Board at work on rules for shipping state wine

 Arkansas Democrat-Gazette/STATON BREIDENTHAL --7/03/13-- Post and Wiedekehr wines, both produced in Arkansas, on the shelf at Popatop Liquor store in Little Rock.

Arkansas Democrat-Gazette/STATON BREIDENTHAL --7/03/13-- Post and Wiedekehr wines, both produced in Arkansas, on the shelf at Popatop Liquor store in Little Rock.

Saturday, July 6, 2013

Arkansas wineries trying to draw out-of-state tourists will have another tool available in late summer: the ability to ship up to a case of wine to a visitor’s home.

The state Alcoholic Beverage Control Board is drafting rules to implement a new law passed by the Legislature earlier this year and hopes to have a website to facilitate such purchases up and running when Act 483 of 2013 takes effect Aug. 16.

The law allows the direct shipment from a winery to the buyer’s home of up to a case of wine once every quarter. For the shipment to take place, however, the buyer must be present at the winery at the time of the sale. The new law doesn’t allow online, phone or mail-order sales.

On Tuesday, Michael Langley, director of the Alcoholic Beverage Control Division, called the law an attempt to help draw tourists to Arkansas wineries by allowing them to sample wines and then send some home rather than being forced to figure out how to pack it in a vehicle for the ride home. The same shipment rule would be true for Arkansans who travel to other parts of the country who want to ship wine home from a winery they visit.

“The idea is to promote tourism to get people to Arkansas to buy wine to be able to ship it,” Langley said. “Yes, we like the idea of being able to ship from California in here. But go visit our Arkansas wineries. Don’t feel like you have to tote a case of wine around. Buy it, send it home, use that to give as gifts and those types of things and not just for consumption.”

Arkansas has 18 small farm operations permitted to manufacture wine. Half are in Franklin County and include Post Famile Vineyards & Winery and Mount Bethel Winery, both of Altus, and Wiederkehr Wine Cellars Inc. of Wiederkehr Village.

Michael Post, chief executive officer of Mount Bethel Winery, called the law a step in the right direction by allowing out-of-state shipment of Arkansas-produced wines.

Several times a week, Post said, tourists visiting his winery ask about shipping wine or whether they can order a wine when they return home and decide they want a bottle.

However, Post said the requirement for “face-to-face” contact at the time of sale still limits the ability of the state’s winemakers to grow.

Post, president of the Arkansas Wine Producers Association, said the legislation, presented by Rep. Mary Broadaway, D-Paragould, caught the association by surprise.

“We were not the driving force behind the legislation,” Post said. While the association discussed trying to amend the legislation to drop the “face-to-face” sales requirement, he said it eventually decided to “leave well enough alone.”

Broadaway, who said she presented the legislation at the request of House Speaker Davy Carter, R-Cabot, called the bill something “that would be positive for tourism” as well as provide the opportunity to expose Arkansas wine to a larger market.

On Tuesday, Carter said the ability to ship wine home from another state appeals to him because he likes to visit wine regions while traveling.

“That’s something I wanted to see passed because I personally enjoy traveling around, going out to Napa in particular. And there are a lot of Arkansans that do as well,” he said. Napa Valley is a famous wine-growing region north of San Francisco. “When you sign up to get a bottle of wine shipped to you, and they open the book up and say, ‘Well, we can’t do that,’ that’s frustrating.

“It’s something I’ve always wanted to see changed. While you’re speaker, that’s a pretty good time to get something done.”

Carter said distributors in Arkansas, who have traditionally opposed direct shipments by wine producers to consumers, can live with the law because of the limits it imposes, including a case per quarter per winery and the requirement for in-person ordering.

Carter said he agrees that while allowing Arkansas wineries to ship directly to consumers would be best, that would require allowing out-of-state wineries equal direct access, which he said would have been difficult to pass.

“It is what it is. You’ve got to get votes,” he said. “I don’t know I would have gotten a stronger bill passed, honestly.”

The shipping-law change will mark the first time since 2007 that Arkansas wineries can ship their products to consumers, even on a limited basis.

Arkansas began giving preferential treatment to instate wineries in 1935, two years after the end of prohibition.

In 2005, a federal lawsuit challenging the Arkansas laws’ preferential treatment - which included the newly passed Act 1806 of 2005 that allowed only in-state wineries to directly ship to customers - was filed after the U.S. Supreme Court ruled in an unrelated case that state laws allowing in-state wineries to ship to consumers but blocking out-of-state wineries from doing the same thing violated the Constitution’s Commerce Clause.

In response to the Supreme Court decision, the Legislature passed Act 668 of 2007, which again prohibited shipping directly to either in-state or out-of-state consumers. But the act gave the state’s small farm wineries the ability to sell their products in grocery and convenience stores.

An impact statement prepared for Act 483 by the Department of Finance and Administration estimated the state would collect $14,420 annually in sales and beverage excise taxes from the new law, based on an estimate of 100 cases of wine per quarter being shipped into the state. It estimated an average cost per bottle of $30.

Langley said wineries both in and outside Arkansas would have to register with the state to ship to customers who have visited their wineries. He hopes that the new state website would allow all wineries to fill out necessary forms to ship the wine, such as shipping labels, which also will allow the state to track the shipment for tax purposes.

Wineries are responsible for the following taxes: 75 cents per gallon on wine; 25 cents per gallon on light wine; 5 cents per case; a 3 percent excise tax; and a 6 percent general excise tax.

The Alcoholic Beverage Control Board will hold a hearing on the proposed regulations on Aug. 21 at its offices in Little Rock.

Front Section, Pages 1 on 07/06/2013