Massachusetts Levels the Playing Field for Direct Wine Shippers – Some May Need to Change Their Business Model

Hospitality, Alcohol & Leisure Blog Aug 21, 2024

By: Jaci Flug, Esq., and Louis J. Terminello, Esq.

A grand total of 1,416 wineries hold direct wine shipping permits from the Commonwealth of Massachusetts. In 2023, sales into the Commonwealth via direct wine shipping permits were valued at over $70 million. However, nearly 40% of the sales were made by 20 permit holders, and not all the wine sold via those permits was produced by them.

The Massachusetts Liquor Control Act limits the wine a Massachusetts winery may sell at retail to “any wine or winery product produced by or for the winery and sold under the brand name…”. Other states allow wineries to purchase wholesale wine they did not produce and sell it at retail. For example, both New York and Florida allow Farm Winery licenses to buy and sell wine produced by other in-state Farm Wineries.

In sum, multiple states enable wineries to act as retailers, buying wine at wholesale and reselling it at retail. This discrepancy created an unlevel playing field, putting Massachusetts wineries at a disadvantage. The Massachusetts legislature has acted to level the playing field.

Section 19F of Chapter 138 of the General Laws now defines the term “brand name” to “include any wine exclusively produced by or for the winery and marketed under a different label owned by or registered to the winery”. It prohibits any sale or delivery into the Commonwealth by a direct wine shipper that is not “wine or wine product produced for or by the winery and sold under the winery’s brand name.”

In short, the law was amended to prohibit direct wine shippers from selling and delivering into the Commonwealth wines that they do not produce but buy wholesale.

Based on the numbers above, this is clearly game-changing legislation. Those who fail to comply with the new law place their Massachusetts direct wine shipping permit at risk.

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Massachusetts Levels the Playing Field for Direct Wine Shippers – Some May Need to Change Their Business Model

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