Tennessee Wholesalers – Crossing the Line?

Sovos | March 24, 2008

There are a couple of direct shipping bills in the Tennessee legislature that would allow Tennessee consumers to order wine from any winery or retailer in the country, with some of the regular restrictions. This would be a big deal, considering direct shipments into Tennessee have not been allowed from any state in recent history. However, what would normally be a run-of-the-mill direct shipping bill has turned into a subject of controversy over actions taken by Tennessee wholesalers to sway public opinion of the bill.

Wine Spectator Online reports that Tennessee wholesalers have been sending direct-mail and online initiatives to Tennessee residents, saying that SB 1977 and its counterpart, HB 1850 are a threat to Tennessee’s youth and asking them to sign a petition for children to come first. Jackson, one of the authors of the bill, has notified the Tennessee ethics commission of the wholesalers’ intent, saying that this is illegal lobbying because the direct-mail and online initiatives say nothing about being funded by the Tennessee wholesalers. He argues, “[those who view the teen drinking initiatives] think it’s some sort of philanthropic organization that’s concerned about youth consumption of alcohol. But the populous is deprived of the ability to find out who’s really behind this campaign” and that the bill wouldn’t increase availability of wine to minors. Tom Wark of the Specialty Wine Retailers Association issued a press release about Tennessee SB 1977 and has this to say about minors obtaining wine via direct shipping:

The Supreme Court of the United States and the Federal Trade Commission both looked at the issue and determined that minors are highly unlikely to use direct shipping to obtain wine. No state that allows direct shipping has reported even a small problem with minors accessing wine via direct shipping.

That being said, we should focus on what is really important about this bill: consumer choice. If passed, SB 1977 would allow permitted wine manufacturers, producers, suppliers, importers, wholesalers, distributors and retailers to ship wine directly to Tennessee residents. Permitted shippers could ship no more than 18 liters per year to an of-age Tennessee resident in a “wet” area. The permitted shipper would have to pay a $100 application fee, a $50 annual license fee, and pay sales and excise taxes on all shipments.