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Texas Wine and Grape Growers Association

What makes a Texas wine?

Texas grapes, obviously. Or maybe not so obviously.

Rep. Jason Isaac

Chris Brundrett sat in a barn surrounded by barrels of wine he helped curate and swirled a glass of water in his hand, perhaps imagining it was something else.

Brundrett, accompanied by others from the state’s wine industry, drove home his pitch: “If we can just pump out wine from California and slap a picture of the Alamo or a longhorn on it and sell it,” he said, should wineries be able to put a “made in Texas” label on it?

A co-owner and winemaker at William Chris Vineyards between Fredericksburg and Johnson City, Brundrett was explaining why he backed House Bill 1514 by state Rep. Jason Isaac, R-Dripping Springs, which would require that wines with a Texas label be made only with Texas-grown grapes.

Under federal law, wine can have an appellation of origin from a state if a minimum 75 percent of its grapes are grown in that state. The other 25 percent can come from anywhere.

“I believe having something labeled as Texas should be from Texas,” Isaac told the Tribune, adding that his bill would encourage more Texas grape production.

Last year Texas produced about 3.8 million gallons of wine, according to the Texas Alcoholic Beverage Commission, and the state had more than 400 active permits to bottle, produce and sell wine. A separate study in 2015 found the wine industry contributed more than $2 billion to the state’s economy.

Grape growers and vineyard owners are scattered on the labeling issue. Paul Bonarrigo, co-owner of Messina Hof Winery, the state’s third-largest wine producer in 2016, said he was opposed to the measure, and the Texas Wine and Grape Growers Association said they don’t back Isaac’s bill, either.

[…]

Back at the Capitol, Isaac said that while 100 percent Texas wine was the goal, some in the industry contend that it might be too challenging to use only Texas grapes by September when the bill would go into effect if passed.

Isaac said he would look into offering an amended version of HB 1514 that would phase in the change, with benchmarks at 80 or 90 percent before requiring 100 percent Texas grapes. Isaac also said his bill would allow the Texas Department of Agriculture to allow exceptions to the threshold if severe weather or drought damaged state grape crops.

I don’t have any particular objection to this bill, though I think the federal 75/25 standard is perfectly adequate. Surely there’s some value in giving the wineries a bit of slack in a bad year. As long as there is a standard that everyone can accept and it is fairly enforced, I’m okay with whatever.

Put that wine bottle down and slowly back away

Don’t buy wine over the Internet, kids. The State of Texas says so.

State officials have teamed up with FedEx, UPS and other shippers to ferret out wines being sent to Texas by websites that don’t have proper permits.

That has prompted Wine.com and several other resellers to restrict sales to consumers in the Lone Star State.

Wine.com has 30,000 active customers statewide, CEO Rich Bergsund told the American-Statesman on Thursday. Those customers were notified via email this month that the company had halted shipments of wine to Texas.

Other sites not currently shipping wine to Texas include TheWineBuyer.com, WineBid.com, WineExpress.com and WineLibrary.com.

A law blocking the deliveries isn’t new, but the Texas Alcoholic Beverage Commission has ratcheted up enforcement efforts this year.

“Anybody who is going to sell to Texans has to have a permit,” TABC spokeswoman Carolyn Beck said.

And, right now, Beck said, there’s no law enabling out-of-state resellers to obtain permits allowing them to sell wine here. “They haven’t been authorized by the Legislature,” she said.

Nasty little conundrum there, isn’t it? You need to get a permit to sell wine in Texas, but there’s no law that allows an out-of-state retailer to get such a permit. Thus are crackdowns like this born. There is one potential workaround for businesses like Wine.com, but it’s at best a partial solution:

In its message to customers, Wine.com indicated it was working to set up a warehouse in Houston in hopes of securing a state permit. A lease could be signed soon, Bergsund said.

“We are hoping the state government will see this as a win-win,” the company wrote in its email, “because we will bring valuable jobs into Texas, but there are no guarantees.”

A question-and-answer section on Wine.com indicates the company has used a similar approach in other states with similar restrictions.

“We’ve opened a network of Wine.com warehouses in a number of states, giving us a local presence in those states. This enables us to legally ship wine to our customers in those states while also reducing the shipping time to get you your wine. Unfortunately, in some states not even that will suffice, so keep those letters and emails flowing to your state legislators!”

Beck said Wine.com would only be able to ship to residents of Houston, Harris County and areas within a two-mile radius of Houston’s city limits if its proposed warehouse materializes.

Given that Texas wineries can sell and ship to any customers within Texas, one presumes that Wine.com would either have to open a storefront or start growing grapes here to qualify.

Unlike many industries, online wine sales are a minimal share of the total – about one percent, according to the story, though the potential for growth is there. It’s never going to be a dominant force, but that’s not stopping state regulators here and elsewhere from intervening. It’s hard to see this as anything but an anti-competitive move, one that like the byzantine restrictions we have on selling beer in this state will do nothing for the consumers. From my perspective, as long as the Internet retailers pay the same taxes as the brick and mortar folks, it’s all good. And speaking of such things, let me give the last word to the Austin Contrarian, from whom I saw this story:

Thankfully, Texas booksellers didn’t have the political clout wielded by wine merchants and wholesalers when Amazon was getting off the ground back in the 1990s, else the State would have banned buying books off the internet, too.

Good thing there isn’t a state agency equivalent to the TABC for books.