Arizona’s wine list grows - East Valley Tribune: Get Out

Arizona’s wine list grows

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Posted: Wednesday, September 17, 2003 10:19 am | Updated: 2:12 pm, Thu Oct 6, 2011.

Rich Petrus travels from his Scottsdale home to the Napa and Sonoma, Calif., wine regions "probably three to four times a year," he says.

He tastes some great wines while there that he can’t always find in Arizona, but the problem has been getting them back home to store in his 500-bottle cellar.

"Previously, I could put a case underneath the plane and carry half a case on board," he said. "I was always limited to what I could carry back and was counting my bottles."

When Petrus travels to Napa next month, though, he will be able to stock up. Starting Thursday, an Arizona law goes into effect allowing wine lovers to ship home up to two cases of wine per winery, per year when they visit wineries either out-of-state or in Arizona.

"It’s going to open up a lot of opportunities for people who enjoy wine," Petrus said.

The law, sponsored by Sen. Barbara Leff, R-Paradise Valley, is geared toward individual consumers who cannot buy certain wines in Arizona.

This can occur for several reasons: Either the wineries make so few bottles that it’s not that profitable for a distributor to represent them, or because a winery chooses not to sell it wholesale. Many wineries have "reserve" bottles or other small batches that they sell to customers only at the tasting room or to wine club members who live in states that can receive direct shipments. Also, wine selections are often limited in outlying areas of the state.

Under previous law, individuals weren’t allowed to transport wine or spirits over state lines at all. Historically, the 21st Amendment to the U.S. Constitution — which repealed Prohibition — gave power to the states to regulate alcohol sales. In Arizona, as in many states, government set up a three-tier distribution system to license wholesalers and retailers. This meant a winery, brewery or spirits producer anywhere in the country could sell only to a wholesaler in Arizona, which then resold it to an in-state retailer. Individuals couldn’t buy alcohol directly from producers.

Many store owners aren’t concerned that the new law will hurt sales. "The guy that goes up there two, three, four times a year — they’re hardcore wine lovers and they’re going to be in my store anyway," said Brian Mahoney, owner of House Wines and Cheese in Scottsdale.

Richard Betts, buyer for AZ Wine Co. in Scottsdale and Carefree, said, "I think anything that makes it easier for people to access wines and enjoy wines on a regular basis is a good thing."

Still, many in the business were initially opposed to a direct shipment law. Leff originally wanted the bill to allow wineries to ship directly to consumers through phone and Internet orders as well, but it received heavy opposition from lobbyists for wine distributors and retailers. She decided to back off because the issue is getting national attention and she said the U.S. Supreme Court will eventually hear arguments about it.

Steve Duffy, a lobbyist for the Arizona Licensed Beverage Association, said that allowing people without liquor licenses to order wine compromises the law and puts Arizona businesses at a competitive disadvantage. Someone in California shipping to a customer in Arizona could ship to an underage drinker and there’s no way to enforce it, he said.

Consumer advocacy groups such as Free the Grapes, however, claim this is a red herring.

"Government officials have gone on record that underage access is not and has not been a problem in legal shipping states," according to their Web site, www.

Another issue is taxation. Bob Smith, president of Alliance Beverage, the largest wine and spirits distributor in Arizona, said Arizona collects at least $52 million annually in luxury taxes from wine and spirits. If those weren’t collected, he said, "There’s an economic piece that the state would be missing out on."

But in the 26 states where direct shipment is allowed, states have not seen a big dent in their coffers, said Jeremy Benson, executive director of Free the Grapes. Some do insist that out-of-state wineries add state taxes to where they’re shipping. However, less than 1 percent of wine sales in those states is direct shipped, Benson said.

That’s because most aficionados never buy wines at tasting rooms that they can get at home. Wineries charge full retail price at the tasting rooms, and then it’s pricey for shipping — it can cost around $25 a case for ground delivery and $100 a case for overnight.

In addition, it’s risky to ship wine because high temperatures en route can spoil it. Also, if you’re not home to sign for it and verify you’re over 21, the wine will be returned to an unrefrigerated warehouse and could be vinegar by the time you pick it up.

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