Direct-to-Consumer Wine Shipment Comes To Massachusetts On January 1

Another Reason to CelebrateWine Delivered Straight to Your Door! This holiday season brings an extra reason to celebrate for Massachusetts wine enthusiasts. When long-overdue changes to Mass. Gen. Laws. ch. 138, § 19F take effect at 12:01 a.m. on January 1, 2015, Massachusetts residents will finally be able to purchase wine directly from most out-of-state wineries and have it shipped to their door. Historical Prohibitions on Direct Wine Shipment in the Commonwealth The law governing the direct shipment of wine to Massachusetts residents has a long and convoluted historyowing to changes in Supreme Court precedent, in-state protectionism, and legislative sluggishness. From the end of Prohibition in 1933 until 2006, Massachusetts law permitted in-state wineries to sell and ship their wines directly to Massachusetts residents, but prohibited out-of-state wineries from doing the same. Mass. Gen. Laws. ch. 138, §§ 2, 19, 19F. In 2005, the Supreme Court of the United States ruled in Granholm v. Heald1 that similar laws in New York and Michigan unlawfully discriminated against out-of-state producers in violation of the Commerce Clause. Recognizing that Granholm rendered the Commonwealth's direct shipping rule unconstitutional, in 2006 the Massachusetts legislature adopted a new version of Mass. Gen. Laws. ch. 138, § 19F. This new version compelled "large" wineriesthose producing more than 30,000 gallons of wine per yearto choose either to ship their wine directly to consumers or distribute it through Massachusetts-based wholesalers. At the same time, the new Section 19F allowed wineries producing less than 30,000 gallons per yeara cap that encompassed all Massachusetts wineriesto simultaneously engage in direct shipping and wholesale distribution, as well as a third option completely unavailable to large wineries: direct distribution to retailers. The practical effect of this statutory regime was that most out-of-state wineries wishing to sell wine to Massachusetts consumers were forced to distribute exclusively through wholesalers, as those wineries were unwilling to forgo the revenue and increased brand awareness offered from wholesale distribution to the retail market. Further, for profitability reasons, Massachusetts wholesalers typically carried and distributed only one or two of a winery's lower priced, higher volume wines, rendering the remainder of that winery's offerings unavailable in Massachusetts. Unlike the statutes invalidated in...