Wine Time

Texas Lawmaker Files Bill to Lift "Ridiculously Anti-Competitive" Ban on Out-of-State Wine Sales

Photo by Jeremy Parzen.
Texas lawmaker Matt Rinaldi who represents District 115 in Dallas County. Rinaldi calls the current ban on out-of-state sales of wines to Texans "anti-competitive" and a violation of "the rights of anyone who values the free market."
Last week, in a move that took wine industry observers by surprise, Texas state lawmaker Matt Rinaldi, a Republican from Dallas County, filed a bill that would lift a long-standing ban prohibiting out-of-state retailers from shipping wines to consumers here.

Currently, it is illegal for an out-of-state wine shop to sell and ship wines to Texans. In other words, if you live in Texas, you cannot call or email a wine shop in New York or San Francisco and ask the merchant to sell and ship you its products. If Rinaldi's bill were to be approved by the Texas legislature, it would mark a historic break from a restrictive policy that regulates how Texans buy their wines.

The bill is expected to face stiff opposition by the Texas beer, wine, and spirits wholesaler and retailer lobbies. As wine industry blogger and wine trade veteran Tom Wark wrote on his site last week, it is "the kind of legislation that Texas wholesalers and most Texas alcohol beverage retailers will oppose with their last dying breath."

Yesterday, a reporter for the Houston Press sat down with Representative Rinaldi in his office in the state capitol and asked about what inspired him to file the bill.

The ban, said Rinaldi, "is ridiculously anti-competitive… It is protectionist and it violates the rights of anyone who values the free market."

Rinaldi proposed the bill after receiving "a communication from a constituent who was a wine enthusiast. He couldn't purchase wine anymore from the seller of his choice."

According to the Republican lawmaker, the Dallas County resident had been informed by New Jersey-based online wine merchant Wines 'Til Sold Out that it had been "shut off" by the Texas Alcoholic Beverage Commission.

"I was responding to a need in my district," said Rinaldi. As Texans, he told the Houston Press, "we value our freedom first and foremost. Government shouldn't be interfering with that. [Texans] should be given the freedom to do what makes them happy as long as it doesn't interfere with the rights of anyone else."

When asked if the current ban runs counter to Republican values, Rinaldi noted that "because [Texas] is a red state, people assume that 'everything is going okay.'" In fact, he said, "many times, our elected officials are not leading the way in protecting our freedom. We have to hold our elected officials accountable."

Industry observers agree that, if approved, Rinaldi's bill would radically reshape the Texas wine wholesale and retail landscape. Rules regulating the out-of-state sales of beer and spirits would also be affected. If the bill passes, it could also have wide-reaching impact on the way wine, beer, and spirits are sold and shipped in the U.S.

"Currently, wine retailers and stores are explicitly allowed to ship to only 14 states and the District of Columbia," wrote Wark on his blog last week. "Retailer shipping has found its way into a number of direct shipping bills over the years, but most often wholesalers object to retailers being included in bills that allow out-of-state wineries to ship."

Passage of the bill "is going to be a heavy lift," said Rinaldi, noting that he is expecting "a bunch of heat from Texas wholesalers."

"Sometimes it takes two or multiple sessions" to get a bill like this passed, he told the Houston Press.

"I hope it will be finished this session. But if it's not, we will continue to fight for it as long it takes to get it passed."

For some background on the current ban, see this post on the Texas Alcoholic Beverage Commission website. See a summary and the complete text of the bill here.