Out-of-state shipping restrictions in the U.S.: Texas, a case study

I’m not sure where she got her information but my blogging colleague Lindsay Ronga (scroll down) published a pungent post over at the latest Gary V foray into the world of eno-social media, cork’d. In it she wrote:

“Just this week, wine retailers around the country received cease and desist letters from the Texas Alcoholic Beverage Commission (TABC) saying they can no longer ship wine to Texas consumers. The letter specifically told FedEx not to accept any wine retail packages to Texas. Wineries can still ship direct-to-consumer in the state of Texas.”

Good for Texas wine retailers? You bet. Good for wineries? Yes sir. Good for competition? Not a chance. Definitely not good for the Texas consumer. What government decided has put Texas wine retailers ahead of the online competition who most likely offers wine at lower prices.

Her information seemed a little skewed and so I got on the phone with the Texas Alcoholic Beverage Commission this morning to set the record straight (everyone I talked to there was extremely nice, btw, and responded to me very promptly).

Basically, here’s what I found out.

Back in 2005, the Supreme Court ruled that U.S. wineries could ship directly to consumers. Here’s the reference in the Wiki. The idea was that the Congress has the right to regulate commerce between states, trumping the states’s regulation, and that states must allow other states to ship their products to them (this is one of those over-arching concepts at the heart of our country’s creation, evolution, and spirit: free commerce among states).

Back in 2006, a Florida retailer filed a complaint against the governor of Texas, arguing that if wineries had the right to ship their products to Texas, so did retailers.

In 2008, the judge in the case ruled in favor of the plaintiff but after a series of appeals and a decision issued in February 2010, it was decided that out-of-state retailers could ship to Texas if they applied for and obtained the appropriate permits BUT they had to purchase the wine from Texas-based distributors and have the wine shipped to them before they ship it to their customers. See the last ruling in the documentation provided (click to download a large PDF) to me by the TABC and check out this link as well.

Bottom line: IT IS LEGAL for out-of-state retailers to ship here but the logistic and legal hurdles they face makes it impossible to do so.

Having said that, the TABC public relations spokesperson told me that no one has applied for a permit since the 2008 ruling. She also told me that the TABC is aware that out-of-state retailers regularly ship to Texas regardless of the law.

Above: This morning, I grabbed this screen shot from Wine Searcher. It speaks for itself.

According to the spokesperson, the TABC has never sent cease and desist letters to retailers (as stated by Lindsay) but it has sent repeated letters to UPS and Fedex telling them not to ship wine from retailers. The last letter was sent May 14, she said.

She also told me that as long as a purchase was made outside of Texas, an individual may ship wine to Texas. The purchase may not be made by a phone call placed or an email sent from Texas (because the state of Texas considers that a purchase made in Texas).

She pointed out that it’s not the TABC that makes the law but rather the Texas legislature. It’s clear from the documentation provided to me that the big commercial distributors in Texas have lobbied heavily to stop out-of-state retailers from shipping here and they are named as cross-appellants in the documents.

She also told me that she’d never heard of Gary V.

Sorry, Gary.

(Photo of Gary via Peter Hodges)

13 thoughts on “Out-of-state shipping restrictions in the U.S.: Texas, a case study

  1. Hi Jeremy-

    I work at the Wine Library and saw this post. I just wanted to give some more clarification on this issue as it’s going to affect so many wine lovers out there. You’re right that an out of state retailer could purchase from a Texas wholesaler and then ship to the state using that permit. However, the most integral part that’s missing here is the fact that retailers (including us in NJ) can’t buy legally from another state’s wholesaler. This is the biggest reason why as the TABC spokesperson said, “No one has applied for a permit since the 2008 ruling.”

    Regarding the letter that we received from the TABC, it was rather cut and dry as to what was legal and not from now on out. When we see an official document from a state’s ABC that says “Since you do not hold this permit [to buy from Texas wholesalers and then ship back to TX consumers], these shipments are a violation of our law and must cease immediately.”, it’s pretty clear to us that this is a cease and desist.

