Massachusetts: Most retailers sour on new wine shipment law

By Mark Sullivan August 3, 2014
News Telegram
Wine will flow more freely in Massachusetts as a result of a new law allowing consumers to order wines direct from out-of-state vineyards.

That's good for business, in the view of Frank Zoll, owner of Zoll Cellars Winery in Shrewsbury, who hopes to see the market grow for small niche brands like his own.

"I think it will help a lot of smaller producers to create demand here," Mr. Zoll said. "It will open up new markets within the state."

Not everyone is raising a glass to a new law, however. The Massachusetts Package Store Association opposed the provision in the new state budget that lifts a prohibition on direct deliveries from out-of-state wineries to Bay State consumers.

Policing sales

"It certainly is going to have an effect on retailers," said Frank Anzalotti, executive director of the West Springfield-based professional association, which represents more than 800 retailers in Massachusetts.

Free the Grapes, a wine industry-backed group based in Napa, Calif., has campaigned for direct-to-consumer wine shipping that is allowed in all but nine other states.

"It's about consumer choice," said Jeremy Benson, a spokesman for Free the Grapes. He said wine lovers in Massachusetts had been among the most vocal of those in states with direct shipping bans.

Former New England Patriots quarterback Drew Bledsoe, who operates a winery in Washington state, lent the campaign a high-profile endorsement.

Some local retailers are less enthusiastic.

Ryan Maloney, owner of Julio's Liquors in Westboro, said out-of-state wine growers should pay more of the costs of administering this expansion of alcoholic beverage sales, with the accompanying responsibility to prevent sales to minors.

"It isn't just gumballs being shipped across the state line," he said.

Cost of licenses

Mr. Maloney said a bricks-and-mortar package store can pay more than $2,000 a year for a license to operate, depending on the locality. For example, in Worcester, a package store license to sell beer and wine costs $2,250 and an all alcohol license costs $2,750.

By contrast, under the new Massachusetts law, which takes effect Jan. 1, domestic wine producers will pay $300 initially for a direct shipper's license, with a $150 renewal fee each year.

"Certainly Mr. Bledsoe can afford to pay more" than that, said Mr. Maloney, if a mom-and-pop package store must pay thousands to do business in Massachusetts.

The Massachusetts Package Store Association had hoped the legislation would enable retailers to ship out of state, Mr. Anzalotti said, but the new law does not.

Michael Cimini, owner of Austin Liquors in Worcester and Shrewsbury, predicted the economic impact of direct wine shipping won't be great.

But at the same time, out-of-state shippers are benefiting from comparatively low license fees, he said, and they won't be subject to the same law-enforcement scrutiny as local package stores when it comes to keeping alcohol out of the hands of minors.

"Whether (the new law) is a good thing or a bad thing, it's definitely an unfair thing," Mr. Cimini said.

At Zoll Cellars Winery in Shrewsbury, Frank and Meghan Zoll produce more than 500 cases of wine annually from their half-acre home vineyard on Old Mill Road. They sell their wine at farmers markets, shops and restaurants in the area.

Impact on gift giving

Mr. Zoll predicted Massachusetts consumers, given greater opportunities to try wines from small out-of-state vineyards not widely represented on local package store shelves, will encourage their local wine shops to stock these brands. This will lead to greater diversity on wine store shelves and greater demand for niche brands like his, he said.

"In the long run, that will help me," Mr. Zoll said.

Since 2005, Massachusetts vineyards have been able to ship to customers in state, said Mr. Zoll, adding that a small percentage of his business involves mail orders to residents of Massachusetts and New York state.

Most wine-store customers are shopping for a bottle that sells for $20 and under, he said. He predicted the impact of direct wine shipping on retailers most likely will be felt at the higher end of the price range, particularly at holiday gift-giving time.

A customer who orders wine at $30 a bottle online may end up paying another $30 for shipping on six bottles, he said. The shipping cost eventually will drive the niche-brand customer back to the wine store, he predicted.

"People will go to the liquor store and say, 'Can you bring it in?' "

So loosening restrictions on shipping the grape will benefit small growers like himself and package stores in the long run, Mr. Zoll predicted.

"We'll see a lot more wine flowing in and out," he said.