October 1, 2016
When Pennsylvania lawmakers revised the state's alcohol laws this summer, they gave residents the ability to have wine shipped from any winery in the world to their doorstep.
The move jolted Pennsylvania from a handful of states that barred direct wine shipments to the forefront by allowing any winery — even foreign ones — to apply for direct shipping permits.
The changes were part of Act 39, an alcohol law overhaul that granted grocery stores and others with restaurant licenses to sell wine to go, put lottery ticket machines in state stores and expanded store hours.
As of last week, 463 wineries across the United States had received direct-shipping permits from the Pennsylvania Liquor Control Board. No foreign wineries have applied, LCB spokeswoman Elizabeth Brassell said.
Observers say Pennsylvania is poised to be a test case for how wineries could navigate complex federal and state laws to get their products directly to customers while bypassing liquor stores.
"There is absolutely no precedent here or law I can see on the books other than what you guys have got in front of you," said William Earle, president of the National Association of Beverage Importers. "In some ways, Pennsylvania is a leader here and blazing a trail (that) we're not sure where it's going to head."
Earle's Washington, D.C.-based organization represents companies that import beer, wine and spirits from other countries. He said he's concerned that Pennsylvania's new law doesn't spell out a clear procedure for foreign wineries.
Alcohol can be brought into the United States only by a licensed importer that has a physical presence here. The importer ensures products from abroad comply with federal labeling laws and customs regulations. They also make sure foreign producers pay federal excise taxes, putting imported products on even footing with domestic counterparts, Earle said.
That would still be the case for wine being sold and shipped directly to a customer, said Tom Hogue, spokesman for the Alcohol and Tobacco Tax and Trade Bureau, a part of the U.S. Department of Treasury that approves all alcohol labels.
"A foreign entity isn't going to be able to get an importer's permit," Hogue said. "You have to have an importer here."
Those logistics could make it difficult — or unappealing — for foreign wineries to attempt to sell directly to customers.
"If we were to get an application (from abroad) ... we would certainly take a look and process it," Brassell said.
Still, wine enthusiasts have cheered the new law for opening up direct shipping, making it easier to get wines from California's Napa Valley or New York's Finger Lakes, for example.
Before Act 39, only licensed limited wineries could ship to customers' homes while other wine shipments had to go to a state store and could only be for products Pennsylvania stores did not carry. Shipments were limited to one case per month per winery. Those limits tripled under the new law.
To date, 322 of the 463 licensed shippers, or nearly 70 percent, are from California.
Pennsylvania wineries account for 46, or 10 percent.
The right to ship directly was previously part of their limited winery license. Under the new law, state wineries have to apply for the shipping permit and pay a $250 fee.
Direct shipping is "a great channel for small wineries to grow their brands," said Terri Cofer Beirne, eastern counsel for The Wine Institute, an advocacy group for California wineries. "Shipping is an important way to connect when you're not big enough to be selling (nationally)."
For Glades Pike Winery in Somerset, direct shipping has never been a big part of its business.
"At the same time, it's a nice feature of our business for people who travel here" and want to have wine shipped home to them, said Liz Diesel, general manager.
She said she doesn't mind the extra permit fee and said the application process was simple.
As a consumer, she said she is personally excited by the change.
"It's a great feature because some of my favorite wineries outside Pennsylvania can ship directly to me," Diesel said. "As a wine lover ... it opens up Pennsylvania."