    Wine shipping laws are among the most convoluted in this country and truly highlight the irregularity because of all 50 states’ different rules and regulations. I hope I was able to clarify some of these gray areas and will answer any other questions to the best of my ability!

    -Kristen kmurphy [at] winelibrary dot com

  2. @Gary is that really you? Naw… Must be one of your minions! ;-)

    @Kristen yes, exactly, that’s what she said: it’s legal if you get a permit but no one has applied for a permit because no one can legally comply with the other requirement that you buy the wine from a Texas distributor. She was more than earnest and open on this point. She claimed that no letters had been sent to retailers but maybe she was misinformed. Lindsay sent me a link to her post last night and so I guessed she wanted me to right about it. Personally, my feeling is that commerce should be allowed liberally between the states and as a consumer, I realize that there are so many wines I cannot obtain in Texas because of the three-tier hold on Texas shipping policy. Thanks for your comment. (And btw, they answer the phone at the TABC and are very helpful.)

  3. Gary V, KMurph, and DoBianchi in one post…this is like some cosmic alignment of online wine stardom.

    It certainly stinks to reside here in Texas and get frozen out of certain wines and some great deals that get floated on the internets on account of non-uniform shipping laws across the 50 States.

  4. Pingback: [one week on the wall; june25...(links)] « G Sheaves: On The Wall

  5. I saw Linda’s post on corkd as well (where I publish occasionally nowadays too). Thanks for the additional investigation, Jeremy. It’s amazing how these restrictions can be put and kept in place in our country – seems plain un-American, yet here we have it. It seems inevitable (hopefully) that the internet will break down barriers traditionally employed to keep people in the dark or taken advantage of, as it has is so many other industries.

  6. Backwards. Always wonder who are these people who lobby for this nonsense. Make a list and boycot any wine they sell that’ll teach ‘m.

  7. the sad bottom line is that there are wines that I simply cannot obtain “legally” in Texas. I can only “legally” obtain the wines sanctioned by the large distributors. I don’t mind not being able to buy wine from Gary V: the wine library is about good value but I’m not interested in 99% of the wines he sells. I’m interested in wines from Rare Wine Co. in Sonoma, Garagiste in Seattle, Biondivino in SF, Vino in NYC. Add to this mix the fact that wine cannot be shipped during nearly 10 months of the year and I’m just plain out of luck.

    But it’s not the TABC who is to blame for this. And it’s not the large distributors either: the size and weather of Texas poses unique challenges when it comes to the shipment of wine here. If Gary V ships to you in July, believe me, you’re not saving any money by buying wine that’s cooked.

    But it sure would be nice if I could legally purchase wines that the big distributors would never even think about carrying. That’s where this whole thing becomes un-American.

    Ultimately, the big distributors will have to change. It’s the nature of the business and it’s the nature of the growing interest in fine wine across our nation.

  8. Interesting post, especially the screenshot of Winesearcher with DEux Montille wines, some of my favorites.

    Maybe you should do a little more research on the history of wine distribution in the U.S., the 18th Amendment/Volstead Act, the 21st Amendment and pre-Prohibition tied house laws and post-Prohibition tied house laws as they relate to the current situation of states rights to govern out of state shipping etc? Do you realize that Mississippi was the last state to repeal Prohibition and only in 1966?

    http://www.waymarking.com/gallery/image.aspx?f=1&guid=fea549e2-0472-4365-b1ed-8d25917c7f00&gid=3

    I am sure with your skills the article would be great.

    Cheers.

  9. @Justin thanks for the insight here. Sounds like you and I need to get a drink at “Noble Experiment” in downtown San Diego! ;-)

    Let’s discuss over some of your fine Schioppettino!

  10. So let me get this straight..If eye get my friends in tennesse to fill my order on wine.com and pay for it in tennessee, they can have it shipped to me in Texas ???

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