WINE INDUSTRY CODE FOR DIRECT SHIPPING

Free the Grapes! developed a code of guidelines for direct shipments of wine to adult consumers for personal use. The purpose of the voluntary code is to provide shippers with a framework which, when adopted, will ensure that direct shipment orders and deliveries are completed in a manner consistent with appropriate laws, satisfies consumer demand, and supports the tenets of Free the Grapes!:

• support legislative provisions that satisfy tax payment provisions and reporting procedures
• protect against sales to minors
• respect state and local Prohibition laws (e.g., "dry" laws)
• support a vibrant national marketplace for the responsible enjoyment of wine

Introduced on January 12, 1999, several of these principles were taken from the model direct shipment law, which was proposed by the Coalition for Free Trade, Family Winemakers of California, Wine Institute and American Vintners Association (now WineAmerica), and recommended for adoption by the National Conference of State Legislatures, Task Force on the Wine Industry, on November 5, 1997.
Wine Industry Code for Direct Shipping

1. Out-of-state licensees may direct ship wine sold to adult consumers, for personal use, only in states where it is legal to do so.
2. Out-of-state licensees must not ship to an address in an area identified by an appropriate state department of alcohol beverage control as a "dry" or local option area for such shipments.
3. Cartons used to direct ship wine to adult consumers must be conspicuously labeled with a minimum notification "signature of person age 21 or older required for delivery" and must include a return address and other language required by specific state laws. Licensees may opt to further identify the contents, including words such as "wine enclosed" or "contains alcohol." Free the Grapes! recommends that wineries support shippers, fulfillment companies and freight consolidators who utilize this labeling procedure.
4. Licensees must verify the purchaser’s age at the point of online purchase before completing any transaction. Some state laws now require age verification using a state-approved vendor, or by receiving a copy of the purchaser’s drivers license, prior to the completion of the transaction. Additionally, licensees must notify purchasers that the recipient will be asked to show identification upon delivery.
5. Wineries must comply with all anti-spam legislation. For example, some states have enacted laws designed to prevent wine-related emails that might be unintentionally sent to underage consumer who have registered on a “do not email” database, and requires wineries to have their email lists scrubbed against a database of “do not email” lists.
6. Free the Grapes! encourages licensees to contract only with shippers who check the identification of recipients at the time of delivery to ensure that the recipient is 21 years of age or older.
7. All out-of-state licensees must report to the appropriate state authority the total of wine shipped into the state the preceding calendar year, as required by state law. Additionally, as required by state law, out-of-state shipper licensees must pay the appropriate state agency sales and excise taxes due on sales to residents of that state in the preceding calendar year.
8. Out-of-state licensees should offer consumers resources for answering their questions about direct shipping, including Free the Grapes! (www.freethegrapes.org), Wine Institute (www.wineinstitute.org), Family Winemakers of California (www.familywinemakers.org), WineAmerica (www.wineamerica.org), and Specialty Wine Retailers Association (www.specialtywineretailers.org), among other resources.
9. Free the Grapes! encourages wineries to conspicuously post this code and train employees, to increase the knowledge of and appreciation for, the industry's responsibilities in direct shipping.
10. Wineries, their agents, retailers, fulfillment companies, freight consolidators and other shippers who do not abide by this voluntary code of business practices are not in compliance with wine industry sanctioned standards. Non-compliance undermines the wine industry's desire to: a) fulfill consumer demand, b) comply with government regulations and controls, and c) support a dynamic distribution system which embraces both the efficiencies of the traditional three tier system, and the evolution of a dynamic, direct-to-consumer marketplace.

Code Updates:
December 2006: added provisions on anti-spam laws, age verification.

MODEL DIRECT SHIPMENT BILL

Adopted by the National Conference of State Legislatures, Task Force On The Wine Industry, November 5, 1997, Washington D.C. Proposed by Family Winemakers of California, Coalition for Free Trade, The Wine Institute and the American Vintners Association.

Add new Section ----- to the Alcohol Beverage Control Act as follows: Section ----

1. Notwithstanding any law, rule or regulation to the contrary, any person currently licensed in this or any other state as a wine producer, supplier, importer, wholesaler, distributor or retailer who obtains a Wine Direct Shipper License, as provided below, may ship up to twenty-four (24) 9-liter cases of wine annually directly to a resident of [State] who is at least 21 years of age for such resident's personal use and not for resale.
2. Before sending any shipment to a resident of [State] the Wine Direct Shipper Licensee must first:
   (a) File an application with the Department of Alcoholic Beverage Control (Department),
   (b) pay a $100.00 registration fee,
   (c) provide to the Department a true copy of its current alcoholic beverage license issued in this or any other state, and
   (d) obtain from the Department a Wine Direct Shipper License.
3. All Wine Direct Shipper Licensees shall:
   (a) Not ship more than twenty-four (24) 9-liter cases of wine annually to any person for his personal use and not for resale.
   (b) Not ship to any address in an area identified by the Department as a "dry" or local option area.
   (c) Ensure that all containers of wine shipped directly to a resident in this state are conspicuously labeled with the words "CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY."
   (d) If located outside of this state, report to the Department annually the total amount of wine shipped into the state the preceding calendar year.
   (e) If located outside of this state, annually pay to the [State Revenue Agency] all sales taxes and excise taxes due on sales to residents of [State] in the preceding calendar year, the amount of such taxes to be calculated as if the sale were in [State] at the location where delivery is made.
   (f) If located within this state, provide the [State Revenue Agency] any additional information deemed necessary beyond that already required for retail sales from the winery tasting room to ensure compliance with this section.
   (g) Permit the Department or the [State Revenue Agency] to perform an audit of the Wine Direct Shipper Licensees records upon request.
   (h) Be deemed to have consented to the jurisdiction of the Department or any other state agency and the [State] courts concerning enforcement of this section and any related laws, rules or regulations.
4. The Wine Direct Shipper Licensee may annually renew its license with the Department by paying a $50.00 renewal fee and providing the Department a true copy of its current alcoholic beverage license issued in this or any other state.
5. The Department and the [State Revenue Agency] may promulgate rules and regulations to effectuate the purposes of this law.
6. The Department may enforce the requirements of this section by administrative proceedings to suspend or revoke an Wine Direct Shipper License, and the Department may accept payment of an offer in compromise in lieu of suspension, such payments to be determined by rule promulgated by the Department.
7. Shipments of wine direct to consumers in [State] from persons who do not possess a current Wine Direct Shipper License from the Department are prohibited, Any person who knowingly makes, participates in, transports, imports or receives such a shipment is guilty of a misdemeanor punishable by [insert fine and/or jail]. Without limitation on any punishment or remedy, criminal or civil, any person who knowingly makes, participates in, transports, imports or receives such a shipment commits an unfair trade practice.

