N.J. opens to direct wine shipping

Governor signs bill, opening shipment and allowing more wineries

New Jersey Gov. Chris Christie delivers the State of the State Address in the Assembly Chamber at the Statehouse in Trenton, N.J., this morning, the same day he signed a bill opening the state to direct shipping from wineries.

Trenton, N.J.—This morning, Jan. 17, Gov. Chris Christie signed legislation that finally resolves the issue of direct-to-consumer wine shipping in New Jersey. The new law revises previous statutes that governed the sale and distribution of wine by New Jersey wineries and creates a new out-of-state winery license in New Jersey for wineries licensed in other states.

Until today, New Jersey wineries were permitted to have satellite tasting rooms where customers could taste the wine and then make purchases, but state legislation denied that right to out-of-state wineries. No winery, in state or out-of-state, could ship wine directly to consumers in New Jersey. After out-of-state wineries sued, the U.S. Court of Appeals for the Third Circuit ruled that the state of New Jersey was in violation of the Constitution’s Commerce Clause and was discriminating against out-of-state wineries by allowing only New Jersey wineries to have satellite tasting rooms.

Gary Pavlis, cooperative extension agent at the Rutgers New Jersey Agricultural Experiment Station, noted that no new winery licenses have been issued in the state in the past year and a half. He told Wines & Vines, “I think we may have a mini-explosion of growth in wineries in this state. This legislation is a big plus for the little guys, and for agriculture.”

Faced with the prospect that New Jersey wineries could potentially lose their ability to sell directly to the public in their own tasting rooms, state Senate president Stephen Sweeney introduced legislation that allowed for direct shipping of wine to residents by wineries producing 250,000 gallons or less (around 100,000 cases), and for wineries to open satellite tasting rooms in New Jersey.

The new law, passed by the state senate Dec.15 and by the Assembly Jan. 9, allows plenary wineries producing 250,000 gallons of wine or less per year and farm wineries to sell wine to licensed retailers after they pay a permit fee. That fee would range from $100 to $1,000 for plenary wineries, based on their annual production, while farm wineries would pay a fee of $100.

Plenary wineries producing no more than 250,000 gallons per year and farm wineries are each permitted to sell wine at retail in 18 sales rooms, but a provision in the previous law that allowed for joint sales rooms with other plenary or farm wineries has been eliminated. Plenary wineries producing 250,000 gallons of wine per year or less and farm wineries are permitted under the new law to ship up to 12 cases of wine directly to any one over age 21 in New Jersey or any other state for personal consumption and not for resale. A case of wine is defined as being 9 liters or less, and the winery must retain the original invoice for any wine shipment for at least three years on the winery premises.

In addition, the legislation establishes an out-of-state winery license for wineries licensed in another state and producing a maximum of 250,000 gallons per year. The winery would then be allowed to sell wine at retail in 19 sales rooms in New Jersey, for consumption on or off the premises, for a fee of $250 for each sales room. Out-of-state licensees would also be permitted to sell to wholesalers and retailers in New Jersey.

Steve Gross, state relations director at California’s Wine Institute, told Wines & Vines today that he is pleased that the bill passed, although he remains disappointed with the 250,000-gallon limit, which will prohibit shipments from the largest wineries.

“New Jersey has been in everybody’s crosshairs for a long time,” he acknowledged. “We’ve worked there (to change the law) for a long time.”

Gross said that the $938 annual fee for wine shipments to New Jersey is high, but he added that until today, “It was the first or second largest unopened market for direct shipping, and one of the last big states. We’re delighted it passed.” According to Gross, the new regulations mean that close to 90% of U.S. consumers may soon be able to receive direct wine shipments.