Proposed Bill Would Let Wineries Ship Directly to Garden State Customers

Annie Knox | January 6, 2012 | More Issues
Opponents argue that direct-ship measure would cost New Jersey jobs and tax revenue

New Jersey residents are one step closer to being able to buy wine directly from Garden State vineyards and have it legally shipped to their doorsteps.

An Assembly panel gave the go-ahead Thursday for a bill permitting small wineries — those producing less than 250,000 gallons a year — both in and out of state to ship wine to New Jersey residents. It would also allow in-state wineries to sell to the public directly from their vineyards and shops.

If passed by both houses and signed by the governor, the bill (A-4436) would make New Jersey one of 38 states that allows direct shipping of wine to residents, a list that includes New York but not Pennsylvania, according to the Wine Institute, a lobbying group for California wines. Previous versions of the bill have been in the works since 2008.

“This isn’t an experiment,” Assembly Budget Committee Chairman Lou Greenwald (D-Camden) said at a hearing Thursday. “This isn’t a new concept.”

Proponents of the bill say it will foster a new crop of wineries that will draw visitors from in and out of state, bolstering New Jersey’s agro-tourism industry. But some liquor store owners and union representatives say the bill has grim implications, warning of fewer jobs and less state tax revenue.

“It’s a gut fear,” said Sunny Patel, vice president of the New Jersey Liquor Store Alliance and owner of Sunny’s Liquors in Passaic. If wine buyers could legally have wine shipped from West coast wineries, he said, he’d no longer see them in his store.

“Little by little, it’s going to hurt our business,” Patel said. “Come five or six years from now, I won’t have anything that’s valuable. It’s going to be demolished.”

The direct-ship bill would enable out-of-state wineries to skirt New Jersey sales taxes, said Jeff Warsh, who represents the NJ Wine and Spirits Wholesalers Association and the NJ Licensed Beverage Association. With the bill in place, Warsh said, “the excise tax is gone.”

Vincent Fyfe is the president of the United Food and Commercial Workers. He represents about 3,000 salespeople working on commission to sell wine to retail stores statewide. His argument against the direct-ship bill is that it would bypass the wholesale system, reducing commissions and eventually doing away with jobs.

“It ain’t going to help more people,” Fyfe said. “It’s only going to hurt them. When has anyone said, ‘I want to sit down for a nice Jersey Bordeaux?'”

Backers of the bill hope that in a few years wine buyers will be saying exactly that. New Jersey’s budding wineries, they say, already attract tourists from in and out of state who visit, eat and shop.
Converting farmland into vineyards is a way for families to maintain the New Jersey farming tradition and protect the environment, said Mark Carduner of Silver Decoy Vineyards in East Windsor, which has operated for 11 years.

If the bill were defeated, Carduner said, Silver Decoy feared that a federal ruling would require wineries to close their tasting rooms, putting Silver Decoy and other fledgling wineries out of business.

The bill would also permit wineries to open storefronts, a venture that would let Silver Decoy’s founders seriously consider quitting their day jobs to operate the winery full time, commented Carduner.

“We’re very much getting off the ground,” Carduner said. “We all have everything in that bill.”

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