State Law Mashing Wineries

Oklahoma wineries are being mashed by a state law.
And that same law is hampering the development of a spin-off industry — agri-business.
Key to the development of both is allowing the fledgling Oklahoma wine industry to use interstate and intrastate shipping.
As wineries become known for their product, tourists will visit the area, sampling various wines and taking some home. Those first bottles could result in additional sales — and tax revenues for state coffers.
Those tourists could provide a growth market for agri-tourism, especially in rural areas that are hard-hit by a weak economy.
Oklahoma’s law prohibiting shipments of wine, either interstate or intrastate, is so restrictive that it cannot be shipped to family members.
That also means that agri-business through tourism is not starting in rural areas — Big Cabin, Stroud, Sparks, Chandler, New Yucca and other parts of Oklahoma — where many vineyards and wineries are being started.
Teresa Meinders Burkett, an attorney with the Boone Smith Davis Hurst & Dickman law firm, said many rural communities that enjoyed prosperity during the oil boom in the late 1970s and early 1980s, are suffering economically and people are leaving those areas.
‘‘I am not a spokesperson for the grape growers and vineyard industry,’’ she said. ‘‘But I do have contact and help some vineyard operators and wine makers in northeast Oklahoma.’’
The reality is that some vineyards are hard to reach. If someone was attending a festival in Lawton and found a local wine they liked, they could purchase the product available at the festival.
But if that wine is produced from a vineyard in a remote area even 50 miles away, chances are the person would not drive to that site to purchase more wine. If that winery were able to ship their product, their sales volume would increase — and appropriate state taxes would be collected.
Similarly, if a person knew a particular wine came from a small town, they might be inclined to visit if they were traveling through that part of the state.
Vineyards would enable farmers to further diversify and ‘‘from what I have read, profit margins on grapes exceed many of the traditional state crops,’’ Burkett said. ‘‘I have a cousin in Iowa who grows grapes to supplement his university salary.’’
Burkett became interested in the wine industry when she was ‘‘kicked out’’ of a wine club.
‘‘I was visiting the area with some friends who remarked that I was from Oklahoma,’’ she said. ‘‘My name was removed immediately and I no longer received any wine through the club.’’
That was when Burkett first encountered Oklahoma law and the shipping prohibitions.
The U.S. Supreme Court then combined shipping rules from Michigan and Texas. That decision was since intrastate shipping was allowed, interstate shipping also had to be permitted.
Since Oklahoma didn’t have a law about shipping wine, the high court ruling didn’t apply.
‘‘I was a member of the Leadership Oklahoma class two years ago and had the opportunity to travel the state,’’ she said. ‘‘I had the opportunity to visit with people in rural areas and many expressed an interest in growing grapes in the state.’’
Texas, which has had successful vineyards for at least 20 years, has similar weather and soil conditions as found in Oklahoma, Burkett said. But to reach that level, there has to be a start. It takes time for a vineyard to mature and it would be several years, if not a decade before vines would be mature enough to produce a grape that would make quality wine.
Oklahoma could have a similar industry if there was an opportunity.
Wineries are another way to attract people to rural communities and have the visitors enjoy their product, Burkett said. It would be nice to be able to order a favorite wine from a distant winery either in Oklahoma or in another state.
When the U.S. Supreme Court heard the arguments on shipping wine, a concern expressed was that underage drinking would increase.
But the high court found during its evaluation that shipping wine would not be a factor in the underage drinking argument.
It generally takes more than a week to receive a shipment of wine, she said. Young people don’t want to wait that long. It is far easier and quicker for them to get someone who is of legal age to buy liquor or beer for them.
In addition, when wine is ordered, it must be paid for by credit card. Then an adult is required to sign for it when the shipment is received.
There is no model state law allowing the shipment of wines either intrastate or interstate, Burkett said. The issue has been raised by various groups and ruled as being too controversial.
Yet, if the laws are properly written, they could provide additional income to the state when the wine is shipped from out-of-state locations. Only two cases now can be shipped to individuals. Wineries could be required to collect all taxes assessed by each state.
Discussions have been held about wine being sold in grocery stores, Burkett said. Even if this happens, the small producer would be hard pressed to make contact with a large number of stores to get their product on the shelves.
If it were possible to get a wine shipping law passed, the far-reaching impact could be to help improve the quality of life in Oklahoma, especially the rural parts of the state because of an increase in tourism. The important thing to realize is that it wouldn’t cost any money and the result eventually could be a revenue producer.



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