N.J. Senate to vote on direct wine shipping
June 29, 2011By Jen Howard
It's now illegal to ship wine directly to consumers in New Jersey. But a bill before the state Senate may change that.
"Bottom line, this opens up a lot of opportunities for New Jersey wine consumers," said Tom Cosentino, the spokesman for UnCorkNJ, a wine consumer group pushing for direct shipping.
If the bill passes, any winery could ship directly to N.J. customers. So, you could go on a wine-tasting tour in California, fall in love with a velvety Merlot, come home, and order it over the Internet to your heart's content.
"This is going to be nothing but a positive for New Jersey wineries for consumers who want a choice," Cosentino said.
Except that it isn't quite that simple.
New Jersey now has a three-tiered system for wine sales. Wineries sell their products to distributors, distributors sell to wine retailers, and retailers sell wine to consumers.
Retailers object to change
Peter Fletcher, who owns Canal's wine in Marlton, said direct shipping could put his business at risk.
"It hurts the retailer because we're potentially taken out of the loop on a portion of the business going on," he said.
After all, if you can get a cheaper price by buying directly from a winery, who needs the wine shop?
According to Peter, the answer is anyone who isn't a sommelier. Not everyone does their wine shopping at a California vineyard. Or even a New Jersey vineyard. Mostly, he says, consumers benefit from walking into a shop with an on-site expert and with a diverse selection of wines they would otherwise never see.
In other words, wines that a distributor stocks.
But, said Fletcher, "If it turns out that wineries start shipping directly to consumers, they might bypass that and not go through the wholesale distribution, and a lot of retailers wouldn't have access to those products."
Neither would the consumer, he said.
Tom Sharko, owner of Alba Vineyard in Milford, agreed.
"It's the local retailer that introduces 99.9 percent of people to wine," he said.
Including his--Sharko says he sells about half of his wine to distributors. Which makes him lucky. Most of the wineries in New Jersey are too small to attract a distributor. They just don't produce enough.
So how do they make it work?
Well, through off-site tasting rooms or "outlets." These outlets can sell wine directly to consumers. And it's a real boon for New Jersey winemakers, because out-of-state wineries are not allowed to have such outlets.
Outlets may be out
Turns out, that situation was too good to be legal. Last year, a federal judge said the advantage is unconstitutional. Either all wineries--both in-state and out-of-state--get to have outlets, or none does. If the state Legislature can't work out a solution to the problem by this Friday, that judge will choose which option becomes law.
In the meantime, wineries are left in limbo. They stand to lose a huge revenue stream if they can't get their bill through the Legislature.
Sharko's upset. "So, it's this gigantic stalemate," he said. "The wineries are being used as pawns in a game that we never wanted to participate in."
It's a real shame for wine lovers outside the state, too.
"Where do you buy a good bottle of wine in Pennsylvania?" asked Sharko. "In New Jersey."