PA Direct Wine Shipping Update

In April, I wrote an article for City Paper about the status of direct wine shipping in PA. The article discussed the two bills pending in the state legislature—a bill by Rep. Paul Costa (D. Allegheny County) that would allow only wineries to ship wine into PA, and a bill by Sen. Jim Ferlo (D. Allegheny County) that would also allow retailers to do so.

Costa said he planned to hold hearings this summer on his bill. According to a recent article in The Morning Call, the hearings have started. The legislature may not get to vote on the bill, however, before the end of session. If that happens, Costa will have to reintroduce his bill next year.

That doesn’t bother me—based on The Morning Call article, it appears the legislature needs a little more time to get all of the issues into focus.

The first hearing—which was held at a vineyard in Chester County—seems to have been spent discussing how much money leveling the playing field will cost in-state wineries, which Costa admitted to me in April was one of his main concerns. According to the article, the 18% Johnstown Flood Tax historically has not been levied on wine bought directly from in-state wineries. PA wineries are complaining that the proposed law—which would impose this tax on their wine, the same tax that’s long been imposed on all out-of-state wines—will give out-of-state wineries an advantage.

Even setting aside the logical absurdity that leveling the playing field results in an “advantage” here, cutting in-state wineries a break is precisely why PA’s prior direct shipping laws were declared unconstitutional. Debating whether the field should be leveled doesn’t advance the ball because continuing to have an uneven playing field is no longer an option. The focus now is supposed to be on finding a way for wine to be shipped into PA from out-of-state while still preserving the state’s ability to collect the 18% Johnstown Flood Tax and prevent underage drinking. It’s not clear from the article whether this was discussed at the first hearing.

In addition, it doesn’t appear from the article that there has been any discussion of allowing retailers to ship wine into PA. Consumers often times are not able to buy wine directly from the winery, especially if the wine is made outside the U.S. Failing to discuss retailers at the hearings would reflect a fundamental misunderstanding of how the wine market works. Practically, if the new law does not include retailers, it will be of little use to most of the folks who would take advantage of it.

Even though Ferlo’s bill is by far the better piece of legislation (it allows retailers to ship directly to your door, requires an adult signature for delivery, and accounts for the collection of PA taxes), Costa was the one who had the connections to get the hearings moving. Back in April, though, Costa told me he was open to solutions other than the ones proposed in his bill. We’ll have to wait until the next hearing to see if that’s true.

William Penn once wrote, “Governments, like clocks, go from the motion men give them….” Much like an old clock, legislative progress sometimes is slow. In terms of ironing out the direct wine shipping laws, the lack of speed is frustrating, but it can be tolerated. That is, of course, assuming the time they spend will lead to them getting it right.