Wednesday, January 8, 2014

More than 340 wineries can already ship directly to Montana consumers

Posted By on Wed, Jan 8, 2014 at 3:15 PM

Up until a few months ago, Montana was the only state in the country that required residents to obtain a $50 license for the privilege of ordering wine by mail. The system called for twice-annual reports and tax payments from those connoisseur license holders as well as a $25 annual renewal. According to Steve Swanson, management analyst at Montana’s Liquor Control Division, there were only 173 licensed wine connoisseurs statewide at the end of June.

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Now, as online shoppers may already have noted, wine can flow to nearly anyone’s front door. The 2013 Montana Legislature approved House Bill 402 last spring, replacing the state’s decade-old wine connoisseur license with a direct shipment endorsement and joining 39 other states in putting the burden of licensing on wineries themselves.

“So far, it appears that we’ve approved a little over 340 wineries that have applied for the direct shipment endorsement,” Swanson says. That list includes several in-state wine companies, which were previously excluded from shipping to connoisseur license holders.

Opposition to HB 402 last year came largely from wholesale distributors who claimed the new direct shipment system would be virtually unenforceable. Fun Beverage Inc., a Kalispell-based beer and wine distributor, offered written testimony calling HB 402 “another example of the deregulation of alcohol for the economic benefit of a few special interests at the expense of public interest.” Fun Beverage concluded that the bill could pave the way for direct-to-consumer systems for beer and even spirits, “further eroding transparency, accountability and public safety.”

HB 402 did outline several safety stipulations for direct wine shipping, including labeling that explicitly identifies the contents as alcoholic and a requirement that all participating wineries supply the state with monthly reports detailing every shipment made. The fiscal note for HB 402 posited that 435 wineries would eventually apply for direct shipment endorsement, generating $21,750 in annual revenue for the state. Swanson estimates the previous license system netted the state less than $6,000 in revenues last fiscal year.

Connoisseur licenses haven’t entirely vanished in Montana. Individuals seeking to order beer from out-of-state breweries still need a $50 beer connoisseur license. Tony Herbert, executive director of the Montana Brewers Association, says a direct shipment endorsement is “not a big item” on the industry’s agenda. If demand ever increases, Herbert adds, the MBA would reexamine its position. But as of June, Swanson says there were only six licensed beer connoisseurs statewide. All six were also licensed wine connoisseurs.

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