Issue link: http://winesandvines.uberflip.com/i/400294
W i n e s & V i n e s n O V e M B e R 2 0 1 4 23 N apa, Calif.—On Jan. 1, Massachusetts opens for direct shipment, leaving Pennsylvania as the only major wine market closed to DtC shipments. According to Shipcompliant's Jeff Carroll, who spoke during the Direct to Consumer Semi- nar organized by the Seminar Group on Sept. 12, Massachu- setts could quickly become one of the top five states for wine sales and represent $70 million to $100 million in sales within a few years. "Massachusetts is a really big state for wineries," Carroll said. "It's affluent, and they like to drink wine." To ship wine into Massachu- setts, a winery has to have a per- mit, report sales annually and pay excise taxes. No sales tax has to be collected. A buyer can only receive 12 cases per year. The law also allows shipping companies to deliver wine, a for- mer problem because each truck had to be licensed. The details and difficulties of complying with the Massachusetts regula- tions overall haven't been deter- mined yet. Pennsylvania is also an impor- tant target, but there, efforts to loosen direct shipping are af- fected by a movement to privatize the state-operated wine and li- quor stores. Another significant change an- nounced this year is that Indiana now requires a somewhat ob- scure electronic method of re- porting transactions for both direct shippers and wholesalers. South Dakota came close to opening to direct wine shipping this year with a proposed 1% wholesale tax and public posting of brands listed. Now 45 states allow shipments from sales made at wineries, and 41 states allow shipments even when the buyer isn't present at the winery. According to the Wines & Vines/ShipCompliant Model, di- rect shipments last year amounted to 3.5 million cases, up 9.3%, with a value of $1.6 billion, up 7.5%. Carroll predicts the value of direct shipments will double to $3.25 billion within a decade. Almost half (48%) of the value of all wine shipments originates in Napa County. California is by far the biggest recipient of direct- shipped wine, representing 33% of the total value, with Texas a distant 9%, New York and Flor- ida accounting for 6% and Illi- nois 4% (about $70 million in shipments). Carroll said that none of the big five states charge unreasonable costs. Carroll also highlighted a growing problem: wines that can't be delivered on the first at- tempt. "Ninety-seven percent of the wines shipped to businesses are delivered on the first attempt, but only 81% to residences," he said. He added that shipments to residences are increasing; they now represent 63% of all ship- ments. He strongly recommends asking customers if they can re- ceive the wine at work, as re- turned wine can be expensive or even unsellable. —Paul Franson DtC Rules Revealed for Massachusetts "Massachusetts is a really big state for wineries. It's affluent, and they like to drink wine." —Jeff Carroll, shipCompliant N O V E M B E R N E W S N O V E M B E R N E W S