IMPLEMENT THE TEN STEPS FOR WINERY SUPPORTERS

Winemakers, how can you get involved and help the cause? Review the following Checklist for Active Winery Supporters. It'll show you what can be done today to support all three prongs of our industry's campaign: PR, legislation and litigation.

In advance, thank you for investing in the ability of your consumers to purchase the wines they want, in the manner of their choosing.

1. Fundraising
   We need your commitment to an annual contribution so that we can focus on getting results rather than raising money. As you know, funding for Free the Grapes! goes exclusively to funding the PR and consumer outreach campaign that supports the overall effort.
   
   Donation Schedule:

In addition to consumer outreach and litigation, we hope you also recognize the importance of legislation. We urge you, therefore, to continue supporting (through your membership dues) our colleagues who are working on the legislative front: WineAmerica, Wine Institute, and Family Winemakers of California.

2. Send Free the Grapes! Your Consumer Database.
   We have more than 300,000 consumer supporters on our mailing list,  but we need to build it for all states, especially with emails. Please send Free the Grapes! your consumer mail list; it will remain confidential and will only be used for direct shipping mailings. We accept disks with data in Access, Excel or comma delimited formats.
   
   
3. Become a State Champion.
   Volunteer to adopt a state and become its champion. We need winery champions for every state. It might be your home state, where you went to school or where you have an active consumer base. As a champion, you maintain consumer enthusiasm and education for our cause; we provide the tools. When it comes time to rally the troops, you will contact them and encourage them to be active.
   
   
4. Become an Appellation Champion.
   Volunteer to rally fellow vintners in your appellation around our cause.
   
   
5. Register in the Legal States.
   Wineries now have the option to ship directly to many more states. Please take advantage of these new opportunities! Many non-legal states are looking at how well the permit process is working as a solution; if wineries aren't participating, they are not as motivated to enact positive legislation. The forms and information can be downloaded directly from www.wineinstitute.org, or by calling Wine Institute’s State Relations at (415) 356-7530.
   
   
6. Follow the Wine Industry Code of Direct Shipping Practices.
   Many groups including the Napa Valley Vintners, Wine Institute, WineAmerica, Family Winemakers of California and Coalition for Free Trade endorsed the Code. Fine-tune your direct shipping procedures by reviewing the Code and sharing this information with your club and tasting room manager.
   
   
7. Link Your Website to Freethegrapes.org.
   Provide a link on your website to our website so that consumers can sign up. Click here to learn how. Our website is in the top percentiles of the most linked-to websites on the Internet, thanks to wineries, retailers and other supporters. An educated consumer is our best ally.
   
   
8. Write a Letter to FedEx and UPS.
   Forward a letter to your FedEx and UPS sales representatives asking them to carry wines to all the newly legal states. In some instances, even though state laws have changed, the common carriers have not added legal states to their list of approved shipping states. Contact us for a sample letter. View a list of who ships where by visiting www.wineinstitute.org.
   
   
9. Put a Wine Institute Petition Book, and our brochures, in your tasting room. Petition books are free to Wine Institute members, $20 to non-members. Call Wine Institute’s State Relations department at (415) 356-7530 to order. Contact us for a Free the Grapes! brochure order form.
   
   
10. Sign-up for our Monthly Email Newsletter.
    Stay informed! Sign-up and we'll send you a periodic update of news.

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LINK TO FREE THE GRAPES! WEBSITE

It's easy to add a link to Free the Grapes! to your site, either as a text link, or using an image of Shackles, our mascot and logo (below). Links to our site help us make more wine lovers aware of our crusade.

Here's how.

PC users: To put Shackles or any other Free The Grapes! image on your web page, point your mouse arrow to the image of your choice. Right click and choose the "Copy" command. Then go to wherever it is that you put together your web page (whether it's software or an online website builder). Point your mouse arrow to where you want to put your Free The Grapes! image. Right click and choose "Paste." Don't forget to add a link to www.freethegrapes.org.

Mac users: We figure you already know how to do this. If you don't, drop us an email, and we'll help you out.

Please let us know when your link is live! Email Free the Grapes! at fedup@freethegrapes.org