Texas cracks down on wine shipping

Texas has, for years, had a law on the books banning ordering wine from any out-of-state location. But, showing some common sense in favor of consumer freedom of choice, it has been operating under a 2001 court-orderd injunction not to enforce the law because of questions about its constitutionality.

That, apparently, has changed. The Texas Alcoholic Beverage Commission has been sending out cease-and-desist notices to out-of-state retailers that "were shipping the wine in illegally," according to TABC spokeswoman Carolyn Beck.

The state legislature passed Senate Bill 877 last May, allowing out-of-state wineries to ship wine directly to Texas consumers, but prohibits out-of-state retailers from doing the same thing.

The notices have prompted several members of the Sacramento, CA-based Specialty Wine Retailers Association and three Texas wine consumers to file suit against TABC Administrator Alan Steen. They allege the TABC action violates the U.S. Constitution's commerce clause.

"They basically invited this particular lawsuit by sending out these cease-and-desist orders," says John Hinman, a partner with Hinman & Carmichael LLP in San Francisco and general counsel of the Specialty Wine Retailers Association.

Of course, not all wine retailers are opposed to the TABC stance.

Jim Cubberley, manager of Austin fine wine merchant Lake Travis Wine Trader, told the Austin Business Journal that out-of-state wine retailers have been making sales without adhering to the same regulations he must contend with, such as those that require working through Texas' three-tier system of wine importers, wholesalers and retailers. That system adds about 20 percent more to the cost of his wine, as compared to the products sold by out-of-state wine shops, he says.

"People are able to sidestep the local retailers such as us by purchasing things that we cannot purchase," Cubberley told the Journal. "It's hard to be competitive with the extra hoop that we have to jump through."

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