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Forget Grocery Stores, Pennsylvania’s Serious Wine Drinkers Are Buying Online

Buying Christmas presents is going to be a lot easier for Antoinette Palmieri this year.

The South Side Slopes resident and sommelier is one of many wine enthusiasts across the commonwealth celebrating the state legislature’s recent decision to remove cumbersome regulations for out-of-state wineries who want to ship to Pennsylvania consumers.

She said she loves to give wine as gifts, but Pennsylvania’s law meant she had to find a workaround in order to get her hands on smaller labels that aren’t sold in state liquor stores.

“I have an aunt and uncle that live in Virginia, and I would have to get it shipped to them, and then I would have to go visit them to pick it up,” she said.

Wine being sold in grocery stores is getting the lion’s share of attention in Pennsylvania, but for serious wine enthusiasts like Palmieri, the direct-shipping change is a much bigger deal.

“It’s a huge deal,” said Terri Beirne, Eastern counsel for Wine Institute, an advocacy group which represents more than 1,000 California wineries.

The U.S. Supreme Court ruled in May 2005 that states can’t prevent out-of-state wineries from shipping wine directly to consumers. By November 2005, Pennsylvania's law doing just that was challenged in court. Rather than open things up, state government made it extra difficult, but not impossible, for out-of-state wineries to ship their goods to Pennsylvania consumers. 

Credit ShipCompliant
This graphic by ShipCompliant, which provides software tools and support to businesses in the alcohol industry, shows wine growth in various sectors last year.

Beirne said before the recent change, out-of-state wineries had to comply with the exact same rules that Pennsylvania wineries had to in order to ship direct to consumers in the commonwealth.

“My California wineries that I represent have to report all kinds of information to the state of California. Some of it proprietary, a lot of it tax stuff, there’s a lot of in-state reporting that’s required of all wineries,” she said. “It was too burdensome for out-of-state wineries to try to comply with the laws of both their home states … as well as Pennsylvania.”

As a result, Beirne said, only 12 out-of-state wineries were actively selling in Pennsylvania, which some say was good for Pennsylvania wineries.

“Previous laws kind of protected the Pennsylvania wineries from outside competition,” said Scott Neeley, owner and operator of KingView Mead in Pittsburgh.

But for wine consumers like Palmieri, it was frustrating. Beirne said without direct shipping, it would be nearly impossible for consumers to try wine from a small winery without visiting it in person.

“There are a lot of wineries that build their brands on this direct-to-consumer channel, and then they get big enough to actually start selling their products through wholesale channels, which means they would sell it to the wholesaler who would put it into the retail market,” Beirne said.

Credit ShipCompliant
A graph show growth in the wine industry from 2010-15.

  According to the 2016 annual report from Ship Compliant, a company that makes software for wineries, very small wineries saw their fifth straight year of direct shipping growth in 2016, with a 13 percent total increase in value. In total, 4.29 million cases shipped last year, an 8.5 percent increase in volume.

A list on the Pennsylvania Liquor Control Board website shows that 25 of 48 wineries that have obtained licenses to direct ship are from out of state.

The new law allows consumers to purchase up to 36 cases of wine for direct shipping each year. Pennsylvania is the 43rd state to allow direct shipping of wine to consumers.