Pennsylvania's wine shipping laws unenforceable

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The November 2007 issue of Zachys wine auction magazine offered a special treat for wine lovers -- selections from the wine cellar of Philadelphia-area industrialist and "gastronomy legend" Norman Cohn.

The collection, comprising thousands of bottles, featured historic Bordeaux, Burgundy and champagnes, as well as Italian and Californian wines. Six magnums of Chateau Mouton Rothschild 1996 were priced at $2,600 to $4,000 per lot. A dozen bottles of Chateau Petrus 1990, in the original wooden case, listed at $26,000 to $42,000 per lot.

"The vast majority of the wine has come from either select auctions, on release from top merchants or directly from producers themselves," stated liner notes in the magazine. Among those invited to preview the auction in New York was Patrick J. Stapleton III, chairman of the Pennsylvania Liquor Control Board. He did not attend.

Mr. Stapleton acknowledged a few weeks later that it is "highly unlikely" that Mr. Cohn's impressive collection ever went through Pennsylvania's state store system, as required by law -- a law that, as of three years ago, is unenforceable.

"I don't know where Mr. Cohn got them," Mr. Stapleton said; Mr. Cohn did not respond to calls and letters requesting comment.

The very public two-day auction in New York late last year illustrates the schizophrenic nature of Pennsylvania's liquor laws and their enforcement.

Section 4-488 of the state's liquor code prohibits out-of-state wine shipments to Pennsylvania residents, unless a direct wine shipper license is obtained, but a lively trade between wine lovers, auction houses and wineries has thrived out of sight for years. Few will talk about it openly and risk legal penalties. But it's not clear what those penalties would be, as the head of liquor control enforcement says the shipping laws are unenforceable.

That's because a 2005 U.S. Supreme Court decision mandates that states treat out-of-state and in-state wineries the same in regulating direct sales. Before that decision, the state had allowed Pennsylvania wineries to ship directly, but not out-of-state wineries. Until the discrepancy is addressed, possibly this summer, wine shipping commerce remains in murky legal waters.

For now, California wineries wishing to ship directly to Pennsylvania residents can apply for a limited winery license, but only one winery has done so.

But even if state police get a tip that a California winery was shipping here without the license, "we couldn't take any enforcement action right now" because of the court's decision, said Major John Lutz, director of liquor control enforcement.

He then added: "Although we're enjoined from enforcing the law, I'm not sure that makes it legal for other states to ship here. There is a difference."

That difference means very few California wineries are willing to risk shipping to Pennsylvania and major carriers such as FedEx, UPS and Airborne have set policies against making such deliveries.

"It is an unusual situation," Major Lutz said.

The law is clearer regarding the illegality of buying alcohol in another state, then driving it back to Pennsylvania. This is a particular issue in the Philadelphia area, where wine and liquor stores sit just minutes across the state line in Delaware and New Jersey.

Yet, in all of 2007, liquor control enforcement issued only 11 citations of illegal importation of alcohol, for less than 20 liters each of wine, spirits and beer.

It's a matter of practicality, Major Lutz said. They could set up surveillance at the out-of-state stores and pull over drivers with Pennsylvania plates as they cross the border but "it would really expend a lot of resources for little gain," he said. "For that reason, we tend to look for someone with a pickup-truck load."

No citations have been issued so far in 2008, but he thinks that may have more to do with economics than enforcement.

"In reality, as the price of gas gets up toward $4 a gallon, this problem tends to go away by itself because the financial incentive goes away."

-- Steve Twedt



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