 at 12:00 AM

Advocates of legislation to allow Tennesseans to buy and get shipped wine from in-state and out-of-state wineries stated their case to a Senate committee Tuesday, although the bill’s House version has been corked for the year.

The Senate State and Local Government Committee heard pro and con arguments for the bill supported by the Specialty Wine Retailers Association (SWRA), even though the legislation has been withdrawn in the House.

The SWRA said 36 states allow direct shipment of wine to consumers but pointed out that “tens of thousands” of wine products are not available in Tennessee because of the “total control” held by the state’s alcohol distributors.

“Based on other states that allow this same exception to the traditional alcohol distribution patterns, it is likely that 95-99 percent of all alcohol sales would continue to be sold face-to-face in Tennessee brick-and-mortar establishments,” the SWRA said in an e-mailed position paper on the bill.

Under the bill, sponsored by state Sen. Paul Stanley, R-Memphis, the state could issue direct shipping licenses to out-of-state wine shippers, limit the amount of wine shipped, receive revenue from wine sales, and audit the wine shippers. Shippers would have to pay a $100 application fee and provide proof of their current alcoholic beverage license.

The bill’s fiscal impact calculations showed it could bring in more than $10 million in extra revenue to the state through the 2010 budget year.

The bill also mandated the consumer must be obtaining the wine for personal use and not for resale, while shippers would not be able to do business in a county or municipality that has not authorized the sale of alcoholic beverages by local-option election.

The SWRA also stressed the U.S. Supreme Court and Federal Trade Commission both determined minors are “highly unlikely” to use direct shipping to obtain wine.

Tennessee Association of Chiefs of Police President Kim Wallace made a case to the committee against the bill.

“It is critical that we as a state take (alcohol) control seriously and think very carefully about changing the laws that could further open up this access,” said Wallace, who is chief of police in Dover, Tenn. “Underage drinkers will go to amazing lengths to find alcohol and to get drunk. They ask an adult to buy it for them. They get a fake ID off the Internet, and yes, they order online.”

The SWRA said any direct shipping license holders would agree to submit to Tennessee legal jurisdiction and could be prosecuted in Tennessee courts for violations of the state’s law. Tennessee’s attorney general could prosecute out-of-state shippers in federal court if they break the law.

State Sen. Doug Jackson, D-Dickson, suggested the state’s alcoholic beverage system burdens small start-up wineries inside Tennessee.

“I don’t think it’s fair to the little man,” Jackson said.

A separate bill that would allow wine to be sold in retail stores in Tennessee has also stalled on Capitol Hill.

For more information go to www.legislature.state.tn.us and click on “Legislation.” The bill’s numbers are SB 1977 and SB 3139.

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