March 17, 1998 5:00 PM PST

Bill seeks to free Net wine sales

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Virtual wineries will be able to boost their shipments to Florida residents from 24 to 576 bottles per year, if a new bill is passed. But critics want to know who will "card" buyers when the goods are delivered.

The debate raging in Florida highlights Internet-wide concerns about two issues: minors' access to the Net and how to tax e-commerce transactions.

For instance, local officials complain that they can't collect sales tax revenue from online shops based outside their jurisdictions--including wine-selling sites.

Child advocates, on the other hand, charge that wine and other alcohol sites can't adequately check buyers' identification, opening the floodgate to underage consumers who want to buy alcohol.

The alcohol industry is gaining ground in its quest to market to out-of-state consumers and prosper from online sales, however.

Florida limits the amount of wine sent to its residents from any other state. Wine-selling Web sites have encouraged Florida residents to complain:

"If you resent your state controlling your drinking privileges and your ability to receive limited-quantity wine only available outside your state, please email your governor at the address listed below, and tell them how you feel," states the California Wine Club Web site.

Apparently bowing to the powerful California wine industry, Florida state Senator Katherine Harris's legislation not only increases the number of bottles that can be sent to residents, but it also changes violation of the law from a felony offense to a misdemeanor. Those who get caught shipping to minors will still face a felony charge, however.

A similar bill will be introduced in the grapevine state. California state Senator Mike Thompson of Napa Valley is developing legislation to let licensed out-of-state beer, wine, and hard-liquor sellers ship directly to consumers in California. The proposal is expected to lay out a system for remitting sales tax to California as well as criminal provisions for selling to minors.

"The ultimate goal is to set an example for other states," said Vivienne Nishimura, executive director of the Coalition for Free Trade in Licensed Beverages. "Obviously, there are wineries and breweries in California, so it would be good business for everyone. Other states could honor our laws and we will honor theirs."

Small wineries and online vendors applaud the efforts of both state senators. The American Vintners Association also is lobbying for federal legislation to lighten restrictions on shipping, according to sources.

"We're a strong supporter of the Florida bill," said Paul Kronenberg, a spokesman for the Family Winemakers of California .

"We represent many small wineries here in California that have difficulty in direct shipping to states [where there are] people that are interested in buying their wine. Where it's prohibited in states--particularly in Florida, where it's a felony--that really becomes a marketplace issue for wineries here that aren't big enough perhaps to have a big presence and can only market through word of mouth."

But foes of such laws say there is no guarantee that delivery companies or Web sites will make sure the recipients of online or mail orders are old enough to buy alcohol. New York Attorney General Dennis Vacco, for example, is working to stop Net alcohol sales.

The Americans for Responsible Alcohol Access (ARAA) in Florida will fight Harris's bill, which was submitted yesterday.

"We think the law should stay the way it is," said Barry McCahill, executive director of ARAA.

"Once you ship any quantity of alcohol to the doorstep, it's out of control, can't be tracked, and is based on the honor system," he added. "We should not provide another way to make it easier for kids to get alcohol at a time when alcohol-related fatalities among teenagers are up 5 percent nationwide."

California wineries lobbied for the bill, he said, because they stand to make a lot of money by directly shipping to customers who order via the Net or catalogs. "This isn't 'Wine of the Month Club,' it's a million-dollar business," he said.

But the ARAA is not opposed to selling wine or alcohol over the Net. Instead, the organization wants the orders shipped to licensed retailers in the state so that a consumer's ID can be checked when they pick up their package.

The Coalition for Free Trade in Licensed Beverages counters that such a system won't change anything. "If you look at the statistics for where minors receive alcohol, it's usually at the corner store. So who is to say these retailers will do a better job?" Nishimura said.

As for Harris, there are lingering questions as to why a Florida lawmaker is catering to California winemakers. Her staff insists it's just good business.

"The results of last year's bill seems to have been to hurt a large number of small and medium-sized businesses at the expenses of a powerful few," said Harris's spokesman, Benjamin McKay.

"[California vineyards] have been in contact with us, and us with them. We look at this from the point of what do the citizens gain--they gain access to wine that they wouldn't otherwise be able to get at their local wine shop," he added.

 

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