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BOSTON — Package store owners are urging Gov. Maura Healey to close a “loophole” in a 2015 law authorizing direct shipments of wine, which critics say is allowing “ghost” retailers to engage in “modern-day bootlegging.”
In a letter to Healey, Massachusetts Package Store Association Executive Director Rob Mellion called on her to sign into a law a bill that limits licenses for direct wine shipments only to companies that sell under a brand name owned or exclusively licensed to the winery.
The measure was approved by the state Legislature last week before lawmakers recessed after formal sessions ended.
Third-party retailers are engaging in “modern day bootlegging” by exploiting a loophole in the law that allows them to get licenses to ship directly to consumers, Mellion said.
“They operate outside of the regulatory framework by means of an unintended loophole that has inadvertently allowed for a technical mechanism to obtain a license when they masquerade as a winery,” he wrote. “This misrepresentation is costing Massachusetts millions of dollars annually in unreported sales and lost excise taxes. It also substantially increases the risk of underage access to alcohol beverages.”
Mellion cited data from the state Alcoholic Beverages Control Commission showing compliance checks conducted in 2022 by state regulators found 96% of out-of-state shippers of alcohol beverages didn’t verify the age of consumers buying the booze.
In 2014, Massachusetts joined 40 other states in legalizing winery direct-to-consumer shipping after then-Gov. Deval Patrick signed a budget package that included language legalizing direct shipping in the state. The law went into effect on Jan. 1, 2015.
That law was prompted in part by a 2008 federal court ruling that struck down a previous limit on direct-to-consumer sales. Out-of-state wineries — led by former Patriot quarterback star Drew Bledsoe, who owns a vineyard in Washington — argued that the restriction gave wine-sellers in Massachusetts an unfair competitive advantage.
Out-of-state wineries and alcohol distributors are required to get permits for $300, allowing them to ship up to 12 cases a year to each customer in Massachusetts. They must label packages as containing alcohol and indicate that they must be delivered to someone of legal drinking age. Massachusetts taxes must be applied to the sale, as well.
But Mellion said the new law would ensure that wine shipments to Massachusetts residents would come direct from the licensed winery. He said retailers have lobbied to defeat the measure.
“It has been very hard to stop these large and extremely well-financed corporate interests who use their influence to undermine three-tier regulations,” he wrote. “That is why it has taken three consecutive legislative sessions to stop the bootlegging.”
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com
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By Christian M. Wade | Statehouse Reporter
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