Heady bouquet: Confusion reigns in vineyard victory
When local fans of television's The Bachelor wanted to toast Andrew Firestone's choice of Jen with a bottle from the now famous Firestone Vineyard in California, they were dismayed to learn that it's illegal for the Santa Barbara winery to ship directly to customers in Virginia.
In theory, that should change on July 1, when Virginia's direct shipment law goes into effect. Passed earlier this year by the General Assembly, it allows Virginians to order wine from their favorite out-of-state winery and Virginia wineries to ship two cases a month to out-of-state customers.
But don't count on being able to order that bottle of Firestone wine on July 1 unless the family Firestone has applied for a Virginia shipper's license.
And less than two weeks before the law takes effect, some Virginia winery owners still aren't sure exactly what they can do under the new law. Even Tim Gorman, president of the Virginia Vineyards Association, who lobbied for the legislation, is slightly befuddled.
"I'm still not sure where I can ship," admits Gorman, the owner of Cardinal Point Vineyard in Afton. "The Fed Ex guy says it's not clear."
Alcoholic Beverage Control Board spokesperson Becky Gettings is trying to sort it all out.
"These licenses are for sale and shipment into or within the Commonwealth," says Gettings. Virginia wineries shipping, say, to California, don't need the Virginia shipper's license, according to Gettings. Instead, they must abide by California state law.
And there have been "very, very few" applications, says Gettings. At press time, two in-state wineries and five from out of state had applied for the license, and the ABC's goal is to turn the applications around within 30 days. Even Gorman hasn't applied for the $50 shipper's license yet.
UVA law professor Dan Ortiz set the wheels in motion for opening up Virginia for wine lovers. He filed the lawsuit that led a judge last year to declare Virginia's prohibition against out-of-state shipping unconstitutional.
He's taking a wait-and-see attitude toward the new legislation. "It's a step in the right direction," says Ortiz. "Final regulations haven't been issued. We're going to wait to see how burdensome they are."
For example, he wonders about the criminal background checks required for those who apply for a license, and how difficult that will be, particularly for out-of-state shippers.
Criminal histories will be checked only through the Virginia State Police, says Gettings.
"At the end of the year, we'll see how it works for the wineries," Ortiz says.
Bill Moses, CEO of Kluge Estate Vineyard and Winery, is very satisfied with the new law. "It started with the lawsuit," he says. "That highlighted a number of issues."
In particular was the "love-hate relationship" between wineries and wholesalers, says Moses, whom Governor Mark Warner appointed to the Virginia Winegrowers Advisory Board. Wholesale distributors had opposed direct shipping, while small wineries complained that they didn't sell enough wine for distributors to carry.
"The wineries and distributors sat down and talked," says Moses. To make a direct shipment law palatable to distributors, licensed wineries can ship no more than two cases a month to consumers in the as-yet-unidentified reciprocal states. The wine has to be shipped on a common carrier so that the shipments are traceable, and it has to be signed for by someone over 21 years old.
"The economic impact is huge," says Moses of Virginia's $95 million wine industry. "Wine is the only growing agricultural segment in the state."
And shipping wine outside the state is essential for the fledgling industry. Otherwise, he says, "We're not gaining any reputation outside our borders."
His understanding is that Virginia winemakers will be able to ship to the 13 states identified as reciprocity states by the Wine Institute. Other states allow limited shipments or require permits, while some states like North Carolina consider it a felony to ship wine into the state.
Wine laws throughout the country remain in flux. The South Carolina legislature just approved a law similar to Virginia's. However, "North Carolina took a step back," says Tim Gorman. The 4th Circuit Court of Appeals ruled it was unconstitutional for the state to bar out-of-state shipments while allowing North Carolina wineries to direct ship within the state. The state can either allow all shipments– or none.
Gorman is eagerly awaiting a New York court decision in a case similar to the one Ortiz filed in Virginia. "If we can break New York, the attitude is that the rest of the northeast will follow," he says.
In anticipation of July 1, Gorman's Cardinal Point Winery has ordered shipping boxes and has orders waiting from out-state-customers.
And once Virginia wineries figure out which states they can ship to, sales are destined to increase. "As a winery," says Gorman, "40 percent of our customers are from out of state, and we couldn't follow up before."