Wine Without Borders: Pending Legislation in Arizona

In Monday's class, Lori said that she thinks the industry and tied-house laws are on the brink of some large changes. Being a regulator herself and having seen the industry over such a long period of time, I trust her predictions. It inspired me to do some research on recent and upcoming changes in U.S. wine law.

Arizona came up early in my search as it is an example of a state that is on the brink of some potential changes to its shipping laws. Currently, Arizona does not allow residents to order out-of-state wines by telephone or online.

A bill was proposed last week that would allow residents over age 21 to receive out-of-state wine shipments, so long as they didn't surpass 218 bottles annually. The bill is championed by Napa valley based "Free the Grapes", an advocacy organization that has successfully undertaken similar policy changes in other states.

While this legislation clearly benefits out of state sales, in-state wineries, represented by the Arizona Wine Growers Association, also support this legislation. The President of the organization (also a wine grower himself), argues that by not allowing Arizona residents to join wine clubs of out-of-state vineyards hurts the overall wine industry in Arizona, since it stifles the growth of a broader wine culture in the state.

Another reason why the proposed legislation benefits under current law, in-state wineries had to remain small - below 20k gallons per year - in order to be able to directly ship to consumers and accept online and phone orders. This effectively put a cap on the size of Arizona wineries. The fact that wine growers within and outside of the state support such a shift further underscores that these laws are antiquated.

As Anne's post mentions, Pennsylvania is the final sizable untapped market opportunity for wine shipping and state imports. I'm eager to see how this unfolds.

http://www.azliquor.gov/

http://www.azcentral.com/story/news/arizona/politics/2016/01/15/bill-would-allow-arizona-wine-orders-phone-online/78858864/