Louisiana Governor Signs Improved Consumer Wine Shipping Bill into Law

On June 22, 2016, Louisiana Governor Edwards signed legislation (HB 667) into law which will allow wineries holding a Direct Wine Shipper permit to ship wine directly to consumers (DtC) in Louisiana, without requiring the consumer to visit the winery—as long as the wine has not been assigned to a Louisiana wholesaler. The newly-signed law removes the existing restriction that prohibited any winery with a direct or indirect agreement with a licensed wholesaler in Louisiana from making any off-site DtC sales, a relatively new policy reported on in March. The legislation does not change rules for on-site DtC sales, though. The new rule will greatly expand Louisiana consumers’ choice in wines.

The legislation also replaces the current Louisiana Alcohol Tobacco Control (ATC) direct shipper registration process with a requirement to obtain a Direct Wine Shipper permit. The ATC direct shipper permit fee for out-of-state wineries is $250, and for out-of-state retailers, $1000; these permits must be renewed annually. These new permit fees will provide funds for greater enforcement from ATC.

Out-of-state wineries must continue to register with the Louisiana Department of Revenue (LDR) and pay the annual $150 registration fee.  The annual LDR registration fee for out-of-state retailers is reduced from $1,500 to $1,000.

Direct shippers are required to pay sales and excise taxes on direct shipments made to consumers in Louisiana. They must also report to the LDR on wine shipments they’ve made. However, the new legislation changes the reporting and payment period from every quarter to every month.

In addition, wineries holding direct shipper permits will now be required to register labels of products for off-site DTC sales with ATC.  Louisiana requires labels to registered online. The fee for label registration is $5 per label. Label registrations are valid for one calendar year before they must be renewed.

The law becomes effective on July 1, 2016, however, the new permits will not be available quite so soon. Wine Institute and ShipCompliant will publish the rules for obtaining an ATC permit and registering labels for off-site DTC on the Wine Institute website and ShipCompliant Blog when developed.

 

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7 Comments

  1. Melissa Heller

    If you have already registered the label in LA because of wholesale sales, will you need to re-register the label for direct ship under the direct ship license as you do in IL??

    Reply
    • Rachel Bush - Brand Manager

      Hi Melissa, thanks for the question! The law change now means that if you have registered a label for distribution with a Louisiana wholesaler, you may not also sell that label DtC. So you won’t need to re-register it for direct shipping because it won’t be allowed to have it registered for both wholesale and direct sales. In order to sell a label DtC that’s already registered for wholesale, you will need to contact your LA distributor and let them know you will no longer sell that label wholesale in the state. As far as registering labels for DtC goes, we are working with the ATC to determine that process, and will be sure to let you know as soon as we have an answer.

      Reply
  2. Boris Seymour

    Direct shipper permit fees for out-of-state wineries is $250 are too high a bar for many small family wineries. They essentially keep the law as it has been. How many cases of wine will one ship to each state in the US that has a direct shippers fee? It could cost as much as $12,500 a year in fees (and taxes) to ship to all 50 US states if they all had a $250 fee. On top of that there is all the regulatory paperwork or fulfillment house fees.

    Reply
  3. Mark Bell

    What container sizes are legal? Are aggregate packs legal? I have 250 ml cans packed 4 per carton to make a liter size.

    Reply
    • Alex Koral - Compliance Law Research Associate

      Hi Mark,

      Thanks for the question. In Louisiana, the minimum size for a wine bottle is 187 mL. It should be legal then to sell them in a pack (just like a case of 750 mL bottles); however all beverage alcohol products need to be registered with the state–and there may be more requirements if your selling them in a pack, such as registering details on the package itself; I’d recommend calling the state and asking about your particular concerns. Also bear in mind, that in Louisiana, you cannot sell wine DtC if it is already being sold through a local wholesaler, which must be an important consideration when deciding what to sell there.

      Reply
  4. Laura

    These are old laws and, frankly, hurt small businesses around the country. We should be able to order wine directly regardless of state wholesale permits. How do we change this?

    Reply
    • Alex Koral - Product Compliance Manager

      Hi Laura,

      Thanks for the question. The best way to change the laws are by engaging with your state legislators and letting them know your feelings on the direct to consumer laws in your state. However, this can be difficult as an individual. Free the Grapes! is the leading consumer advocacy organization engaging in action on enabling direct to consumer sales. I don’t believe they have any activities currently going on in Louisiana, but you can reach out to them with your concerns and try to shape future policy. If I can say, though, direct to consumer laws are fairly recent and overall positive for the wine market. There are certainly still restrictions that could be removed, but the general trend these last couple decades has been to loosen rules and free up the market — I wouldn’t be so quick to categorize all beverage alcohol rules as outdated and harmful.

      Reply

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