Who benefits from wine shipping limits? Not states, not producers, not consumers.

Ninety years on, the rules states built beneath the 21st Amendment are costing them money, costing producers markets, and costing consumers choice. The authority to change them has always been there.

The adult beverage market is in a state of turmoil, which makes this the right time to review and reset the regulations across all states and remove unnecessary barriers.

The 21^st Amendment allows for change. Legislators just need to take a little red ink to the current rules, with the goals of removing the red tape, slashing unnecessary enforcement costs, and increasing overall tax revenue in states where the wholesale tier is crumbling, and tax revenues falling.

I wrote an article recently of the simple changes Tennessee should make to benefit the whole market. My proposals would increase state tax collection, decrease administrative costs, increase consumer choice, and allow producers to bring innovative products to the market, also known as free market capitalism.

Below is a summary of state rules that are unnecessary and provide no value. They have been put forward by the wholesale distribution tier to hinder direct sales, while also increasing the costs for state governments and sellers, reducing consumer choice, and reducing tax revenue the states could be collecting.

For added context, I have a few notes regarding retailer sales that are needed to draw a clearer picture of the nonsense around direct sale limits:

• In-state retailers have no quantity limits. Every limit in the table below is a compromise made by legislation sponsors to get direct shipping laws passed in their state. These can be removed now, reducing state operating costs. After all, out of state wineries are not being licensed as wineries but as direct shipping retailers.

• In-state retailers do not need to register labels. Requiring direct shippers and wholesalers to do so is a burden with no rationale.

• In-state retailers have no ABV restrictions. Federal law classifies a beverage as a wine up to 24% ABV. Some states have made up arbitrary limits so that wines over 16% cannot be shipped direct.

• The enforcement cost falls on states. They need to monitor quantity limits by delivery address, by person, by month, by quarter, by year – none of that is required for in-state retail. To enforce this, states have to collect a lot of personal details on consumers and build systems to track it. That is not consumer protection.

Below is a list of restrictions that direct sellers face – all of which add zero value but create a burden on the states, the seller or producer, and the consumer.

Wine Shipping Laws by State

High ABV

Four states have created their own definition of what is considered a wine for direct shipping. If the ABV of the wine is above that level, it cannot be sold direct, regardless of what the federal law says:

• Montana 16%

• South Carolina 16%

• Vermont 16%

• West Virginia 16% (Fortified wines up to 22% ABV permitted)

These limits prevent value added products like port being sold by the producers directly, for no good reason.

In conclusion, modernizing these rules and reducing regulatory costs requires no compromise on consumer health and safety, and no state gives up its right to manage alcohol sales. If in-state retail sellers had the same quantity limits and tracking requirements, the story may be different. The asymmetry is not an oversight. It is discrimination against out-of-state producers, dressed up as regulation.